Interview senior wealth management executives for an hour and you'll get a 45-minute pitch about their ability to achieve superior strength and size while keeping a "small firm" feel. You'll hear how the firm, more than its competitors, can "walk the walk" when it comes to putting clients first. You'll hear about the excellent quality of the company's advisors, its platform and its products. You'll hear about the organization's outreach programs to women and minorities. And you'll hear about the coming opportunities created by the aging baby boom generation and about the firm's total confidence in seizing it.

But in the remaining 15 minutes, you'll hear candid, insightful commentary about the state of wealth management—how it's been able to recover from the challenges of the recent financial crisis, the obstacles it faces as the industry evolves and what executives have been doing to expand their business. It's those insights you'll find in On Wall Street's inaugural State of Wealth Management special report.

The biggest shift revealed during our interviews with the industry's leaders, conducted in September, is the increasing focus on wealth management as a revenue generator. As regulators cast a gimlet eye on investment banking and proprietary trading, banks are looking to the relative safety and profitability of wealth management to boost earnings.

Banks are working to rebuild wealth management income to precrisis levels. Income from annuities, fiduciary activities, investment advice and securities brokerage was $33.4 billion last year, compared with $37 billion in 2008, according to a review of more than 1,400 banks in the Michael White-IPI Bank Wealth Management Report for 2013.

To grow, firms are investing time and money into their wealth management operations like never before. Recent layoffs at UBS hit the investment bank but did not touch the financial advisory arm, which Bob McCann, CEO of UBS Group Americas, says has been a net "hirer" this year.

McCann and other wirehouse executives suddenly find themselves taking center stage within their banks. Meanwhile, regional broker-dealer executives face the same challenges as the national firms, while also competing with bigger, better-funded rivals.

The flip side of all this attention is that these executives and their teams are expected to tote the banner for the rest of the firms' business lines—most notably lending. Cross-selling is the marching order across wealth management. It was made manifest by the recent appointment of Mary Mack to CEO of Wells Fargo Advisors. The former president of Wells Fargo's financial services group was noted for encouraging cross-selling across all business units. No clearer message could be sent to the WFA advisors that their job is no longer to simply serve clients, but to become a lead-feeder for other business lines.

For advisors, this is good news, as it opens up the opportunity to create additional production—and income—from activities not linked to assets under management. This will also create a profound shift in the way advisors work and how they are ranked. Production and assets under management are rapidly being decoupled, a trend industry execs expect to accelerate in coming years.

Cross-selling also creates some potential problems. If a uniform fiduciary standard were written that required brokers to put their clients' interests above their own, the mandate—and in many firms it is becoming a mandate—that advisors suggest in-house, non-investment products to clients could attract increased regulatory scrutiny. FINRA's recent report on conflicts of interest specifically calls out advisor recommendations of proprietary products or advisor sales incentive programs as practices upon which it will be keeping a close eye.

These practices have not yet raised any warning bells with wealth management executives, who claim cross-selling is being driven by customer demand from sophisticated clients. This defense will likely hold as much water as it always has, which is to say not much if regulators get involved. Executives ignore this at their own peril.

Despite the real or anticipated challenges of cross-selling, the state of wealth management in 2013 is healthy, optimistic and eager to make up for time lost to the financial crisis and scandals from which these firms are still, to one degree or another, disentangling themselves.

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