Former Wells Fargo (NYSE: WFC) Exec to Lead U.S. Bancorp (NYSE: USB) Ultra High Net Worth Division
The U.S. banking industry has become highly fragmented over the past few years. As many of the large banks change their business models to target new opportunities, most have the same goal: more wealthy customers.
The theory goes that banking is still a relationship business, so if a bank is able to attract the personal deposits for wealthy professionals, they may have a better chance at getting their corporate business as well. U.S. Bancorp (NYSE: USB) is entering that niche now, launching an ultra-high net worth wealth management division for accounts of at least $25 million. Although this customer base may not be willing to pay fees for their services, they provide an important conduit to other revenue generating functions for the banks. The Minneapolis based bank will cater to super-rich clients with its new Ascent Private Capital Management division. The division will be led by President Michael Cole, the former leader of Wells Fargo & Co.’s (NYSE: WFC) Family Wealth Group and Wealth Planning Center.
Ascent plans to opens offices in select U.S. cities later this year, but the specific cities were not disclosed at this time. Beyond traditional financial planning and investment consulting services, Ascent will provide clients with “wealth impact” services that the bank said “will help some of the country’s wealthiest families with family governance and risk management.” Cole said in a statement “Many ultra-wealthy individuals are riding the wave of global responsibility and proactively using their wealth to make a positive impact on the world. U.S. Bank will provide clients with the guidance and tools they need to positively impact the world and establish their legacy.”
U.S. Bank is already in this industry per se, managing money for high net worth clients (more than $1 million in investible assets) through The Private Client Reserve, and clients with more than $100,000 to invest through The Private Client Group. The expansion plans are aimed at taking the firm to a new level, and perhaps capitalizing on distrust of the larger banking institutions. The bank will be fighting stiff competition from firms like Citigroup (NYSE: C), JPMorgan Chase (NYSE: JPM), and Bank of America (NYSE: BAC), each of which focus significant efforts on retaining clients in these demographics, and trying to expand their own ultra high net worth divisions as well. Cole will have his work cut out for him, but if his track record at Wells Fargo is any indication, there may be a very interesting time for U.S. Bank on the horizon.