Deutsche Bank, a newcomer to U.S. private banking, is aiming to have $10 billion under management by the year 2000.
The German banking behemoth has already amassed $3.5 billion of assets under management in its two-year-old subsidiary, Deutsche Bank Trust Co. It is now counting on its AAA credit rating and sterling reputation to rev up its U.S. private banking effort.
"The Deutsche Bank name will get you in the door," said Henry S. Ziegler, chairman of Deutsche Bank Trust.
Still, foreign banks have had a tough time entering the highly fragmented U.S. private banking business - a market known for client inertia. Indeed, France's Credit Lyonnais recently shuttered its New York private banking office after less than two years here.
But Mr. Ziegler is confident that won't happen to his operation. "We have a mandate that is not going to be pulled away from us at any time," he said. "It's not an experiment."
Besides, the $505 billion-asset Frankfurt-based banking company is positioning itself a little differently from other foreign institutions. Rather than tout its investment management acumen, Deutsche Bank relies on customized credit products to lead its marketing push. Mr. Ziegler reasoned that it's easier to cultivate a prospect by offering credit than by asking for money to manage.
To that end, Deutsche Bank Trust, which targets clients with net worth of more than $20 million, waives its $3 million investment minimum for the first two years of a new relationship. When it is given money to manage, the cash is invested by its affiliate, Deutsche Morgan Grenfell/C. J. Lawrence Inc.
Mr. Ziegler is also seeking to leverage his own background as a trust and estate attorney to bring in business. A former head of Shearman & Sterling's trust and estate practice, he offers to help would-be Deutsche Bank clients improve their estate plans.
"If you can sit down with somebody on a no-charge basis and say, 'Here's a way you can save taxes,' then somebody owes you one," Mr. Ziegler said. He recalled recently winning a client by suggesting a visit to a lawyer to redo an estate plan.
"I made a friend for life, and that's the way you get business," Mr. Ziegler said.
Others agree that private bankers should take on the role of trusted adviser.
"That's a good marketing strategy," said Jeb Britton 3d, a senior consultant at Spectrem Group. "It's not a gimmick; it's how you become that trusted adviser and foster a relationship that will last forever."
