Why is Citizens Bank confident it can win the wealth management business of the mass-affluent? It has more customers in this market segment than most of its competitors, the Providence, R.I.-based bank claims.
"We skew much higher to mass-affluent and above clients," says John Bahnken, head of Citizens Wealth Management.
More than half, or 52%, of its 2.5 million customers are mass-affluent or above, better than even the largest banks, whose mass-affluent customers account for roughly 44% to 49% of their overall customer base, according to Bahnken.
When compared to the overall U.S. population, the bank's concentration of mass-affluent clients is even more striking. Roughly 30% of the U.S. population is mass-affluent or above, Bahnken says.
"We think this is an enormous opportunity for us," he says.
Wealth management shifts into high gear
Since Citizens went public in September 2014 and separated from the Royal Bank of Scotland in November 2015, it has shifted the wealth management business into high gear, recognizing its growth potential.
"It was identified that wealth management was substantially undersized from both a revenue and earnings perspective for the company," Bahnken says.
In fact, the bank recruited Bahnken from Bank of the West in October of 2015 to ramp up the business.
For now, Bahnken is focusing on mass-affluent and affluent customers, staking out a two-prong strategy to attract their business.
In June, the bank launched a new offering for mass-affluent clients, those with $100,000 to $500,000 in investable assets. The new "Platinum" product line offers customers reduced rates and fees on savings and checking accounts as well as access to financial consultants.
In addition, the bank has hired and groomed licensed bankers to work with the mass-affluent Platinum clients, Bahnken says.
The bank is using a different strategy to pursue affluent or "Premier" clients, those with $500,000 to $2 million in investable assets. It is pairing Premier bankers and advisers with a view to having them work together to serve affluent clients.
"We're tightening that relationship," says Bahnken. "We're working hard on getting as many Premier bankers and financial consultants in these dedicated partnerships as we possibly can."
Hiring of bankers and advisers jumps
Not surprisingly, Bahnken has boosted the adviser force in an effort to satisfy the bank's mandate to grow the wealth management business. Since the beginning of the year, the bank has added 50 net new financial consultants, bringing the total to 350.
The financial consultants straddle all market segments, working with both licensed bankers as well as Premier bankers or relationship managers, Bahnken says.
Since the beginning of the year, the bank has hired 50 net new licensed bankers and 20 new Premier bankers, growing the force to 450 and 175, respectively.
Bahnken anticipates that the number of bankers and advisers will continue to expand over the long-term. While hiring will depend on the bank's ability to attract high-quality people, he "could easily see" financial consultants grow to over 400, licensed bankers to 500 and Premier bankers to more than 200 over the next 12 months.
"What it's really about for me is the quality of individuals that we're able to hire," he says. "This isn't for me a pure numbers game."