Private bankers flood Las Vegas market

A private banking customer of SouthwestUSA Bank ran out of gasoline while pulling his boat to Lake Mead with a new pickup truck. The bank customer was new to Southern Nevada and didn't know many people here.

So he called his private banker for help, and she brought him a can of fuel.

Nonfinancial services like that are becoming more common as competition increases among private bankers in Southern Nevada. It doesn't hurt to have a personal relationship with a client who is watching his investment holdings shrink during the worst bear market in decades and wondering what he is getting for the investment management fees he's paying.

Russell Price, director of private banking at Nevada State Bank, said his institution is retaining most of its wealth management clients. He, too, tries to establish personal bonds with clients.

One customer was a triathlete. Soon Price was competing in triathlons that combine swimming, bicycling and running. Price now routinely does banking with two different clients during bike rides.

"I put a very high emphasis on relationships," Price said.

So do the managers at Wells Fargo.

Wells Fargo, which opened its first bank and express service office in Northern Nevada in 1860, recently rescued an elderly client who was having trouble getting an Austrian hotel to accept her Bank of America credit card.

The private bank persuaded the hotel to accept her Wells Fargo card so she could get a room for the night, said Robert Hoffman, Wells Fargo regional manager and senior vice president of wealth management.

Little touches like that help as private bank competitors become more numerous in Southern Nevada.

The list of new private banks in Southern Nevada has grown long in recent years.

Chicago-based Northern Trust, which traces its history back to 1889, established operations in Las Vegas seven years ago.

In 2003, Western Alliance Bancorporation, the Las Vegas-based holding company for Bank of Nevada as well as banks in Arizona and California, acquired Premier Trust and Miller/Russell & Associates. The acquired firms provide trust services and wealth management services to wealthy clients.

City National Corp., which operates Beverly Hills, Calif.'s bank to the stars, acquired Business Bank of Las Vegas in 2007 and added private banking services to its menu of services here.

Later that year, Executive Vice President Dallas Haun, a key private bank executive at City National, left to become chief executive officer at Nevada State Bank.

These relative newcomers compete with Wells Fargo, Bank of America, US Bank, Marshall and Ilsley Bank and the Bank of New York Mellon in Southern Nevada.

"The market is increasingly crowded, but everybody has a slightly different approach," said Bob Glaser, senior vice president and manager of private client services for City National in Nevada.

City National counted Frank Sinatra as a customer during the 1950s. California Gov. Arnold Schwarzenegger has disclosed that he banks at City National. Chef Wolfgang Puck, who owns restaurants in Las Vegas, has publicly mentioned his banking relationship with City National.

Russell Goldsmith, chief executive of the $16 billion-asset banking company, is accustomed to doing business with wealthy movie stars and celebrities. Goldsmith, a graduate of Harvard College and Harvard Law School, was chief executive of Republic Pictures Corp. for eight years before it was sold. He also served as chief operating officer of Lorimar Inc. He worked as a private attorney specializing in entertainment law.

The CEO said the bank's relationship with Hollywood celebrities "probably helps" attract some clients to City National.

"Most of our private banking clients don't think of us that way," Goldsmith said. "I don't see it as a big factor, but I think it's a positive."

Glaser said the bank offers the personal touch of a community bank and resources of a money center bank.

City National has $50 billion under management and administration. It counts 62 offices in the San Francisco Bay Area, Manhattan, Southern California and Southern Nevada.

Goldsmith said the institution isn't intimidated by larger banks: "We're used to beating the competition in markets like Los Angeles, New York and San Francisco."

U.S. Trust, Bank of America Private Wealth Management, claims to be the largest private bank in the country with client assets totaling $303.8 billion, including $199.6 billion in assets under management. It counts 114,000 clients.

The private bank doesn't disclose client totals by state. But nationally the number of new U.S. Trust customers grew by 1,200 with $16 billion in new investments and deposits since the beginning of 2008.

The bank believes customers are attracted by the size and strength of the giant financial institutions, which some consider too big to fail.

To qualify as a U.S. Trust client, a customer must have $3 million in investment assets.

"We are offering things that our competitors don't," said Johanna Blake, senior vice president with U.S. Trust in Las Vegas.

In addition to wealth management, trust services and estate planning, U.S. Trust claims expertise in managing oil and gas holdings, timberlands, farmland, ranch land, private equity, hedge funds and real estate, and fine art investments.

"They are not calling 800 numbers," Blake said. "We always have someone answering without voice mail."

Wells Fargo, the other banking colossus in Nevada, doesn't disclose the amount of investment assets it manages.

Well Fargo offers three tiers of banking for the well-heeled.

• Private Client Services for customers with $250,000 to $1 million in assets, excluding their private residences.

• Private Bank for those with assets totaling more than $1 million.

• The Family Wealth Group serves families with a minimum of $50 million in assets, but typically $100 million or more.

"It's totally focused around how do we help families with their legacy for future generations," said Robert Hoffman, regional manager and senior vice president of wealth management.

The bank has two psychologists who work with heirs around the country, seeking to show them how to focus their lives on personal accomplishments, rather than only money, Hoffman said.

A historian will compile a family history for Family Worth Group clients. Then, two or three generations can gather to see a presentation about their predecessors and the legacy they inherited.

Many elderly clients become isolated, particularly after their spouses die. So Wells Fargo helps find and arrange social events for them, such as dinner plays and economic forums.

Although the stock market has collapsed, Wells Fargo's private bank is prospering, Hoffman said.

"I'm coming off my best year ever" for revenue and net income, he said.

Hoffman said he wouldn't be surprised to see fewer competitors drop out of the market.

Russell Price, executive vice president of Nevada State Bank and private banking director, said his operation also is thriving.

Although Nevada State is new to private banking, Price worked for the previous four years with a wealth management affiliate of the bank, Contango Capital Advisors.

The bank in November formed the private banking operation and still relies on Contango for wealth management services.

Nevada State has $1.5 billion in assets under management (in trust and investment accounts) and 200 private banking clients. Nevada State believes the private bank can help long-term small-business clients who are retiring.

"There is the baby boomer population that is starting to go into retirement," Price said. "If you don't have a private bank and a wealth management division, you can no longer help that client."

Western Alliance Bancorporation, the holding company for Bank of Nevada, also is new to private banking in Southern Nevada. The holding company has made gains since acquiring wealth management firm Miller/Russell & Associates and Premier Trust in 2004, said Bruce Hendricks, chief executive of Bank of Nevada.

Premier Trust's assets under administration in Nevada grew by $250 million, and Russell/Miller's assets under management grew by $130 million, Hendricks said.

Northern Trust also says it has prospered in Nevada.

"We started from scratch seven years ago. We have over $100 million in deposits, $750 million in commercial loans and $1 billion in assets under management," said Reed Radosevich, president of the Nevada operations.

The bank is accustomed to lending money to the rich for yachts and airplanes. The bank made a loan recently to a client for purchase of an airplane hanger.

"The best marketing is serving your clients well, because they will refer you to their friends and family," Radosevich said.

The bank conducts a variety of events for clients, ranging from an exotic car competition to a Shakespearean play and an art exhibit at Opportunity Village.

The $79 billion-asset institution serves 24 percent of the Forbes 400 richest Americans, he said.

SouthwestUSA Bank with $197 million in assets is at the opposite end of the spectrum, but it also serves wealthy clients.

"Ours is a concierge bank," Chief Executive Officer and Vice Chairman Patrick Wisman said. "Our checking accounts start at $25,000. You have one person who does everything for you."

The bank started several years ago as a cooperative venture with Nevada Trust Co., but Wisman said the bank and trust company are no longer affiliated.

SouthwestUSA doesn't offer wealth management services.

"That's where the competition is really getting fierce," he said. "We would like to stay in our own backyard."

Contact reporter John G. Edwards at jedwards @reviewjournal.com or 702-383-0420.