CSFB Private Client Services plans to roughly double the size of its operation — now nine offices and 250 advisers — in the next three to five years, its new top executive says.
The expansion could come through acquisition as well as organic growth, said Gary A. Neuser, the UBS executive who last week became the global head of the unit. Jeffrey J. Salzman had the title until October, when he was made its chairman. Since Richard Thornburgh, an executive vice chairman of Credit Suisse First Boston, had been running it.
Mr. Neuser said Friday that the private-client unit — based in New York and with offices in New York, Baltimore, Atlanta, Miami, Dallas, Chicago, San Francisco, Los Angeles, and Palm Beach, Fla. — is well established in all the “prime markets” of the United States.
“From these locations, I think we can cover the vast majority of private wealth in the country,” he said. “There may an exceptional new region that pops up here and there — Phoenix may grow by leaps and bound — but for now we are focused on these regions.”
For now the unit will focus on the United States for now, Mr. Neuser said, but over time there may be more opportunities abroad.
He said he plans to work closely with Credit Suisse to help the business develop. “This is a unique boutique business associated with a one of the largest and most powerful private bank in the world,” he said.
Mr. Neuser was a senior vice president at UBS Wealth Management, which was created by the merger of UBS Private Bankers and Warburg Financial Advisors. He oversaw their integration.
He came to UBS in 2000 from Merrill Lynch, his employer for 23 years. He was the director of marketing for Merrill Lynch International when the firm entered private banking.
“We built a private bank and a private banking platform specifically to work with high-net-worth international clients,” he said. Merrill formed the unit “because it is what the clients wanted us to do,” he said.
He said he is confident there are opportunities to develop scale in the private-client business.
“Study after study that I have seen on the high-net-worth arena indicates that there is no one with more than 5% market share,” he said. “That is good news and bad news, because it means we don’t have it but no one else has share either. There is an opportunity here.”
Mr. Neuser said he expects dramatic consolidation in the private-client business. Commercial banks are trying to provide more investment banking services and investment banks are trying to provide more commercial banking products, he observed.
“This isn’t a strategic decision; it is happening because clients are demanding it,” he said. “Wealthy customers want all of their products and services at one venue.”
Analysts and competitors agreed.
Burton Greenwald, a Boston analyst, said it is difficult to expand as much as CSFB plans to without making a major acquisition. “I think banks and their subsidiaries all want to make significant strides organically, but some moves need more than just some strategic hirings,” he said. “For firms to really grow, it requires some more creative thinking.”
Mr. Neuser said the direction and success of his unit “will not be based on what products we are going to develop.”
“We have to look at our clients and provide them with the right solutions,” he said. “That means superb asset management, strong alternative — products such as private equity and hedge funds — and attractive lending products.”
