When a source suggested I profile a top woman in private banking last year, I didn't think that was a strong enough story. But his repeated calls prompted me to do some research, and that led me to a startling discovery: Women head up no fewer than 10 of the biggest names in private banking and wealth management, including Merrill Lynch Trust, J.P. Morgan Private Bank, and Citigroup Asset Management. Collectively, they're responsible for more than $1 trillion in personal investments and trusts. Even in the lower ranks, women comprise up to 40% of the professionals at many of these firms.
Once thought of as staid and boring compared with the more glamorous world of investment banking, the private banking and wealth management business has evolved into one of the hottest in financial services. That's reflected in its price-earnings multiple of 25, which is well above the 14 for investment banking and 16 for credit-card divisions, according to a J.P. Morgan analysis. The transformation has much to do with the industry's increased focus on generating recurring fees for managed assets and developing multigenerational relationships, both features of private banking and wealth management.
The arm of the banking business that used to service just the nation's wealthiest families has become more democratic in recent years. While you still need a minimum of $25 million to open an account at J.P. Morgan, many more institutions are now welcoming clients with as little as $500,000.
In trying to figure out why women have been so successful in this area, I interviewed 9 of the 10 executives on our list (table). While they all claimed they didn't think about gender when it came to their career accomplishments, they each said in different ways that the nature of private banking plays to women's strengths. "We have a proclivity and appreciation for developing relationships," says Maribeth Rahe, president of U.S. Trust. Doris Meister, chairwoman and CEO of Merrill Lynch Trust, agrees: "What I love about the business is the people aspect, because you're really connecting and relating the work you do to how it impacts people's lives."
Indeed, money management is more than achieving a desired rate of return. While significant technical skills are necessary, private bankers--sometimes called relationship managers--also need to help clients articulate their personal objectives for their wealth. To do that, they must quickly establish trust and rapport. Managers "must be comfortable listening and ceding power to a client and not spending time showing what they know," says Heidi Schneider, head of private clients for Neuberger Berman, an investment management and mutual fund company. Because women often come across as sensitive and empathetic, she finds even many men would rather speak to a woman about personal wealth matters than to another man.
Wealth managers--not unlike working mothers--also require the ability to juggle tasks and orchestrate teams of people across various functions. For instance, a client may need to set up a trust, offset a huge exposure in a single stock with derivatives, and invest the proceeds from the sale of a business. "In three seconds my day goes from the sublime to the ridiculous," says Maria Elena Lagomasino, chairwoman of J.P. Morgan Private Bank, who might be recommending a dentist one minute and hashing out complex estate planning issues the next.
Finally, the field provides female executives with a reasonable work/life balance. Although trust clients can be demanding, they aren't likely to insist that you hop a plane at 4 p.m. on Sunday for a meeting. "It's a business where you can make a contribution, yet still have more control and flexibility," says Wendy Murdock, chief operating officer for retail and high net worth clients at Citigroup Asset Management. No wonder so many talented women have been drawn to the field.
To join a discussion in our forum, see hers.online at businessweek.com/investor/ By Toddi Gutner