Personal Banking For The Merely Rich

You don't have to be ultrawealthy to enjoy the services of a private bank

Chicago developer Patrick F. Daly needed a loan to buy a shopping center early last year, but a national bank he regularly dealt with had a problem. The bank couldn't track down some key information from an outside source quickly enough, and his deal -- which would have expired if he couldn't move quickly -- was put in jeopardy. So Daly called executives at PrivateBank & Trust, a tony little Chicago bank he used for his personal finances. Within 48 hours he had a short-term signature loan for "tens of thousands of dollars," and he bought the property. At PrivateBank, he says, "they make it their business to know your business. They're just very responsive."

Ah, a friendly banker. These days, for people of means -- typically, investable assets topping $1 million -- such friends are becoming more available. Boutiques such as PrivateBancorp, Boston Private Financial Holdings (BPFH ), and Bryn Mawr Trust (BMTC ) in suburban Philadelphia are moving into territory traditionally controlled by far bigger banks. Want a personal banker who is almost always within reach, and may even make house calls? Need to cut through red tape, or want help with trusts? Increasingly, you can pop into boutiques such as these -- and you don't even have to be ultrawealthy: Some of these banks welcome people with household incomes of $150,000 a year as long as there is room for their income and assets to grow.

Lately, small-fry banks are gaining ground as mergers spawn megabanks that are hard-pressed to maintain a personal touch. Sure, if you have vineyards, ranches, or oil wells that need to be managed or portfolios in the hundreds of millions of dollars, you're probably better served at Northern Trust (NTRS ), J.P. Morgan Chase (JPM ), or the private-banking offices of Bank of America (BA ) and Citigroup (C ). Damian Kozlowski, president of the U.S. region of Citigroup Private Bank, says he routinely puts together teams of bankers to address issues about investments around the world for clients. "We bring together resources that small firms could never [offer]," he says.

But for family trusts, rapid turnaround loans, and individually managed portfolios that may total in just the hundreds of thousands of dollars, smaller might be better -- and more affordable. The wealth-management arm of Bryn Mawr Trust, for instance, serves some 1,600 clients, most bringing at least $750,000 to bear, for a total of $1.7 billion. Executives say the individual attention lost when big out-of-town outfits such as Wachovia (WB ) gobbled up local banks has drawn more clients. The clients have stayed in part because of Bryn Mawr's relatively modest fees: a sliding scale that starts just above 1% for trust management and declines as the portfolio size rises. "We're not transferring accounts from one manager to another, as some of our larger competitors have done," says Investment Director F. Peter Brodie.


Some small banks are reaching more communities. Boston Private's holdings include six bank locations in the Boston area and Borel Private Bank & Trust in San Mateo, Calif., and it recently acquired First State Bank of California in the San Fernando Valley. It also boasts a string of money managers and advisers stretching from Bellevue, Wash., to New York City. Altogether, it runs about $11 billion in client assets. "The products that are sold in this market are commodities," says Boston Private CEO Timothy Vaill. "The difference lies in the area of service."

PrivateBancorp targets attorneys, surgeons, and "young fast-trackers," says CEO Ralph Mandell. He and his staff make them feel at home in the converted ballroom of a former social club in downtown Chicago that serves as the main bank's lobby or in plush suburban offices around Chicago and St. Louis. The $2 billion outfit's "sweet spot," he says, is people with a net worth closer to $1 million than $1 billion.

These customers want a personal touch. Years ago, Mary Jane Pollack served on the board of a Des Moines bank that was swallowed up in mergers. She switched to PrivateBank because her own "changed so many times I wasn't sure who was watching out for me." Pollack, who divides her time between Boca Raton, Fla., and Chicago, says: "It's very personal. I can call any time to find out what is happening with my accounts." And when she calls, the bankers know her name.

By Joseph Weber

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