Bank of America-US Trust's Tim Maloney

Matt Smith

14 January 2008

Tim Maloney is very accustomed to running a highly acquisitive wealth management business, but he admits the key to leading his firm’s next phase of growth will be working with what he already has, Matthew Smith reports from New York. Tim Maloney is in charge of the central region for Bank of America-US Trust Private Wealth Management, one of five regions operated by the largest private wealth management firm in the US encapsulating nine states in the geographical centre of the country. Mr Maloney was brought into the central division executive role from Bank of America's brokerage business after the bank acquired US Trust in 2006. Lately, Mr Maloney has also been involved in discussing plans for LaSalle Bank’s private banking operations, which will fall under his purview, following BoA’s win to purchase the regional banking business from ABN Amro in April 2007. Combination of the predominantly commercial banking operations of LaSalle with Bank of America has just begun, and the transition process will continue into the middle of this year. Mr Maloney declined to disclose how many private banking advisors and executives were included within LaSalle’s private banking operations, most likely because he is aware LaSalle advisors will be a target for poaching by competitors during their assimilation into the new organisation. If any executive across the BoA-US Trust private wealth business knows what it is like to run a wealth management business amidst acquisitions, it’s Mr Maloney. “We obviously have been acquisitive over the years certainly in terms of the private wealth business, the US Trust combination, and to a lesser extent the La Salle combination, these are really profound investments in this business for us,” he said. In total BoA-US Trust currently manages around $225 billion in client assets in total and employs 5,000 private client associates across the US. Mr Mahoney is in charge of $45 billion of those client assets not including the LaSalle private wealth assets and advisors that are in the process of being assimilated into his network. With no new acquisitions of any significance on the horizon for the wealth management firm, the new year for Mr Maloney will bring a different approach to prospecting clients in the $3 million and above of investable assets client category. “We have a broad existing private client base and we have a lot of clients residing in other lines of our business who are high net worth customers of BoA that we don’t serve yet. So we see a tremendous opportunity to more broadly serve the clients that already exist within the business.” This organic strategy alluded to by Mr Mahoney is partly forced upon the wealth management business by regulators, but mostly it is standard practice for any wealth management business that exists within larger broad based financial services institutions. Currently American banks are prevented from increasing their deposit base through acquisitions that might push them over the 10 per cent federal threshold. The $21 billion acquisition of La Salle bank brings the BoA right up to the deposit cap threshold, leaving it with about 10.075 per cent of deposits nationwide, according to a filing lodged by the firm in June. “To the extent that Bank of America as a corporation is right up against the deposit cap, we think it certainly brings into focus the need to optimise the client base we already have. And that’s what we’re trying to do,” Mr Maloney said. Mr Maloney points to the corporate and commercial bank as areas within the larger firm likely to contain private client gems waiting to be mined. He told WealthBriefing that he planned to learn from the discipline of communicating across business lines from the former European-owned bank that BoA recently acquired. “The success of that business was built on the partnership between the wealth management and the corporate and commercial bank. They viewed those clients in a corporate and holistic fashion to meet business and personal needs. That was a hallmark of business and is fundamental to how BoA wants to grow its business – to collaborate across business lines,” he said. Mr Maloney has been with Bank of America since 2001. He was president of the same (central) region in Bank of America’s legacy private bank pre-US Trust before working on the brokerage side of the business where he was president of Banc of America Investment Services. A veteran in the US wealth management industry, having spent 20 years as financial advisor, branch manager and sales director within large broad based investment firms including Dean Witter Reynolds and Morgan Stanley, Mr Maloney is all too aware that key to running a successful business such as this is finding and recruiting talented advisors. BoA-US Trust has certainly been among the most visible wealth firms in the US market in the last year, hiring 240 client-facing advisors since end of Nov 2006. Mr Maloney said: “Our ability to retain and attract talent I think is critical for our ability to serve clients across that wealth spectrum… The market place for talent is very competitive and we certainly recognize that.” During the last year Mr Maloney happily notes his wealth business has been at or below industry average attrition rates despite acquisitions that can often lead to increased fallout. BoA-US Trust’s private client business is made up of teams that incorporate at least one of four different types of “associates” including a private client advisor (the senior member of the team), private client manager, portfolio manager, and trust officer. When Bank of America acquired US Trust in November last year for $3.3 billion to create the largest private wealth manager in the US, the biggest concern amongst US Trust leadership and advisors was the watering-down of its offering by the more main stream institution. The bank managed to avoid what some analysts at the time were predicting could have been a mass-exodus of US Trust advisors by retaining the US Trust name and appointing US Trust executives to prominent positions in the leadership team. The president and CEO of the private wealth entity, Frances Aldrich Sevilla-Sacasa, was second in charge at US Trust before the acquisition. Now the firm will hope to use the coveted US Trust banner to convince high net worth individuals that the largest deposit taking institution in the US is able to offer the same service as a smaller specialty firm of family office. “I don’t think our size in any way inhibits our ability to service that market. Quite the contrary. I think it enables us to service them better,” Mr Maloney said. While BoA-US Trust’s stated target client has $3 million of investable assets, Mr Maloney says he is able to cast his net wider than other smaller institutions. “Our focus can be a broad segment, recognising that clients today who may have an investable net worth of, say $5 million, could be the next $100 million client five or ten years from now,” he said. Mr Maloney’s success in targeting and keeping clients in the high net worth and ultra high net worth client category will depend on his ability to transcend the commoditised reputation of banking networks by convincing the industry’s best and most seasoned advisors that BoA is a place they would want to work. “What we needed to do was demonstrate that we could make that big enterprise small for our associates, which I think is critical, especially in the private wealth management business, that you can have all of these capabilities but they have to be organised in a way that is unique and valued by the associates and the client,” he said. After a couple of years of feverish consolidation in the US wealth management industry, BoA’s ability to “make that big enterprise small” for its associates under the US Trust banner could become a barometer for whether big banks can make private wealth management work.