Depending on whose research you believe, studies generally state that the millionaire population is growing at three times the rate of the general population, thanks to two-income households, inheritances, successful entrepreneurial efforts, a long bull market and other factors. In their recent bestseller, The Millionaire Next Door , authors Thomas Stanley and William Danko identify a burgeoning class of millionaires that is nothing if not ordinary. Often cost-conscious and modest in their means of lifestyle, this new breed of millionaire can be difficult to identify. Subsequently, banks that are rigid in their definitions of upscale or emerging affluent prospects may lose out in the process. Banks may be challenged on several fronts in capturing this audience.
Experts say industry consolidation is one factor that has put banks under pressure.
For example, when banks merge, breakdowns can occur in customer service in trust departments. Nationally, there are several instances where merged banks have taken their trust business out of the local area and have consolidated it into a major and often distant city. Pricey merger deals can also lead to significant headcount reductions which impede service quality. Quality trust personnel or asset managers whose jobs aren t in peril may chafe at merged-bank management philosophies and leave for greener pastures. Beyond internal obstacles, there s also the variety of nonbank competitors to contend with.