As an adviser to the affluent, Charlotte B. Beyer thinks many private banks have it all wrong.
According to Ms. Beyer, throwing private clients into demographic categories - such as means of wealth - is a good way to alienate them. So is mailing a blizzard of marketing literature instead of contacting clients directly by phone.
These opinions are based on regular discussions with 200 wealthy families that are members of the Institute for Private Investors, a Summit, N.J.-based educational forum for high-net-worth individuals founded five years ago by Ms. Beyer.
Through her work with the affluent, Ms. Beyer believes that the wealthy possess attitudes that are often at odds with what many private bankers would like to believe.
For instance, affluent investors are disdainful of anything that smacks of boilerplate and don't want to pay for standardized financial advice.
"What customers are not willing to pay for is too often what firms keep producing more of, like paper," Ms. Beyer said.
One institute member told Ms. Beyer he uses a New York private bank for financing but never for investment management and advice.
"He thinks the (investment) product sales people are a joke. But because he loves his private banker, he will never leave the bank," she says.
She also has discovered that private clients are extremely finicky: two out of three replaced a money manager last year.
"Let's face it, investment management is all commodities. Our families say, 'All of these people sound alike'," Ms. Beyer added. "Only the approach can differentiate a firm."
In recent years, many private banks have placed trust officers, investment managers, and lenders on teams to work with categories of clients, such as doctors, heirs, executives, or entrepreneurs.
But Ms. Beyer thinks putting clients in a demographic box is bunk. Instead, she suggests they be categorized by how much control they wish to exert over their investments.
"Just look at (Charles) Schwab and their success across the wealth spectrum," she adds.
Still, the market segmentation approach attracts interest, according to U.S. Datatron, a mystery shopping firm in Palm Beach Gardens, Fla. It reports that three banks in the past month requested surveys of competitors that follow this practice in offering private banking services.
"Clearly they're not ruling it out," said Gary R. Cohn, the firm's president.