Bank of the West says it's ready to take on the big boys serving the ultrahigh-net-worth market, thanks to the recent launch of Family Wealth Advisors.
The San Francisco-based bank is betting that the new "boutique" catering to the super wealthy will gain an edge over rivals because it leverages the global resources of its French parent, BNP Paribas.
"No one is providing the global expertise and resources in this boutique setting that we are,” says Steve Prostano, the head of Family Wealth Advisors.
To be sure, competition for business is fierce, with countless firms fishing for a limited number of super rich clients. Only .1% of U.S. households have $20 million or more in assets, according to Cerulli Associates.
"As any firm attempts to move upmarket, the households get a lot thinner," says Donnie Ethier, an associate director of Cerulli's high-net-worth practice.
The newcomer will be squaring off with global goliaths such as BNY Mellon, Northern Trust, JP Morgan Chase and Goldman Sachs as well as other competitors with more established brands.
"I think this is going to put them in the crosshairs of firms like Hawthorne, Ascent and GenSpring," Ethier says, referring to the ultrahigh-net-worth wealth management units of PNC Bank, U.S. Bank and SunTrust Bank.
Without a brand name, Family Wealth Advisors is likely to face acute competitive challenges, at least initially, some analysts say. Bank of the West does not have the same name recognition in the United States as BNP Paribas and its "Key Clients" ultrahigh-net-worth offering enjoy in Europe, making Family Wealth Advisors a hard sell, they say.
“They need to develop name recognition to demonstrate what their value proposition really is," says William Boland, a senior analyst in the wealth management unit at Aite Group.
Others do not view the firm's lack of a brand name as a negative, given that Family Wealth Advisors is looking for a boutique feel. Firms claiming to be boutiques don't necessarily want to be associated with large institutions, says Ethier.
Bank of the West, however, is not a total newcomer to the business, it says. While the bank has never had an official offering for the super wealthy, it has been serving this client segment for decades. Over the past 18 months, it has brought in new clients and plans to bring in even more, Prostano says. Prostano declined to provide figures, saying only that "the growth it hopes to achieve will be in line with the consistent, high-level of service it plans to continue to deliver to clients."
Family Wealth Advisors is looking to serve clients nationwide and already has a presence in 28 markets, according to Prostano.
Since joining Bank of the West in April of 2015, Prostano has been staffing up his team, hiring several high-level senior leaders. He appointed a former Ascent exec to lead Family Office and Strategic Planning Services and named an entrepreneur to spearhead its Strategic Philanthropy and Purpose Investing offering.
"We're continuing to hire experts and building out resources as we grow. We're not going to be acquiring teams or acquiring businesses," says Prostano.
Prostano spent the better part of year understanding the needs of the rich, using the knowledge he acquired to build the boutique. The new unit offers three core services, including the “soft services" that analysts say firms need to distinguish themselves in the fight for wealthy clients.
In addition to providing traditional global investment management and consulting, Family Wealth Advisors is offering what it calls "family enterprise solutions," a set of services that includes multigenerational succession planning, family leadership and governance consulting and family office consulting services. It is also offering a slew of specialized services, including a line of “solutions” for private business owners.
The idea, says Prostano, was to develop a broad-based set of both financial and non-financial products and services.
Bank of the West's entry into the ultrahigh-net-worth market is not at all surprising, according to analysts. "Most banks of scale are looking to new markets," says Ethier. ""I do expect we're going to see more banks attempt to move upmarket."