Manageable Wealth.

• Author: Bigham, Janet
• Position: Fbanks' asset management services - Statistical Data Included

Visions of big fee income are luring banks into the rapidly growing market for financial advice and asset management.

But there's lots of competition Banks will need to develop strong business plans and leverage a recognizable brand identity that reinforces an image of 'wealth management experts.'

The financial services industry today is eyeing the assets of the wealthy. Banks face increasing pressure to find additional fee income through the sale of asset management products and services, making the high net-worth customer a natural target. In terms of competition, though, it's a lot like the game of musical chairs--too many financial institutions scrambling for too few clients.

"Every single financial institution is going after them," explains Evan Cooper of New York, co-author of the newly published, "Attract and Retain the Affluent Investor," and editor-in-chief of On Wall Street. "Banks, brokerages, insurance companies and financial planners are all going after the wealthy. Yes, there are a lot of people with [dollar]1 million in investable assets, but there aren't as many rich people as there are those who shop in discount stores."

How does a bank stand out in the asset-management business? It should position itself as a wealth expert, suggests Cooper. He gives the following tips.

* Know your local community. Banks already have a widespread physical presence, not necessarily the case yet with most brokerage firms.

* Use your marketing clout. Banks can capitalize on their very recognizable brand.

* Leverage existing relationships. Don't neglect your own back-yard. You already have the grass, water it once in a while.

* Plumb your commercial banking relationships. Use the knowledge base of business banking relationship for cross-selling.

Setting the course

The revenue pie the industry is battling over is expected to grow to [dollar]45 billion in 2004, 80 percent above current levels, according to a Goldman Sacks study of 22000 entitled, "Driving the Green." No longer will institutions be able to maintain a mind-set of 'build it and they will come, says lana Burkhardt, vice president of marketing for Fulton Financial Advisors in Lancaster, Pa. Banks and other financial institutions will need to develop strategic plans to gain market share of the expanding wealth management business.

To compete, Burkhardt maintains that it's essential that financial institutions do the following:

* Clearly identify their market segments.

* Build product solutions to meet those segment needs.

* Develop an integrated distribution and sales strategy.

* Build and maintain a strong branding strategy.

* Communicate their brand with an integrated marketing communications program.

* Continuously train and enhance the credentials of their staff.

"In many ways, banks are now offered greater flexibility to provide a full range of asset management products and services," she explains, "yet maximizing the return of those initiatives will depend on the institution's ability to develop and execute a strong business plan."

Relevant pursuit

To increase chances of becoming the adviser of choice, Wachovia Bank has focused on pursuing the corporate client. By mining their own commercial database, Wichovia marketing executives are able to generate investment banking, wealth management and financial planning revenue opportunities.

"The historical context is that we own these relationships," explains Bob Newell, executive vice president, Wachovia Bank, Greensboro, N.C. "They're closely held businesses, family-owned businesses, and they've had a lending relationship with our company. You provide a bridge whereby they might choose to liquidate the company or enter into something like an ESOP transaction."

Migrating the client from a commercial banking environment to a wealth management environment requires two new skills for bank staff: an ability to target clients where the bank can be "relevant" and to shift away from traditional bank thinking.

"To become relevant you need to have the same discussion with that CEO that you might have with a trusted family attorney or outside consultant," claims Newell. "So you change yourself from someone who holds traditional loan and deposits cash-management discussions to someone who discusses a company's long-term options, goals or...