Yes, the rich are getting richer and therefore, deserve continued attention from bankers. But it's the newly rich and soon-to-be rich who offer the most potential for new business.

The upwardly mobile also deserve attention. They are numerous, they represent a relatively untapped market, and they're young enough to offer the prospect of 30-year banking relationships.

It appears that private bankers have gotten these messages and have begun restructuring departments, game plans, and long-term strategies.

Now it is time for marketing, advertising, and public relations officials to follow suit.

Rising Fortunes

There is no getting around the fact that 401(k) plans, IRAs, pensions, and the growing ranks of successful entrepreneurs are bringing thousands of Americans into higher economic strata.

There is no end in sight to this development.

Nor is it unrealistic to predict that the number of households worth more than $1 million will set new highs every year through the remainder of this decade.

Indeed, the current millionaire-household total, well over the 1.5 million mark, has risen more than 35% since the late 1980s.

More important, the new millionaires and near millionaires are finding themselves unprepared for the responsibilities that accompany the accumulation of wealth: protecting, managing, and building on that wealth.

They know that numerous options are open to them and that failure to distinguish between the very good, the good, and the not-so-good (not to mention the bad and the ugly) could cost tens of thousands of dollars over a lifetime.

Throw in the tax penalties that can be levied against those unfamiliar with Internal Revenue Service regulations and one can easily understand the need for help.

|Move Over, Retail'

All this adds up to a potential bonanza for banks that reach the newly rich first, and it augurs a major shift in how advertising, marketing, the public relations dollars are allocated.

In short, it's "move over, retail banking--make some room for private banking." Better yet: lots of room.

Just look at the numbers. While the average retail customer generates about $500 a year in pretax profits for a bank, a typical private banking client adds close to $6,000 to a bottom line.

Though retail customers outnumber those being served by the private banking department, the 12-to-1 profit ratio should not be ignored.

Getting the Message Across

So the shift in marketing game plans is under way.

Marketing, advertising, and public relations activities are becoming much more targeted, and the number of media outlets receiving ad messages and being courted for publicity is rising steadily.

Most advertising dollars used to go to local newspapers and television. Now banks are buying space in publications aimed at doctors, dentists, lawyers, entrepreneurs, retirees, and the soon-to-retire.

One also would expect banks to advertise in newspapers and magazines covering the technology fields, where most successful start-ups can be found, as well as in publications for women, to reflect the increase in the number of households they head.

Another trend is dissemination of advertising and public relations messages that distinguish banks from other providers of financial services.

This push, along with aggressively promoting the skills of people engaged in private banking, is starting to show up at some banks and should be adopted by more.

Marketing plans should include both of these activities, if only because financial planners, accountants, lawyers, stockbrokers, securities firms, and others have been so bold in courting bank customers.

If bankers want to keep their clients and win a large share of the new business that will be generated by the newly rich, they have to face the competition head-on.

At the same time, banks have to work harder at establishing their private banking specialists as valuable sources of information.

Let the media know of the specialists' willingness and ability to respond to questions. Suggest stories on developments in the field. Prepare op-ed and how-to articles. Offer briefings for reporters on trends in money management.

Also, take advantage of cable television station's growing interest in financial news by volunteering to provide spokesmen. And offer to send speakers to service clubs, business groups, and other local organizations.

No Time for Complacency

Because of their branch networks and long-standing customer relationships, banks have a decided edge over nonbanks in visibility.

This edge could disappear, however, as the nonbanks multiply and advertise their services.

Skills in private banking aren't enough to maintain that advantage, let alone build on it. And word of mouth from satisfied customers can reach only so many people.

It's up to marketing, advertising, and public relations departments to reach out to the thousands of new potential customers. Mr. Cole is senior associate at Simms & Associates, a public relations firm in New York. He is a former director of public relations for the New York State Bankers Association.

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