Wealthy clients are very familiar with wirehouse brand names — a sign that the industry's heavy marketing is paying off. But when it comes to rating the actual services that firms deliver, wealthy clients favor boutique trust firms and private banks.
These are the findings of a study conducted by the Luxury Institute, a New York-based research organization focusing on the consumption tendencies of the wealthiest 10 percent of the nation. (High-net-worth respondents were asked to evaluate the top 30 wealth management firms from Barron's Top 40 list.)
Ultimately, the wirehouses (specifically Merrill, Morgan and Smith Barney) were recognized by respondents for their brand (see table), but considerably less so for the quality, exclusivity and other benefits of their services.
Why the disparity between brand recognition and service? Milton Pedraza, CEO of the Luxury Institute, says the most commonly cited reasons for why the rich favor boutiques — like New York-based Bessemer Trust, which was voted best in every category of the survey by respondents — are the independence of their advisors and the attention they lavish on clients. Another point in the recognition factor: The boutiques tend to rely on word-of-mouth marketing, while the wirehouses favor large-scale advertising campaigns.
| Merrill Lynch | 82% |
| Charles Schwab | 76% |
| Smith Barney | 73% |
| Fidelity | 69% |
| Goldman Sachs | 65% |
| Morgan Stanley | 65% |
| J.P. Morgan Private Bank | 62% |
| Citigroup Private Bank | 60% |
| Lehman Brothers | 60% |
| Bank of America Private Bank | 54% |
| Wells Fargo Private Bank | 53% |
| Mellon Financial | 45% |
| CSFB | 41% |
| SunTrust | 39% |
| UBS Wealth Management | 38% |
| Deutsche Bank Wealth Management | 35% |
| HSBC | 33% |
| Deutsche Bank, Alex Brown | 31% |
| U.S. Trust | 29% |
| Northern Trust | 26% |
| PNC Advisors | 26% |
| Bank of NY Private Client | 24% |
| U.S. Bank Private Client | 21% |
| Wilmington Trust | 21% |
| Harris Private Bank | 18% |
| Neuberger Berman | 16% |
| Bessemer Trust | 15% |
| William Blair | 13% |
| National City Private Client | 10% |
Source: Luxury Institute survey of over 400 wealth management clients with a minimum household income of $200,000 and net worth of $5 million.
