Bank of America Corp. (NYSE:BAC) not only became the world's largest bank with its $50 billion acquisition of Merrill Lynch & Co., it also became the world's largest wealth manager. According to a survey from the wealth management consulting firm
Scorpio Partnership, BofA, with $1.5 trillion under management in 2008, took the top spot from UBS (NYSE:UBS), which lost billions in the subprime crisis and ended the year with $1.39 billion in assets managed. For a list of the top 10 wealth management banks, see this Bloomberg
report.
At the same time, however, the amount of global wealth to manage has declined. Scorpio's survey found that wealth management by banks and investment managers dropped almost 17% in 2008 to $14.5 trillion, the first decline since 2002. With the pie shrinking, competition for clients has become even more brutal. So it's good news for BofA that its team is retaining or even gaining clients in a difficult market.
It also sheds some positive light on the ongoing integration of Merrill. As we've noted
previously, retaining top Merrill talent is critical if BofA can ever call the merger a success.
Integration leader Brian Moynihan has said the bank is pairing Merrill's financial advisers with BofA
bankers to create new selling opportunities and build the client base. He also indicated that talent defections stabilized in March and are being offset by new hires.
Overall, the Scorpio survey indicated the wealth management industry is growing, up 6% in 2008, despite fewer assets to manage. Whether BofA and other financial institutions front-loading their wealth management teams will be able to maintain staffing levels in a shrinking market is a question they'll likely face going forward.
- Suzanne Stevens
Join Corporate Dealmaker's LinkedIn forum
Juergen Lasowski
And the winners are...
