U.S. Bank Wealth Management targets the well-to-do
The wealth management business of U.S. Bank is looking to attract more affluent customers with $250,000 to $3 million in investable assets, Mark Jordahl, the head of U.S. Bank Wealth Management, told analysts at the Credit Suisse Financial Services Forum in Miami.
"Scaling wealth management to the scale of the bank is important to us," he said. "One of the areas where we need to scale much more is in the affluent segment."
Jordahl declined to provide specifics as to how he plans to build out services to the targeted demographic, saying only the unit is focused on "adding the right staff."
The bank currently has relationships with more than 18 million affluent households, according to data he presented at the forum.
Jordahl was upbeat about the growth prospects for the wealth management business overall, which he said generated $795 million in revenue in 2017, up 6% from 2012. Its pretax income grew 11% over the five-year period, he said.
"This is one of the faster-growing parts of the bank," he said, adding that it still has a "ton of head room" to grow both within the bank and geographically.
He pointed out that only 4% of the bank's customers receive investment services from the bank, which translates into a significant business opportunity. The bank is working to increase the percentage to 15% to 17%, the wealth penetration rates for best-in-class financial institutions, according to industry experts.
The bank's wealth business consists of three brands catering to different customer segments: U.S. Bancorp Wealth Management targeting mass-affluent and affluent customers with up to $3 million in investable assets; U.S. Bank Private Wealth Management targeting high-net-worth customers with $3 million to $75 million; and Ascent Private Capital targeting ultra-wealthy customers with more than $75 million.
Jordahl talked about the progress the bank has made in bringing new technology to advisors. In addition to implementing a Salesforce CRM system, the bank provided advisors with a variety of planning tools and implemented a robo advice platform, called Automated Portfolios, which began rolling out to bank customers last year in a phased approach.
"We think technology makes good advisors more effective and more efficient. It allows them to spend more of their day on the thing they truly add value at," he said. "We think it's all good."