Wells Fargo’s UHNW Clients Preparing for Downturn by Taking out Loans
Clients in Wells Fargo’s ultra high net worth wealth management unit are arranging for loans to ensure they have enough funds in case of an economic downturn so they don’t have to sell their investments, according to news reports.
“They always want to have lines in place for if markets do turn down and they get capital calls on private investments,” Jim Steiner, head of Wells Fargo’s Abbot Downing unit, tells Bloomberg Television. “They want to be able to make those capital calls through use of the line as opposed to basically selling equities in the public markets.”
Lending has grown 5% at Abbot Downing, a spokeswoman for the firm tells the news service. The unit, which was started in 2012, has grown into a $43 billion business but is now getting merged with Wells Fargo’s private bank, Jon Weiss, head of Wells Fargo’s larger wealth and investment management divsion, said earlier this month, according to Bloomberg.
The private bank serves clients with $2.5 million or more, and combining the two units under one chief is meant to streamline operations, according to Weiss, the news service writes. The two units will continue as separate brands, according to Bloomberg.