"The bank that comes to you; As the number of wealthy Mass. residents grows, some firms look to pamper clients with services beyond checking accounts" by Ross Kerber, Globe Staff | June 22, 2008
".... First Republic is among a number of private bank companies looking to pick up business from the state's growing number of rich households.
Un-fucking-real! We are HURTING OUT HERE while the richers get richer!!!!
Many of their services, like estate planning and hedge fund investing, are aimed at wealthier clients with $1 million or more in assets they can invest - those in addition to their homes. Especially in a slowing economy, bankers like these customers since they need more products than simple checking and savings accounts.
Translation: They DON'T LIKE YOU and ME, reader.
Because we don't have $$$$!
The banks are going where the money is. New York research firm Phoenix Marketing International found 156,208, or 6.3 percent, of the 2.5 million households in Massachusetts have $1 million or more in investable assets, the fifth-highest percentage of any state.
More customers with more money means more attention from private banks....
Another change is that more private banking clients have made their own money rather than inheriting family wealth, said Eric Hayes, who runs US Trust's New England operations. Nationally, the percentage of millionaires who are self-made is 80 percent, up from 60 percent a decade ago. "You've got a lot of business owners, corporate executives, and VC people who have done well," he said.
Self-made?
Private banking isn't technically defined by regulators, and is considered just one area of the finance industry segment known as "wealth management." According to the most recent ranking by Barron's magazine, Merrill Lynch was the largest wealth manager in the country last year, with $1 trillion worth of domestic private client assets in accounts worth $1 million or more, followed by Citigroup and Bank of America's Global Wealth and Investment Management unit, in Boston, of which US Trust is a part.
No, that isn't one of my accounts.
In practice private banking refers to banks' efforts to reach wealthier customers, often defined by where the bankers set up shop. For instance, First Republic has offices in well-to-do cities like San Francisco, Santa Barbara, and Newport Beach, Calif., Portland, Seattle, New York, and Greenwich, Conn.
In addition to checking accounts, most private banks offer a host of financial products such as fixed-income management, trust administration, and estate planning, and services for the companies owned by clients. Many also arrange investments in hedge funds, for which an individual must have a total net worth of $1 million or income of $200,000 a year.
You don't need that kind of money to join the club, however. While First Republic would not provide many details of the assets or deposits that customers must have to receive particular services, it requires just a $500 minimum to open a checking account that rebates most ATM fees and a $2,500 monthly average balance needed to waive fees.
Katherine August-deWilde, First Republic's chief operating officer, said when the Mandarin branch opens the company will have about 45 employees in Boston, up from 25 last year. She declined to discuss its customer numbers in detail but said one reason its business here is growing is that its customers are still buying houses and looking for a bank that will provide financing. "Our client base can well afford the mortgages they have," she said. If anything, she said, the credit crunch has helped her company by forcing competitors out of the market.
Oh, isn't that great -- for a select few!!!
Sigh!
Now the new office will help First Republic connect with the many people in the venture capital and technology industries who know people in Silicon Valley, where First Republic also is strong. "A lot of people on both coasts know each other," she said.
Word of mouth is what led Bruce Percelay, the chairman of Mount Vernon Co., a Boston real estate investment company, to switch much of his company's business to First Republic after hearing about their services from another real estate investor. He said he was satisfied with his last bank but found First Republic willing to lend on better terms. "At a time of retrenchment in the banking business, they were singing the exact opposite tune," he said.
Yup, BANKS will LEND to each other , but NOT you or me!!
Since deposits with most private banks are insured by the Federal Deposit Insurance Corp., they are subject to rules such as the Community Reinvestment Act designed to stop banks from cherry-picking only the richest clients. First Republic is now rated as part of Merrill Lynch, which acquired the company last year for $1.8 billion. The last time it was reviewed as a standalone business under the act, in 2005, First Republic received a "satisfactory" rating from the FDIC, which noted its heavy lending in low- and moderate-income census tracts within its service territory...."
And not only that, YOU and I are INSURING THEIR DEPOSITS!!!
And whether it is the Fed, FDIC, FDA or FCC (or whoever), they sure do a great job, huh?
