Local banks, large and small, are increasingly turning their attention toward competing for the business of the Valley’s high-net-worth clients as the economy improves and the prospects for wealth grow in the region.
Private banking is proving a boon for Youngstown’s banks, as they seek to bring a full range of products and services under one wing to vie for the investments, mortgages, deposits and a bevy of other demands that help reap profit margins and establish steady lines of business among executives, physicians and lawyers.
“I don’t think it’s any more driven in areas like Cleveland and Columbus,” said Tammy Jorgensen, regional market manager for Huntington Wealth Advisors in the Mahoning Valley. “The Mahoning Valley is one of [Huntington Bank’s] largest groups in terms of wealth numbers throughout Northeast Ohio.”
To be sure, Huntington National Bank has been engaged in private banking services in the Valley for more than 25 years. The area’s other larger banks, including PNC Bank and First National Bank, also offer private client services.
But earlier this month, Farmers National Bank, which also operates Farmers National Investments, Farmers National Insurance and Farmers Trust Co., entered the market.
“We wanted to grab more share of the affluent wallet,” said Kevin Helmick, executive vice president of retail and wealth management at Farmers. “We thought while some of our clients have an investment or trust account with us, we should have all their business. Now one person can be the quarterback; rather than having clients call a mortgage-loan officer or an investment officer, they can have one personal liaison for all of this.”
Tighter financial regulations and clients less inclined to take high risk in volatile markets had led to a shift in strategy within the overall wealth- management sector after the financial crisis.
But trends are turning, and banks see a growing opportunity to attract more high-net clients and the fees, interest and management returns on providing services uniquely created for each individual.
“Some of the smaller banks couldn’t provide these services because they either didn’t have the staffing or they saw no need of it,” Jorgensen said. “But the economy has changed, and banks are beginning more and more to start these services up for the advantage that these clients bring with them.”
Compared with a conventional banking customer, the level of service private clients receive is worlds away. Banks often hire separate staff to cater to the unique concerns of high-net clients, who often don’t have to leave their homes or offices for service. An adviser comes to them.
Services range from specialized deposit services, customized credit options, investment performance reviews, establishing charitable trusts and estate planning, among others.
Private banking often is predicated on low interest rates, flat service fees or no fees at all with the bank’s expectation that the clients will generate profits through other vehicles such as mortgages, investment management, loans or credit lines.