In south Texas, bank advisor Julian Cruz finds the majority of his business south of the border from clients who are worried about the investment and political risk in Mexico.
To be sure, most of his Mexican clients are already customers of the bank and get referred to him by tellers and loan officers. But once he has them on board, he travels to Mexico a couple times a month for client visits, usually to Monterrey about 150 miles away.
“I have about 300 clients,” says Cruz. “About 250 of them live in Mexico. The rest are local people here in McAllen.”
The difference between the two groups of clients is pretty significant. “My local clients may have $25,000 to $35,000 to invest,” he says. “But my clients in Mexico typically have $350,000 to $400,000.” They tend to range from “middle class to excessively wealthy people, and they’ll hop across the border here to McAllen to do their banking because they are concerned about political risk in Mexico and like to keep their money here in the U.S.”
“In Mexico, having dollars is a safety move, and that makes Mexican clients a major business at our bank.”
Monterrey also offers a bigger market. With 4 million people in the city and surrounding area, it is the third-largest metropolitan area in Mexico.
“What gives me an edge is that my parents came here from Mexico, and so I grew up speaking Spanish. I speak it fluently,” he says.
His Mexican clients like to have him come to them, he says, but there is another reason for the frequent trips too, especially in the case of new clients. Because so much of the wealth in Mexico, particularly along the border these days, can be drug-related, he says he and the bank prefer to make on-site visits to clients and prospects to get a sense of where their money comes from.
”We have some clients who are professionals, but the middle class in Mexico is pretty thin. There are a lot of poor people and a lot of very rich people. And a lot of the wealth comes from property or inheritance. People are really into real estate.” He says he asks clients for all the details about their real-estate deals, including closing documents and information about who was buying their property. “Mexico is a lot more strict about these things than the U.S., so people aren’t offended when we ask for that kind of thing.”
Cruz got his start in the investment business just out of college, working for the local J.P. Morgan office in McAllen, where he also found himself dealing with a lot of Mexican clients. He left nine years ago for IBC, which uses LPL as its third-party marketer, because he liked the bank’s approach, which he says is “less aggressive” and more client-focused. Most of his clients are conservative about risk, he says. In fact, the vast majority of the time he spends with them—he pegged it at 98%—they are focused on asset allocation, which is mostly implemented with mutual funds and some variable annuities.
He recently got a big boost when one wealthy Mexican client decided to give him another $8 million to invest.
He says all the traveling can get tiring, but it’s been good for business. Cruz says his book has grown at a rate of 20% to 30% per year and today stands at $140 million in assets under management. There are other perks too. He genuinely enjoys the invitations to weddings and birthday parties, and once drove in a client-sponsored automotive rally. With business benefits and personal fulfillment, that’s the kind of cross-border migration that can benefit everybody in the long run.
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