Just one for now, but the business-service provider says more are coming. SEI Investments is trying to push its boomer-centric version of wealth management into the bank channel. The investment-technology provider sees its Wealth Network, a high-touch, retainer-based wealth-advisory program, as a natural fit for banks that are looking to differentiate themselves while capturing high-net-worth assets in an increasingly competitive marketplace.

Banks have been losing private-client wallet share for years, mainly to brokerages and boutique wealth managers. A new study by 3C Financial Partners, a Los Angeles-based investment bank, says that North American private banks and trust companies have seen their share of professionally managed high-net-worth assets fall from 86% in 1995 to 38% by the end of 2004 – even as global high-net-worth assets more than doubled. By 2010, banks’ share of those assets will have fallen to 29%, according to 3C.

Goldmine

But for all that erosion, SEI thinks banks are in a good position to compete for high-net-worth assets. “Banks are sitting on a goldmine,” says Al Chiaradonna, head of strategy for SEI’s private banking and trust group. “They have the branding, the assets and the resources in place to win the new wealthy.”

By “new wealthy” Chiaradonna means well-to-do baby boomers, the demographic of choice for SEI’s Wealth Network. Of course SEI isn’t alone in viewing boomers as a prime market for wealth management. After all, boomers – those now between 40 and 60, give or take – account for one of every three Americans and own 40% of all private assets. Generally speaking, they’re in their peak wealth-accumulation years. The older ones are coming into piles of new liquid assets as they prepare for retirement by selling businesses, exercising options and rolling over retirement savings. Tiburon Strategic Advisors, a financial-service consultancy based in Tiburon, Calif., sees boomers driving total consumer-held investable assets from under $20 trillion today to around $30 trillion by 2010. And by then the boomer generation’s long march into retirement will just be starting.

But winning business from well-off boomers calls for a special touch, says SEI. Baby boomers are fussy, skeptical of authority, and they crave user-centered products and services that satisfy their lifestyle aspirations. SEI sees that assertion borne out by the Me-generation’s predilection for $3 cups of “gourmet” coffee and custom-built Harleys. And though boomers may be less formal than their Depression-era forebears, they have sky-high expectations – and they’re used to having those expectations met.

Baby boomers “have redefined every stage of life they entered,” SEI’s CEO Al West told delegates to a wealth conference sponsored by the American Bankers Association last March. “They invented rock and roll, free-sex via the pill, two-wage-earner families, SUVs and minivans. Now it’s Botox injections and Viagra. With their market power, they have always gotten what they wanted.”

Change agents

And SEI thinks that boomers want more from their wealth managers than investment advice and estate planning. Specifically, they want help managing their “life events.” Those include turning points such as retirement and next-career planning as well as potentially more enduring conditions like caring for invalid parents or special-needs children. In other words, satisfying boomers calls for a rigorously holistic and personal-goals-based approach to wealth management.

The Wealth Network includes a best-of-breed investment platform, a lead-generation system, wealth-advice modules and business-assessment tools. It’s further supported by SEI’s in-house strategy team and a panel of outside experts.

Right now the Wealth Network is in two channels, not counting SEI’s own multi-family office for the ultra wealthy. Registered investment advisors (RIAs) can become franchisees – six have, which puts SEI ahead of its previously stated objective for the year-old program – or they can tap into the business-service version of the Wealth Network. And, as of early this past summer, banks have been eligible for the plug-and-play option.

But banks that choose the Wealth Network had better be prepared to make some changes. “If you’re really serious about providing a completely new, life-oriented client experience to wealthy boomers, you will have to break out of the mold of traditional industry thinking,” SEI’s West told bankers at last spring’s ABA conference. “The change has to be ingrained in your culture.”

For SEI’s Chiaradonna, making that kind of cultural shift takes guts. “You need courage to re-think how to win the wealthy,” he says. “You need leaders who are significant change agents, who look for new curves of innovation and are willing to destroy processes in place.”

Purple cow

So far the Wealth Network has had one taker in the banking space, Union National Community Bank of Lancaster Co., Pa. But Chiaradonna says the push into banks is just getting off the ground. In any case, he adds, SEI is in talks with “three or four” others.

Union National’s COO Michael Frey says the decision to go with SEI’s Wealth Network came from its determination to fight for private-client assets in a competitive market. “This is a very vibrant community with a lot of wealth and lots of competition,” he says. “We’ve got big banks, wirehouses, RIAs – everybody’s here. As a smaller player, we looked at that and decided we didn’t want to be an also-ran.”

That stance seems to fit with Union National’s culture. On the 153-year-old bank’s website there’s a message from CEO Mark Gainer extolling the virtues of being a “purple cow” in a herd of mundane-colored creatures. “Our philosophy is to become the ‘purple cow’ of banking,” Gainer writes. “We want to be remarkable, we want to stand out, we want you to have a world-class experience and tell all your friends so that we can provide the same to them.”

Frey says Union National was especially eager to use the Wealth Network to help it do a better job of turning business-banking customers into wealth-service clients, particularly after they’d sold their businesses. The bank had been losing a lot of those clients to big-name competitors, says Frey.

As it happens though, the bank’s first Wealth Network client was a former business customer who decided – a little hesitantly, says John Boyer, an executive with Union National’s wealth-management unit – to look into the bank’s private-client offerings. “This is a man who sold his business and came into a significant amount of wealth,” says Boyer. “I’m not sure we would have been able to retain him before we had the Wealth Network.”

Unconvinced

In addition to targeting its older business-banking customers, Union National plans to use the Wealth Network to attract younger professionals and business owners in Lancaster Co. “We see a lot of potential in working with people – I guess I’d call them ‘mass affluent’ – who are still at the accumulation stage,” says Frey. That, he adds, makes the bank flexible about its minimums. As a rule though, Union National is angling for clients with at least $1 million in investable assets.

SEI may be winning converts to its view of wealth management, but some industry players wonder if the Oaks, Pa.-based company isn’t over-stating its case.

“We all want to put ourselves in the role of the client’s personal consultant or relationship quarterback,” says JT Scully, a director of Rockville, Md.-based Lydian Wealth Management. “Creating a different name for something doesn’t always make it all that different in fact.”

Meanwhile Tony Greene, head of Atlanta-based Stillpoint Advisors’ family-office practice, thinks the Wealth Network’s promise of super-high-touch model – which includes things like theater outings and wine-and-cheese parties for prospects, and a board-game to help clients understand their own life-goal priorities – may attract super-needy customers. “Our clients are fully-formed adults who already have friends,” he says. “They want advisors they can trust, not wine-tasting parties.” –FWR

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