Under plans to expand its private banking presence, Wachovia Securities said on Thursday it would hire about 300 private bankers over the next three years, more than doubling its number of private banking relationship managers, according to a release.
This news comes a week after Wachovia announced a deal to acquire A.G. Edwards for about $6.8 billion in cash and stock to create a b/d with $1.1 trillion in client assets under management and nearly 15,000 financial advisors.
Why the hiring frenzy? The release offers the following reason: “The growth in the number of American households with $250,000 to $5 million in investable assets is projected to increase 30 percent from 14 million in 2005 to 18 million by 2010.” But it’s fair to ask, aren’t these the same folks that Wachovia’s b/d reps and independent advisors serve?
Teresa Dougherty, a spokeswoman for Wachovia says the private banking unit and Wachovia Securities, the b/d arm, are very similar but that ultimately the “distinction really resides with the client,” as some clients prefer the private banking model and some prefer a financial advisor/brokerage model.
“The increase in private bankers should have no affect on our financial advisors as Wachovia has always had a ‘private banking’ unit,” Dougherty says. “Our financial advisors target the affluent investor at Wachovia Securities—$250,000 to $5 million is our ‘sweet spot.’ However, our FAs work with investors whose assets may not reach that minimum as well.”
The release boasts that since 2004, the Private Advisory Group added 30,000 new clients, with double-digit growth in loans, deposits, revenue and investment revenue each year.
In addition, on Thursday, Morrison Creech was named the new managing executive for private banking, leading a team of 240 private banking relationship managers, (formerly known as the Private Advisory Group, bankers who served this segment used to report through Wachovia’s retail bank)
Creech, based in Charlotte, came to the firm in 2003, as Managing Executive of Credit and Deposit Services, and under the newly created role, he will report to Stan Kelly, president of Wachovia Wealth Management. Creech will be responsible for the overall strategy, growth and performance of private banking, and the new group will target high growth markets such as Florida, Texas, California and New York.