Concern over robo advisors hasn't touched the segment of wealth management serving the ultra-high-net-worth client. That's because there isn’t much demand for them at that level, says U.S. Trust President Keith Banks.
The bigger draw is a firm's principles and values, Banks says, as that has been both a powerful tool for gaining business and recruiting new talent.
THERE SEEMS TO BE THIS RECOGNITION IN THE INDUSTRY THAT THERE IS A NEED FOR A MORE INTELLIGENT PERSPECTIVE ON MONEY, WHETHER IT’S IMPACT INVESTING OR HIGHLIGHTING THE VALUES OF YOUR FIRM.
Clearly, clients continue to be interested in earning a good return on their invested capital, but they are increasingly also concerned with the kinds of investments made on their behalf and the kinds of companies they are being invested in. The socially conscious investment strategies are growing quite rapidly I think in general for the industry, and we’re seeing that certainly among our client base.
I think, in that regard, it’s important and will become increasingly more important.
I will also tell you that it’s true of recruiting. People are very conscious of the companies they are joining, the principals of that company, how that company operates and functions and how it is consistent with their values. It is interesting that this applies to winning business, too — you have got to be good, you have got to be able to deliver value, but a much broader set of variables are coming into play.
HOW IS U.S. TRUST GROWING ITS RANKS?
The growth that you’re going to see from U.S. Trust is going to be organic growth. We’re not acquiring anything. It’s growth we believe we can sustain.
We are going to continue to hire experienced advisors, and we are on target to achieve our goal this year, with 322 private-client advisors. That’s a record. The attrition of our top performers is nil; what I also feel good about is that we have been able to attract top talent from literally every major competitor.
Last year, we announced the private-client advisor development program, which is bringing people in who are not currently advisors but have the skill set and the DNA and desire to be in the wealth management business and to be an advisor.
Last year, we hired 14 from 500 applicants, this year we hired 19, but next year we are going to ramp that number up to 70, and we will see how that goes. If we hit 70 and it works the way we anticipate it will, the following year we will take it up to 100.
This is going to allow us to exponentially grow the size of our private client advisor force, and part of our growth strategy is just that. We need a big army out there fighting the good fight every day for our company, acquiring good clients and representing us in the key growth markets around the country.
SOME ROBO PLATFORMS ARE LOOKING AT THE HIGH-END CLIENT AND SEEKING INROADS INTO THE SERVICE THAT A FIRM LIKE YOURS PROVIDES. WHAT ARE THE OPPORTUNITIES FOR U.S. TRUST TO USE THIS TECHNOLOGY?
I think we would say that we believe the robo trend is real, not a fad, and as result of that, both in our consumer area and Merrill Lynch, we are looking in particular at what is our strategy there.
But for all high-net-worth and ultrahigh-net-worth clients in U.S. Trust, we’re finding less interest in the robo advisor per se.
We do, though, have a number of clients who, despite having a very significant portion of their wealth being guided through advisors and the client service team at U.S. Trust, like to directly invest a portion of their wealth. In that case, we can leverage the capabilities of Merrill Edge.
SO THERE IS NO PLAN FOR A ROBO SOLUTION OR AUTOMATED PLATFORM SPECIFIC TO YOUR CLIENT?
We are keeping an eye on it. The good news is, we’ll be able to leverage whatever is developed within the broader Bank of America organization, so when there comes a day that it becomes more of an interest, we’ll be able to deal with it. In the meantime, as I said, we’re really seeing it more in the form of self-directed investing, and that’s been an opportunity for us to bring some additional value there.