Pub. 1 2010 Issue 2

www.wvbankers.org 10 I n the past two and a half decades, the banking industry’s share of total U.S. household financial assets fell 44 percent to 12.4 percent, while the share of mutual funds increased 16 times to 11.4 percent.¹ This fact, coupled with the ever increasing commoditization of traditional banking products and A New Era in Banking: Wealth Management By Barry L. Dayley, CFP®, RFC Structural changes in the banking industry initiated by consumer demand and convergence of financial services have forever changed the face of community banking. Banking platform. They provide very sophisticated services for their most wealthy customers. In fact, wealth management services are reportedly being provided by 83% of large banks, 63% of medium-sized banks, and 49% of small banks.² How- ever, it is not enough to offer investment products or access to online financial planning calculators; a community bank must offer practical wealth man- agement solutions. So what is wealth management and what impact can it have on community banking? Wealth management is a specialty of financial planning. The wealth manager’s focus is the client and his efforts are devoted to helping clients achieve life goals through the proper management of their financial resourc- es. The practice of wealth management is holistic and individually customized. Success is not measured by investment performance relative to other manag- ers, but rather by the client’s success in meeting life goals. Key factors for the choice of a community bank to offer wealth management services are still discretion and safety, image and reputation, service quality and perfor- mance. Many clients still have classic needs from the financial planning and investment management perspective. However, customer expectations of wealth management services are chang- ing. “Client experience” has become a differentiator for success, and requires a new generation of relationship manag- ers who embody not only competence but encourage trust and confidence. To illustrate the impact of true wealth management services, delivered by a highly professional relationship man- ager, let me introduce you to Gerald Friedel, Vice President of Wealth Management at Itasca Bank & Trust in Itasca, Illinois. In 2000, Itasca Bank & Trust established a wealth manage- ment program working in connection with Money Concepts International, banking services offered by non-bank competitors pose a real threat to a com- munity bank that is not able to address wealth management needs. Now, nearly every large bank in the world offers some semblance of Wealth Management as part of their Private