- Title: President, U.S. Trust
- Time in Current Position: 5 years
- Time with Firm: 9 years
- Previous Employer/Title: CEO/CIO of Asset Management, FleetBoston Financial
- Years in the Industry: 32
- First Job in Industry: Equity research Analyst, home insurance company
- Alma Mater: BA, Rutgers University; MBA, Columbia Business School
Where is the client mind-set right now, especially in the UHNW space, regarding trust in the markets?
KEITH BANKS: When I look at the clients of our industry and our firm particularly, I think they are healing. I think they're on a journey. They are not all the way back, either. I think people still have cash and a lot of fixed income. I still don't believe the typical client is back to where we and probably other firms think they should be from the standpoint of a representation in equities and alternative investments. It's almost a psychic healing process that's going on. Clients have the wherewithal, but because of 2008 there's that mental adjustment. Although we're getting more and more distance from that time, it is still a deep cut.
Are ultrahigh net worth clients just as timid about diving back into equities as the less affluent?
KB: Absolutely. I can't speak about the less affluent, but as for the clients that we serve, which are the wealthy and ultrawealthy, absolutely. And we have seen it manifested in a number of ways. Number one, we saw about three years of significant deleveraging by those clients just reducing debt, paying off debt. They didn't need to, didn't have tothey wanted to. And then last year clients started borrowing again. We're the biggest art lender in the country. Our typical client is a user of credit, and we provide a lot of credit to U.S. Trust clients. So we're a good gauge for that. And I will tell you, last year, for us anyway, was the first year where I would say clients were really coming back and wanting to do things again involving credit. As a result, this year's been a very good year for us in credit. It was interesting. Right after the crisis, the mind-set was return of investment, not return on investment. Preserve my capital, give me a little bit back and we're all good here, right? Today it's increasingly becoming return on investment, but the willingness to go out further on that riskand I'm not talking way out there, I'm just talking a bigger percentage in equity, for instancea number of people are still kind of timid. Every time they start the process to take more risk, either something happens in the world and they go, "Uh-oh, markets are going to tumble," or the market moves and they go, "Uh-oh, I missed it." It's a concern a lot of people have. So what's been interesting is that despite the move that we've seen in the markets, it's not been powered by this massive shift of assets. Cash has begun to move, and I think the typical client's holding of cash is probably at a more normal levelmeaning 10% or less, more like less. But that great rotation out of fixed income we've been hearing about is like flakes off the iceberg.
How has the increased reliance on wealth management as a revenue generator impacted your role at U.S. Trust?
KB: I'm the president of U.S. Trust. And I'm expected to deliver for our shareholders the kinds of results that U.S. Trust should be able to deliver. That's my table stakes. But both Brian Moynihan [president/CEO of Bank of America] and I have always considered me a senior executive of Bank of America. And Brian's made it clear that our responsibilities don't begin and end in the line of business. One of the big advantages that we have right now as a companyand this is another differentiator, quite franklyis our ability to deliver the broader enterprise. Meaning that if you're a CEO of a company, you have your own business and, yeah, you need U.S. Trust to help manage the wealth for you and do all the other things we do for you and your family. But guess what? You need an investment banker, you need a corporate banker, you need treasury services. I can personally handpick, by working with my partners who run the commercial bank or the investment bank, my peers in the company to work with you. And, by the way, I'm expected to because that's Brian's vision. That increasingly is becoming a differentiator. So Brian expects me as a leader of U.S. Trust, through my team, to go beyond delivering just what U.S. Trust has: If some of the capabilities in the broader enterprise are important to you, we deliver that, too. I've won business in U.S. Trust based upon the prospective client's belief that not only would we do the job in U.S. Trust, but that we could also in fact deliver the enterprise. And for them, that was an important part of the equation. This is something that we all do. So I'm an executive of the line of business first, but an executive of the broader Bank of America, and that's just part and parcel of doing what we do here.
What are the most important qualities for an advisor at U.S. Trust?
KB: One, since we are a fiduciary, we need to have people who can operate as true fiduciaries. Meaning everything they do on behalf of U.S. Trust for those families they serve has to be solely in their best interest. If that's not how someone can conduct themselves every single day, they just can't be here. We're not going to hire them, or if they're here, we're not going to keep them here. The second thing, and it's a subset really of the first point, is integrity. That's got to be a given. I need to know that every single personnot most of the people, but every single personin this company will operate with the highest levels of integrity every day they come to work. I'd say number three is passion. I want to see advisors and the broad-based client service team be passionate about the families they serve, what they can bring to bear and the profound impact they could have on that family. That's got to be what they wake up thinking about, what they go through the day thinking about and what I genuinely hope they think about at night.
- Number of Employee Channel Advisors: 2,090
- Total AUM: e $363 billion*
- Average Employee Advisor 12-Month Trailing Production: Not provided
- Average Employee Advisor AUM: Not provided
- % Women Advisors (Not including registered associates): Not provided
- % Minority Advisors: Not provided
*Includes client assets in custody, loan balances and deposits at Bank of America.