Courtesy of the WSJ:
These are unprecedented times in the wealth-management industry. Some industry stalwarts– Bear Stearns, Lehman Brothers–are gone. Others, such as UBS, are embroiled in lawsuits or investigations. And a few, like U.S. Trust and Merrill Lynch, have been changed beyond recognition by mergers. Those changes, combined with investor anger over their shrunken fortunes, have set the stage for the biggest shake-up in wealth-management in decades. Billions of dollars of client money will move to new homes, along with bankers and brokers. New business models will emerge. Old names will tumble, new ones will emerge. The latest to enter the fray are mid-tier investment-banking firms.
Evercore Partners, Roger Altman’s deal-shop, recently created a wealth-management business led by Jeff Maurer, the former CEO of U.S. Trust. Evercore Wealth Management has been expanding quickly, adding staff and recently buying a U.S. Trust unit that handles fiduciary services. According to people familiar with the matter, Evercore is about to go national with the opening of a San Francisco office. It also is hiring a team of prominent wealth advisers from U.S. Trust, these people say. Details have yet to be announced, but the expansions will give the company key footholds in the two most prized wealth centers, New York and California. Thursday also brought news news that Lazard, the venerable mergers-and-acquisitions shop, is building its own wealth-management business. To run it, Lazard has hired Thaddeus Shelly, a former senior managing director at Bessember Trust.
Granted, Lazard already manages some client money through its Lazard Asset Management and Lazard Freres Gestion businesses. Still, the new Private Wealth Management subsidiary marks a more-focused effort to target the money of the wealthy. Along with investment management, it will roll in some tax planning, trust and estate advice, philanthropy advice and multigenerational planning.
Will they succeed? They have a solid chance. Many of the giant banks are now viewed with suspicion by wealthy clients, who feel lost in giant institutions and complain of constant product pushing. At the same time, many of the boutiques are bedeviled by questions about their longevity, sophistication and governance (not to mention concerns about having a “Madoff” problem).
Just as Evercore and Lazard have carved out an ideal niche in deal making (between the boutiques and giant banks) they may also be successful at wealth management. Where would you put your money these days?
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