Berko Blisters Bank of America
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( http://www.suburbanchicagonews.com/couriernews/business/berk o/319824,3_3_EL30_BERKO_S1.article ) March 30, 2007
Dear Mr. Berko: Way back in 1999 you told me that it would be in our best interest to have our account managed by U.S. Trust because they could give me and my husband the personal services we need. They managed our stock account, paid our bills, arranged our travel plans, took care of our properties when we were away, and assisted us with our bookkeeping and taxes. Now we learned that U.S. Trust is being bought by Bank of America. Please give us your thoughts on this large institution and please advise if we should allow them to manage our affairs.
W.P.
Boca Raton, Fla.
Dear W.P.: Yes, I remember our conversations and please tell your delightful husband that my sister followed his advice and the results were outstanding, awesome and magnificent.
Certainly you've heard that old axiom, "if your bank is bought out by a larger bank, then it's time to change banks." So race, run, rush, dash and fly like a bat out of Hades to Bessemer Trust in the U.S., or Butterfields or N.M. Rothschild in London or Pictec & Cie or Lombard Odier in Geneva, Switzerland.
If you allow your affairs to be managed by Bank of America (BAC-$50.53) you will most likely be swallowed up into the biggest black holes in the Orion or Trifid Nebula. Charles "Charlie" Schwab is selling its wealth management subsidiary of U.S. Trust to BAC for $3.3 billion so Charlie can concentrate its expertise on the "do-it-yourself" investor. Charlie bought U.S. Trust in 2000 hoping it would be a natural fit for its customers as they began to accumulate wealth. However Charlie's independent, do-it-yourself clients had no use for the venerable 155-year-old U.S. Trust, whose white-shoe clientele is accustomed to personal pampering and red carpet treatment.
Compared to U.S. Trust, Bank of America is a hillbilly dressed in a three-piece pinstripe suit. So if you prefer martinis to moonshine, I suggest you move your account soon. The merger should close this spring and most of the good folks who assisted you at that blue-blood blue-chip bank will be out of a job soon. Last year, U.S. Trust's managed accounts produced about $835 million in revenues and BAC's green eyeshade bean counters intend to reduce U.S. Trusts costs by $200 million and plop its 13,000 clients into BAC's 115,000-account cesspool. The change will be like moving from the polo fields of Palm Beach to the cock fights in Miami's Little Havana.
At U.S. Trust you and your husband were known by name and you enjoyed a warm, personal relationship with your representatives. They actually cared about you and that's what made them so special. At BAC, no matter what you're promised, you will be a cold, hard, impersonal number among their 128,000 managed accounts . I've heard good things from folks who have wealth management accounts at U.S. Trust, Bessemer Trust, Rothschild, Butterfields, Pictec, Lombard, even Union Bank of California and UBS Switzerland. I've also been privy to the investment results from each of those private banks and as cautious as I can be ... I am not unimpressed!
However I know several couples who have wealth management accounts at BAC and as cautious as I can be, I am not impressed. Bank of America is a huge retail institution; soon to be the largest as well as the most profitable retail bank in the U.S. That huge size can be protective and comforting, sort of like having an elephant in your bed. But only heaven can help you if that elephant sneezes and rolls over.
Frankly, I've not heard one word of praise from several folks whose substantial accounts (and personal services) are handled by the Bank of America. The reason behind BAC's recent account management success is that it is able to attract the coveted customer who is not demanding or sophisticated and is satisfied with mediocrity. And how would you regard a bank that puts Braille on its drive-through teller machines?
I recommended U.S. Trust to you folks because I knew some of the folks there personally and by reputation. I recommended U.S. Trust way back then because I also knew a few of their accounts who couldn't say enough good things about their professionalism, their services and their account management. And for the same reasons I am recommending Pictec, Lombard, Rothschild, Bessemer, and Butterfield. There are certainly other private banks equally as capable in this country and across the pond. However, I cannot recommend them because I lack the necessary personal information to do so.
Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, FL 33429 or e-mail him at [email protected].
The Bank of America announced yesterday that U.S. Trust Corp. CEO Peter Scaturro will not come on board when it completes its acquisition of U.S. Trust later this year, dealing what the Wall Street Journal calls “a setback to the big bank’s ambitious push to become the leader in the lucrative business of managing rich people’s money.” Scaturro was supposed to continue leading the exclusive private bank, which requires a $2 million deposit to open an account and has about $93 billion in client assets. Announced in November, the deal was supposed to allow U.S. Trust clients to continue to enjoy their preferred treatment, while benefitting from the giant bank’s broad reach. People familiar with the situation say that after numerous disagreements over how the integrated unit would be run, Scaturro decided to step down this summer. Differences of opinion include the big bank’s insistence that U.S. Trust switch over to its computer platform, Scaturro’s reluctance to cede his autonomy over guiding the unit, and BoA’s failure to appreciate the high-cost methods private banks use to lure clients and keep them happy. The Journal says the setback is unlikely to derail the acquisition, but that it highlights the difficulties big banks have in changing their mass-market strategies to suit the ultra-wealthy. Frances Aldrich Sevilla-Sacasa, U.S. Trust president, is likely to replace Scaturro, a person close to the matter said.
MALCOLM BERKO
Malcolm Berko began his career in the investment business in 1957, when
he was a sophomore in college, as an evening margin clerk for Merrill Lynch,
Pierce, Fenner & Smith. Later he joined Thomson McKinnon Securities in St.
Petersburg, Fla., as a stockbroker. Today he is a financial adviser at a
regional brokerage firm in Boca Raton, Fla. He is also a published poet, an
amateur photographer and a former nationally ranked handball player. He
has climbed Mount Everest twice and frequently backpacks in the Himalayas.
He has hosted a weekly radio talk show for more than a decade. He has two
grown children, Hilary, an attorney, and Adam, a physician.
[quote=Philo Kvetch]
MALCOLM BERKO
Malcolm Berko began his career in the investment business in 1957, when
he was a sophomore in college, as an evening margin clerk for Merrill Lynch,
Pierce, Fenner & Smith. Later he joined Thomson McKinnon Securities in St.
Petersburg, Fla., as a stockbroker. Today he is a financial adviser at a
regional brokerage firm in Boca Raton, Fla. He is also a published poet, an
amateur photographer and a former nationally ranked handball player. He
has climbed Mount Everest twice and frequently backpacks in the Himalayas.
He has hosted a weekly radio talk show for more than a decade. He has two
grown children, Hilary, an attorney, and Adam, a physician.[/quote]
That's his side of it, see what the NASD has to say about him.
MALCOLM J. BERKO
CRD# 19483
He is no longer registered. But he does have a trail of customer disputes. And most of them are recent. Maybe that is why he is not registered anymore...