Wells Fargo opens business for the ultra-wealthy
By Ashley Lau
(Reuters) - Wells Fargo & Co (WFC.N: Quote) opened its new Abbot Downing business on Monday, officially merging two of its wealth management units under a new brand it hopes will expand its market share of America's richest families.
The new business, catering to ultra-high-net-worth individuals and families with $50 million or more in investable assets, resulted from the combination of Wells's Family Wealth unit and its Lowry Hill subsidiary. The name Abbot Downing comes from the 19th-century New Hampshire builder of the stagecoaches that have come to represent Wells Fargo.
Since Wells first publicly announced the planned merger in November, the combined business has grown roughly 20 percent to $32.9 billion in client assets under management. In those five months, Steiner said the group had added five billionaires and 13 individuals with $100 million or more in investable assets to its client base.
"We've had new success in bringing in new foundation assets," said Jim Steiner, Abbot Downing's president. "People are leaving more money to foundations and endowments."
Steiner said the biggest drivers of new wealth have been cash from the sale of company stakes through initial public offerings and mergers and acquisitions.
Steiner estimated that about 10,000 households in the United States have $5 million or more in investable assets. In an October study of 72 multifamily advising firms, the average client asset size was $48.4 million, according to research and consulting firm Family Wealth Alliance.
Steiner said the decision to rebrand the combined business was meant to establish a small-firm feel. Wells intended to distinguish its family wealth business from that of other bigger competitors, like the $62.4 billion Bessemer Trust. Abbot Downing was aiming to keep a client-to-adviser ratio of 15-to-one, which Steiner said was low. Continued...