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One of the basic assumptions of the wealth management industry is that investing professionals should be based in the same cities as their clients. Gunjan Kedia asked her team at U.S. Bancorp to challenge that belief.
Sure, technology makes it easy to offer advice from anywhere. But that wasn’t the main driver to upset the status quo. As part of its commitment to closing the racial wealth gap, U.S. Bancorp wanted to ensure clients had access to diverse professionals, said Kedia, vice chair of wealth management and investment services. So the company now offers a diverse slate of professionals to clients even if it means adding a virtual member to a client’s team.
The Minneapolis company also instituted a program to help its staff understand what kinds of investments are important to diverse clients, Kedia said. The moves were based on the bank’s research on women and Black investors.
“Our Black respondents very clearly told us it matters to them that the team they’re talking to matches their lived experience,” Kedia said.
Under her leadership, the company has been active on other fronts, as well. The wealth management unit bought Philadelphia-based PFM Asset Management LLC in late 2021, nearly doubling assets under management. Before the acquisition was announced in July, U.S. Bancorp managed about $160 billion in assets. It ended the year at roughly $420 billion. The wealth management business now accounts for about 17% of bank revenue, up from 10% when Kedia became vice chair in 2015.
The bank also added to its product menu, including creating a cryptocurrency custody product for the bank’s institutional fund manager clients, who were looking for the safety of a bank solution, Kedia said. The product helps investment managers store private keys for Bitcoin with assistance from a sub-custodian, NYDIG.
Kedia’s division also decided to give every investor unlimited access to live advisers with no extra charge, no matter how much they had invested. “We think that a model of human and digital together will really help young investors,” said Kedia, noting that surveys show even so-called “digital natives” want access to real advisers.
Source: americanbanker.com
