Carver Federal Savings Bank says its working-class customer base has never pressed it for more savings options, but it decided to expand its offerings anyway.
Working with a third-party provider, in June the 56-year-old New York thrift added mutual funds, annuities, and college savings plans to a selection that had been made up solely of savings accounts and certificates of deposit.
At other community banks that would not be a noteworthy move, but it vaulted the $540 million-asset Carver to the forefront of black-owned banks in wealth management offerings.
William Michael Cunningham, the chief executive of Creative Investment Research Inc., a Minneapolis investment advisory firm that focuses on black-owned banking companies, said he knew of no other such bank with a significant selection of wealth management products.
Serving communities whose residents have little to no disposable income, black banks have largely ignored wealth management. Broadway Federal Bank in Los Angeles does more than most, and its wealth management offering consists of having a Smith Barney representative in one of its branches offer customers investment advice.
Paul C. Hudson, the president and CEO of Broadway Financial Corp., the $240 million-asset bank's holding company, said even with Broadway's entire deposit base to draw on for business, the Smith Barney agent has time to work with a large number of outside clients.
"We tend to serve low-to-moderate-income customers," Mr. Hudson said. "We don't get a lot of requests for wealth management."
It is the same at Carver, which targets neighborhoods in Harlem and Brooklyn. Though she would not provide numbers, Catherine Papayiannis, the executive vice president and chief operating officer of Carver Bancorp Inc., said Carver's accounts are smaller on average than its competitors'.
But she said the company believed it had to offer wealth management if its tag line - "Building Wealth Block by Block - was to be taken seriously.
"Our challenge is to educate our customer base," Ms. Papayiannis said. "We're getting some signs of interest, and we've had some pleasant surprises, but we expect it to generate modest fee income initially."
It will take up to 18 months before the effort begins yielding solid results, she said.
Carver is offering the new products through Essex Corp., a New York company that has similar arrangements with hundreds of community banks, Ms. Papayiannis said.
Dina Curtis, a principal at Stewart Partners LLC, a consulting firm in Washington, said wealth management would serve Carver well, particularly when it completes its acquisition of the $200 million-asset Independence Federal Savings Bank.
Ms. Curtis, who banks at Independence, said the Washington thrift has no wealth management products, but they would "be very attractive to people here" given that Washington has a number of upper-middle-class black communities.
