Wells Fargo opens business for the ultra-wealthy

Mon Apr 2, 2012 10:20am EDT

A customer uses an ATM machine at a Wells Fargo bank in Los Angeles, Calfornia March 8, 2012. REUTERS/Fred Prouser

A customer uses an ATM machine at a Wells Fargo bank in Los Angeles, Calfornia March 8, 2012.

Credit: Reuters/Fred Prouser

Related Topics

(Reuters) - Wells Fargo & Co opened its new Abbot Downing business on Monday, merging two of its wealth management units under a new brand it hopes will expand its market share of America's richest families.

The new business, catering to ultra-high-net-worth individuals and families with $50 million or more in investable assets, resulted from the combination of Wells' Family Wealth unit and its Lowry Hill subsidiary. The name Abbot Downing comes from the 19th-century New Hampshire builder of the stagecoaches that have come to represent Wells Fargo.

Since Wells first publicly announced the planned merger last November, the combined business has grown 20 percent to $32.9 billion in client assets under management. In those five months, the group added five billionaires and 13 individuals with $100 million or more in investable assets to its client base, said Jim Steiner, Abbot Downing's president.

"We've had new success in bringing in new foundation assets," Steiner said. "People are leaving more money to foundations and endowments."

He said the biggest drivers of new wealth have been cash from the sale of company stakes through initial public offerings and mergers and acquisitions.

Steiner estimated that about 10,000 households in the United States have $50 million or more in investable assets. In an October study of 72 multifamily advising firms, the average client asset size was $48.4 million, according to research and consulting firm Family Wealth Alliance.

Abbot Downing has just under 600 client relationships, including multiple families across generations.

PSYCHOLOGISTS, TOO

Steiner said the decision to rebrand the combined business was meant to establish a small-firm feel. Wells intended to distinguish its family wealth business from that of other bigger competitors, like the $62.4 billion Bessemer Trust. Abbot Downing was aiming to keep a client-to-adviser ratio of 15-to-one, which Steiner said was low.

"Their biggest challenge will be to differentiate themselves from others," said Tom Livergood, founder of Family Wealth Alliance.

The family wealth management industry is highly fragmented, Livergood said, because of the wide-ranging needs of its clients -- including traditional wealth investment management, as well as wealth succession planning.

Abbot Downing has four divisions: an asset management division, a private banking channel, a combined trust and fiduciary service, and a group that addresses family psychology and governance.

There are about 300 Abbot Downing employees working in 16 offices across the United States. Steiner said the firm would be hiring senior portfolio managers, analysts, relationship managers and planners.

The new business is the fourth under Wells' Wealth, Brokerage and Retirement Group umbrella, which also includes an institutional business, a private bank and a brokerage arm.

(Reporting by Ashley Lau in New York; Editing by Walden Siew, Prudence Crowther and John Wallace)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (11)
mec1 wrote:
I hope they are more competent than the local branch. I suggest that those rich people watch them like a hawk or better yet, go somewhere else.

Apr 02, 2012 3:22pm EDT  --  Report as abuse
theoxman wrote:
In my heart, I’m very wealthy. Now where’s my WellsFargo credit card?

Apr 02, 2012 6:39pm EDT  --  Report as abuse
powerwhip wrote:
Damn, I was only five numbers off in last weeks drawing from being able to use this investment house….

Apr 02, 2012 6:55pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.