Banking on Wealth Management

New Business

Local banks hope to attract wealth management business from current clients. “We’re mostly going after our existing customer base,” says Lou Gomez, senior vice president and regional director of wealth management for Associated Bank. Selling to existing clients has important benefits. Clients often move deposit accounts to the bank where they receive wealth management services. That includes deposit accounts, a crucial source of funding for banks, and loans.

Gomez says some of his focus is on persuading commercial customers to let the bank handle their personal accounts as well. “The bulk of our customers are small businesses, and we’re looking to get both their commercial and personal banking,” Gomez says. If the bank handles 401(k) accounts and business credit lines well, both employees with retirement accounts and business owners may decide to let Associated handle their personal banking.

Once the bank has that additional business, the bank is more likely to retain it. “When a customer just has one account, it moves at the drop of a hat,” Gomez says. “There are certain products that make a customer’s business very sticky, and one of those things is an investment account. If a customer has a checking account and an investment account, that makes the checking account much less likely to move. Wealth management takes the risk out of other, existing revenue streams.”

Of course, banks don’t object to getting wealth management business from clients who aren’t already customers. Those potential clients include wealthy people who have cobbled together their financial services from a variety of sources, getting insurance from an insurance company, stock trades from a broker, and tax advice from an accountant, with no communication between professionals.

Banks aim to draw business with coordinated services, as well as the convenience of managing finances all in one place. “We want to be a one-stop shop for our clients,” Falb says.

Banks are also willing to work with existing financial advisors, filling in gaps in the services a client already receives. “Often there’s another person the family has known for fifteen years, and we work with that person, rather than trying to replace them,” Falb says.