With markets off as much as 20 percent over the past year, many investors are jittery about their futures. To the uninformed, it might sound like a bad time to be running a wealth management business.
Diane Thormodsgard, however, sees the silver lining. "People are really concerned about their wealth. They want to preserve it; they're more interested in financial planning," says Thormodsgard, vice chairman and head of wealth management and securities services for U.S. Bancorp. "So this is a great time for us to build stronger relationships with customers."
In the second quarter of 2008, her division's revenues actually nudged up 0.4 percent to $495 million, while profits slid 2.6 percent to $149 million, a major accomplishment given that fees are based on asset values. In the quarter her division posted an ROE of 25.2 and an ROA of 8.24. Her division's anticipated full-year revenue contribution is $1.9 billion, or 13 percent of the bank's overall revenue.
Thormodsgard has spent much of the past year revamping how the biggest part of the business-wealth management-operates, combining responsibility for trust, financial planning, and private banking, along with more traditional banking, in local markets. "We want all of those services for our high-net-worth customers available, with a team of people, in the local market," Thormodsgard explains.
Service also is a big part of the securities services business, which includes the nation's No. 2 corporate trust shop, fund family FAF Advisors, fund services and institutional trust and custody. Several years ago, William Sullivan, Jr., managing director of PFM Asset Management on Long Island, heard some minor complaints from his staff about his custodian, U.S. Bank. He called his customer service rep, and a day later, Thormodsgard was on the phone. Within two weeks, a team had been dispatched to fix the problems. "Diane really won me over," Sullivan says. "It's all about her honesty, integrity and desire to make U.S. Bank the best. That's what you look for in a leader."
An Iowa farm girl, Thormodsgard attributes her success, in part, to her small-town upbringing. "When it was time for the harvest, everyone pitched in. And in high school, you participated in everything," Thormodsgard says. "I learned how to be on a team and collaborate." Those skills are serving her, and U.S. Bank, well in turbulent times.
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