Bryn Mawr Trust seeks to go where robo can't

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Given that Bryn Mawr Trust dates back to 1889, advising clients on the best ways to preserve and grow their money is hardly new ground for the Pennsylvania bank.

Assets under management and wealth management revenue have risen steadily in the past five years. Yet despite the long history and the recent success, there are things the $4.7 billion-asset Bryn Mawr can do better — including serving high-net-worth clients, according to Mark E. Bradford, the director of its wealth division.

“We’re going to be a little more effective in our approach to serving the upper end of the spectrum,” Bradford said in an interview this week. “There’s a lot more complexity to serving family and intergenerational wealth.”

It is one of a number of small banks — including Popular Bank in New York and Peapack-Gladstone in Bedminster, N.J. — that are experimenting with different strategies designed to appeal to wealthy clients. Their goal is to carve out a niche in a lucrative wealth management market dominated by large financial institutions and increasingly attractive to fintech providers as well.

Popular, the $9.7 billion-asset U.S. mainland subsidiary of San Juan, Puerto Rico-based Popular Inc., opened a wealth management and private banking division in June 2017 and has been adding private bankers in metropolitan New York and Florida, where it has 51 branches.

Popular declined to comment for this article, but it is marketing a “360-degree approach” that includes a premium checking account and other specialized products, assistance with investment and retirement planning, a dedicated private banker to serve as a single point of contact, and perks like private banking lounges in select branches.

The $4.8 billion-asset Peapack-Gladstone, which like Bryn Mawr is another old-line Northeastern bank with longstanding trust powers, has also moved aggressively to grab the attention of high-net-worth clients. Like Popular, Peapack-Gladstone is launching a private banking unit. It is also focusing on providing advice and investment banking services to business owners.

The private banking bet appears to be paying significant dividends. Through June 30, Peapack-Gladstone reported wealth management revenue totaling $18.7 million, up 14% from the first half of 2018.

Bryn Mawr, whose wealth unit is on pace for about $44 million of income in 2019, has similar growth aspirations.

It hired Bradford in October and tasked him with building a highly skilled, advice-driven team of wealth professionals able to counsel clients, develop long-term financial plans, and manage portfolios and the overall banking relationship.

This month it announced the hires of John Bonvetti, a veteran private banker from the Bank of N.T. Butterfield and Son in Bermuda, and Edward Garris, who spent the past five years at Wells Fargo advising high-net-worth clients on a range of issues including taxes, business succession and estate planning. Garris is an attorney, so his legal skills, along with Bonvetti's international banking experience, should prove especially helpful, Bradford said.

With Bonvetti, Garris and Joanne Shallcross, who joined the wealth division in March as a relationship manager and an expert in special-needs planning, most of the people and infrastructure Bradford says he needs to sharpen Bryn Mawr’s high-net-worth focus are on board.

“We’re going to continue to grow, but we’re much closer to having the team we need in place,” Bradford said.

On Monday, Bryn Mawr appointed a new chief investment officer, Jeffrey D. Mills, with a remit to develop capabilities that can attract high-net-worth and even ultra-high-net-worth clients. “Jeff will significantly elevate the investment platform and provide guidance to strategically grow the wealth division beyond our current strong foundation,” Jennifer Dempsey Fox, the president of the wealth management division, said in a press release.

Mills joins Bryn Mawr from PNC Financial Services Group, where he served as co-chief investment strategist.

Bryn Mawr’s move to strengthen its advice and planning capabilities should help differentiate it from larger wealth management players like Vanguard, Schwab and Fidelity, who have been shifting many of the services they provide to online platforms, Bradford said.

“There’s been this great bifurcation of our industry,” Bradford said. “To a degree, it’s been commoditized” by the big retail wealth firms. “We can compete more strongly on the value side. …There’s quite a demand for advice and guidance, less around product.”

Bryn Mawr, to be sure, has invested significantly in technology, but instead of self-serve trading platforms, robo-advisers and online tools and calculators, its systems are intended for advisers and clients to use together. “It allows us to do planning with our clients and not for them,” Bradford said. “We’ll sit side by side and walk them through different scenarios.”

According to Brooks K. Hamner, vice president and senior member of the investment management industry team at Mercer Capital in Memphis, Tenn., technology investments represent a long-term trend for banks and wealth management firms seeking cost-efficient ways of serving smaller accounts. In recent years, though, many firms have begun to extend the practice to high-net-worth clients — creating an opportunity for companies willing to invest in a high-touch service model.

“Wealthy families often have very specific and complex financial planning needs that can’t be effectively serviced with templated software,” Hamner said. “[Bryn Mawr] is clearly going the opposite direction, and I think that will benefit them in the long run.”

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