SunTrust Banks Inc.'s private wealth management division has broadened its legal specialty group to offer private banking services to the associates in law firms that are already customers.
Like the specialized units SunTrust has created to court newly rich groups such as athletes and entertainers, the new service is expected to create relationships with emerging-affluent clients. The associate program introduced this month is intended to help the law firms retain associates as well as give SunTrust new wealth management relationships.
Steve Allen, a senior vice president in SunTrust private wealth management's legal specialty group, said the company will roll out the program to 100 firms during the next few months. SunTrust already offers private banking services to law firm partners, but the firms that have adopted SunTrust's wealth management platform for their partners were eager to use it to retain associates during the 10 years or so it can take to make partner.
The platform enables law firms to offer an array of discounted financial services and a financial plan to their associates, especially new hires. Associates get "private-client-level service without really qualifying for it," Mr. Allen said, and SunTrust gets access to these customers
"When attorneys become partners they hit everyone's radar screen," he said. "If we can get them as clients before that, it helps everyone. It helps the law firm with retention and it gets us clients as well."
"No one is actively reaching out to these associates," he added, "and the response from associates and the response from these firms has been overwhelming."
In May, SunTrust formed specialty units within its private wealth management arm to focus on medical and law school students.
The Atlanta banking company has 14,000 doctor and 3,800 lawyer customers. The private wealth management division serves its customers through 116 advisers in 60 markets from Maryland to Miami.
Mr. Allen said the law firm associates program "fits with our overall life-cycle strategy to work with professionals throughout their career cycle."
Burton Greenwald, an analyst at BJ Greenwald Associates in Philadelphia, said seeking out professionals before they become wealthy is sound strategy for companies like SunTrust but that offering private banking services to people who do not qualify can be costly.
SunTrust carefully weighed the costs and benefits, Mr. Allen said, and decided the program is worth its expense.
"We realized that their needs are not that great," he said. "They have a lot of student debt and high income. We can offer them a simplified financial planning model and show them how, based on their income level, they can eliminate their debt and start acquiring assets."
Mr. Allen said his group will continue to explore ways to "drill deeper" for relationships with lawyers in SunTrust's footprint. For example, he said, summer associates are worth exploring further.
SunTrust ran its associate program on a trial basis with summer associates at five Atlanta-area law firms this year, and Mr. Allen said the response was "overwhelming."
"We didn't roll these trials out to pick up business," he said, "we did it to test our program, but we ended up getting some business from these summer associates."
