The line has been repeated so often that it's practically a cliche: Banks need to do a better job of coordinating the private banking, trust, and investment management services they sell to the wealthy.
But while this vision has been talked about for years, experts say banks are still having a difficult time fulfilling it.
"We're at that point in the discipline where people are experimenting with solutions," said Michael Garelik, a senior consultant in the national financial institutions practice of Towers Perrin, New York.
"There's a big opportunity for competitive advantage, because nobody has figured it out yet," he added.
The problem, he explained, is that banks have found that professionals in these areas are so different from one another that it is hard to get them to cooperate.
Private bankers, for instance, are said to be risk averse and more worried about bad loans than aggressive sales. Trust officers are seen as having a legalistic bent, more focused on interpreting trust assignments than on getting new business. By contrast, investment managers are often considered aggressive Wall Street types.
Getting these different disciplines to mesh can be good business. Most wealthy families need the services each provides, so properly trained specialists can help banks increase revenues by recognizing opportunities. Furthermore, many big nonbanks, including Merrill Lynch & Co. and Fidelity Investments, have made major strides in bundling trust, banking, and investment services in recent years.
As a result, bankers remain intensely interested in how best to coordinate these activities, experts say.
"It's a subject that's eternally interesting to private banks," said Thomas C. Clark, a senior vice president of U.S. Trust Company of New York, which specializes in serving the wealthy.
And, he added, "it's very difficult to do."
Mr. Clark said he believes this is why a panel discussion he participated in at a trust conference in February was well attended.
The session focused on integrating private banking, trust, and investment businesses at banks. In his presentation, Mr. Clark described changes that U.S. Trust made six years ago that he said have proved in subsequent years to have been well worth the effort.
U.S. Trust assembled private bankers, investment specialists, and trust officers into client-focused teams. The trust officers - nearly 40 in all - were charged with drumming up sales across business lines.
The trust officers were paid for their extra efforts, Mr. Clark said. Still, about one in 10 were unable to adapt. Most of those left voluntarily within a couple of years.
Even so, Mr. Clark said that by 1993 the effort had tripled the loans U.S. Trust made to its investment management clients, while writeoffs for bad loans were minuscule. U.S. Trust also showed big gains in related businesses such as preparing taxes and executing wills.
Another speaker at the session was Wilma J. Smelcer, an executive vice president of the Bank of America Illinois unit of BankAmerica Corp.
In 1991, Ms. Smelcer transferred from a senior position in commercial lending to head of private banking at BA Illinois - which, until it was bought by BankAmerica last year, was Continental Bank Corp.
Ms. Smelcer's first goal was to expand the private banking business by cultivating contacts through commercial lenders, who were regularly calling on wealthy small business owners and corporate executives.
Ms. Smelcer said that several delicate cultural issues had to be settled, including getting commercial lenders to trust private bankers with their best clients. A compensation system also had to be devised to reward commercial lenders for referrals.
Though the changes were difficult to make, they have proved worthwhile, she added. Private banking revenues have been growing at a much faster pace since the change was made, she said.
