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Saturday, Jul 13, 2024

Banks Offering Specialty Services Once Reserved for Elite Clients

Private banking , the Tiffany of financial services , has been evolving. Even ordinary banks are courting the high-end client.

“Private banking has grown and matured over the last few years,” said Norma Nelson-Wiberg, branch manager of Private Mortgage Banking for Wells Fargo Home Mortgage in Rancho Santa Fe. “They offer more and more services. It’s a very competitive market. Someone who is doing wealth management, but only does financial planning, might have a harder time.”

Rick Scaramella, senior loan officer and broker in AME Financial’s lending division in Sorrento Valley, said he has noticed that more conventional banks are getting into private banking.

“They are trying to build a private banking clientele, and offering services that you and I would not be offered,” he said. “They offer all these premium features, lower interest rates on mortgages, higher rates on CDs, a wealth of financial planning. You didn’t see a lot of that before.”

Some banks have dropped the thresholds required to get the royal treatment, said Scaramella, offering services based on what tier the client happens to be in. Back in the bad old days, when the real estate market took a dive, he recalled, some banks even redlined people who worked in the real estate industry.

“If you were a Realtor, mortgage broker or in that line of industry, they would not lend to you,” he recalled. “They felt there was a risk.”

Nowadays, banks evaluate clients based on how many other products they might be able to sell them, such as certificates of deposits or auto loans, he said.

“If you can fog a mirror, you can get a loan, that’s how things have changed,” said Scaramella.

Some smaller banks in San Diego say they always have used the personal touch.

Coronado First Bank, for instance, caters to small- and medium-sized businesses, many rich, said Bruce Ives, president and chief executive officer.

“We like the idea of bringing the bank to the person,” he said.

This is like the old-time family doctor who used to make house calls, only, in this case, the bank will arrange for personal visits at their homes or businesses when needed, said Ives.

“And, generally, people who bank with us get to meet with those in authority,” he added.

Coronado First occasionally reaches out to other vendors. But “for the most part, we are able to accommodate their needs without having to outsource,” said Ives.

He said his bank prides itself on providing a quick turnaround on loans.

“We do a lot of construction financing, because a lot of our clients are building homes, especially here in Coronado,” said Ives. “We turn deals around very quickly. If we can’t do a loan, we look for alternative means to obtain the financing.”

All the clients have to do is keep the bank updated on their financial affairs.

“We are very much a relationship bank,” said Ives. “We like to obtain a comprehensive picture of our customers, and build a portfolio.”

This way, when clients want to make those big purchases, he added, the bank doesn’t have to ask for three years worth of tax returns every time they want a loan.

La Jolla’s Regents Bank also caters to small- to medium-size businesses.

“We are a smaller bank, and very high touch and personal-service oriented,” said Monte Schwartz, chief credit officer.

One service geared to high-end customers is the bridge loan, which can help buyers purchase homes without having to sell an existing property, said Schwartz.

With a term of one year, this option lets the buyer arrange for a permanent mortgage without the need to sell their first homes, or make contingency plans if an offer falls through, he said.

“You need to have good equity, and cash flow sufficient to support not only the first mortgage, but you are also financing the full purchase price of a new home,” said Schwartz. “You need to be able to service both debts.”

But, while many clients fall into the $3 million to $5 million range, Schwartz said, “We take care of all of our clients.”

Ives demonstrated a similar democratic spirit.

While Coronado does “tailor a lot of our services to high net-worth individuals,” he said, his bank also “reaches out over the bridge,” and tries to treat customers the same.

“We don’t really distinguish between rich, middle-class and poor,” said Ives.


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