Tuesday, November 1, 2011

Wells Fargo caters to the 1 percent

Posted By on Tue, Nov 1, 2011 at 1:18 PM

Lil ol' Wells Fargo
  • Lil' ol' Wells Fargo
If this past weekend's free community event hosted by Wells Fargo made you feel all warm and fuzzy, and think maybe WF really is just a nice little community bank, then here's the reality check.

The Charlotte Observer ran a story this morning on the bank's new "boutique" service for the super rich — you know, that 1 percent of folks the Occupy movement does not represent.

Wells Fargo is launching a boutique business to serve families with at least $50 million in assets, an example of the banking industry's increasing focus on high-net-worth customers.

Abbot Downing, as it is to be called, will manage $27.5 billion in assets for about 575 clients and will offer wealth management, investment and banking services for families and their endowments and foundations.

It has about 300 employees, including a team of about a dozen employees in Charlotte and 80 across North Carolina.

The brand will roll out in April. It merges Wells Fargo's Family Wealth and Lowry Hill businesses and Wachovia's legacy Calibre business.

What Charlotte really needs are loans for small businesses and home loans with reasonable interest rates.

Not that banking news is all bad today. In the department of too-little, too-late, it looks like public pressure has forced Bank of America and Wells Fargo to scrap plans to charge those little-people debit-card fees.

As the Biz Journal reported yesterday:

The abrupt changes in policies should be seen as a win for customers who made their displeasure known and received concessions. But how long will it last?

Banks lost billions in annual revenue when Congress took away their unbridled ability to charge fees to merchants whenever a debit card is swiped, capping such charges at 21 cents on average. Banks implemented the monthly fees to recoup that cash. All three large banks expected more than $1 billion a year in lost fees.

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