Two midwestern regional banks are courting people with as little as $100,000 to invest by offering service that resembles what’s available in private banking programs — and bucking the conventional wisdom that $1 million to invest is the profitability threshold for these services.

Harris Bank in Chicago and FirstMerit Bank in Akron, Ohio, are in a minority offering private-client-type advice and services to people with as little as $100,000 to $250,000 to invest. Many other bankers and analysts call this approach problematical, insisting that much bigger accounts are needed to make money at that level of service. And a company like SunTrust in Atlanta has devised a mutual fund wrap program to enhance service to less wealthy investors in a less costly way.

Jocelyn Cunningham, global director of securities at Deloitte Consulting, argued that wealth managers targeting the "mass affluent" — generally defined as those with at least $100,000 to invest — will have a difficult time earning a profit if they aim high-end services at these clients. "Really good private bankers are really expensive," she said. These investors also tend to be more price-sensitive, she said, and less loyal than wealthier clients.

However, Patrick Keeley, president of Harris’ Advantedge program, said the Chicago bank is making "a conscious effort to show our respect and appreciation for those people" by offering services very similar to what its wealthier clients get.

In the year since the start-up of the fee-based Advantedge program, which targets people with at least $100,000 to invest, the bank has gathered about $450 million of assets. A client who signs up for the program gets a dedicated adviser for an annual fee of about 1% of the amount invested, with no transaction costs.

Despite relatively small fees, Mr. Keeley insisted, the program is profitable even at $100,000. "We’re not a charity, so we wouldn’t do this if we didn’t make money," he said. Part of the profitability comes from keeping costs down, he added. Advisers are paid a salary rather than commissions, he said, and get bonuses based on criteria intended to measure how well they serve customers rather than sales or asset growth.

The bank works with "lean margins" in this lower end of the business, Mr. Keeley said, but doesn’t skimp on service. "A $100,000 client is getting [the] same stock selection as a $100 million client," he said.

FirstMerit Bank also is targeting lower-end clients with traditionally higher-end services. Mark Vosen, executive vice president of investments at FirstMerit Investment Services, said the company offers its trust and managed account services to clients with as little as $250,000 of investable assets — far beneath the threshold for most other banks’ trust services.

The rationale is that a client with that much to invest will undoubtedly have other needs that the bank can serve, Mr. Vosen said. "If they’ve got $250,000 right now; they have assets elsewhere," including things like life insurance and a home, he said. Also, such a client is ripe for cross-selling of bank services like second mortgages and other loans, he said.

Most wealth managers agree that the mass affluent are demanding more services than ever and that advisers must try not to alienate them because they can become profit generators as they grow wealthier.

Nonetheless, few other banks are offering private-bank-like services to their merely affluent customers. Instead, these banks either send them to the brokerage division or sell them mutual fund wrap accounts, which are less time- and resource-consuming, said Charles Wendel, president of Financial Institutions Consulting in New York.

Peter Bielan, president of the SunTrust Securities Inc. unit of Atlanta’s SunTrust Banks Inc., said the company’s wealth management division last fall created a mutual fund wrap program to offer advice to these very clients. The move was a direct response to these clients’ demand for more personalized investment advice, he said.

Rather than offering intensive, continuous investment management — which is very costly — SunTrust’s mutual fund wrap program gives services that are less comprehensive than what’s available to the wealthiest, Mr. Bielan said.

By relying on mutual funds rather than individually managed portfolios, SunTrust is able to make a hefty profit on mass-affluent clients, Mr. Bielan said. Those with $500,000 to invest are the "sweet spot" for the brokerage unit, he said. Once their asset totals pass about $1 million they are referred to the company’s trust department, he said. In general, clients with $100,000 to invest can be profitable, "as long as you’re offering the right products," Mr. Bielan said.

R. Gregory Knopf, the managing director of Union Bank of California’s HighMark Funds, said the wealth management and trust services of the Bank of Tokyo-Mitsubishi Ltd. affiliate are generally for clients with at least $1 million of investable assets.

Under its premiere banking unit, Union Bank still has trust-like services for clients with less than $1 million, but these accounts are expensive to manage, Mr. Knopf said.

Many of its new clients with less than $1 million are sent to the bank’s brokerage division to invest in mutual fund wrap accounts, he said. Though Union would not turn away a $500,000 client who wants trust-like services, it focuses more on getting clients with at least $1 million, he said.

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