How Regional Banks Are Expanding Their Wealth Management Units
With U.S. bank lending growth at its slowest since 2013, regional banks looking for new sources of revenue are muscling into other financial services, including investment banking and wealth management, Reuters writes.
Atlanta-based SunTrust, for example, has hired advisors in New York and Texas to grow its geographic footprint as well as assets under management, Chief Financial Officer Aleem Gillani said in the bank’s third-quarter earnings call, according to the newswire. Fifth Third Bank, headquartered in Cincinnati, is focusing on growing its wealth management operations both through expanding its staff and acquisitions, Chief Financial Officer Tayfun Tuzun said on the company’s third-quarter earnings call, according to Reuters.
To attract clients, meanwhile, regional banks can “piggy-back” on the relationships they’ve built in their communities, according to the newswire.
And they have plenty of potential customers the bigger traditional wealth management practices don’t want because such clients don’t meet the typical $250,000 minimum required for personalized advice, Reuters writes. Meanwhile, only 58% of Americans born between the early 1960s and 2000 work with financial advisors, compared to 72% in 2012, according to a Fidelity Investments study cited by the newswire.