Not only are the rich getting richer, but there will, no doubt, be more of them, said Peter Bain, executive vice president of Legg Mason of Baltimore.

The number of households with more than $1 million in investable assets has grown from 1.15 million in 1995 to 2.7 million last year, according to Cerulli Associates of Boston. Bain thinks the number of millionaires will continue to grow.

"I believe the high net worth sector will expand substantially due to the enormous amount of wealth creation over the past decade driven by a long, stable growth pattern in the economy," Bain said. "Technological development has, and should continue to lead to high productivity in many sectors."

As the new head of high net worth business at Legg Mason, a newly-created position that Bain accepted in June, Bain is bound to be enthusiastic about wealthy investors.

Bain has been charged with more than doubling Legg Mason's high-net-worth business, which it defines as accounts of $2 million or more, from seven percent of the firm's $125 billion in assets under management to 15 percent of the firm's assets under management by 2003 or 2005. That means Bain will have to add at least $8 billion worth of high-net-worth accounts to Legg Mason's existing $8.75 billion in such accounts.

This market is important to any investment management firm that wants to continue to grow, Bain said.

He plans to build this business by continuing to acquire well-known, regional investment management firms that cater to wealthy investors. Legg Mason already owns three such companies -Bartlett & Co. of Cincinnati, Gray Siefert & Co. of New York and Berkshire Asset Management of Wilkes-Barre, Pa.

In addition, last October Legg Mason formed a joint venture with a Boston law firm specializing in investment banking, mergers and acquisitions, securities underwriting and venture capital, Bain said. This affiliation with the firm, Bingham Dana LLP, gives Legg Mason's wealthy customers an entree to investing in such deals, Bain said.

Legg Mason also has a specialized consulting group to help wealthy investors increase the value of assets other than securities and bonds, Bain said.

Acquiring investment managers who specialize in the high-net-worth business is not easy, Bain said. To make a deal with Legg Mason more attractive to potential partners or acquisition targets, Bain intends to highlight the innovative, custom-built portfolios that Legg Mason's investment advisors create specifically for high-net-worth investors, Bain said.

"There is no cookie-cutter in the high-net-worth world, and I think a lot of financial service firms try to build products that can be generally applied to wealthy clients," Bain said. "Legg Mason for more than a century has been listening to these clients and offering them sophisticated, targeted products, such as trust capabilities or specific hedging strategies."

Bain also anticipates that it will be important for potential partners to have Legg Mason's help in improving their computer systems, he said.

Prior to joining Legg Mason, Bain was a managing director at Berkshire Capital Corp., an investment banking firm in New York.

Bain expects that his years of structuring mergers and acquisitions at Berkshire and before that as vice president in the mergers and acquisitions department at Merrill Lynch of New York will help him in his new role.

Bain said he has a great deal of respect for the individualism and grit of many high-net-worth people and of "the role their values have played in . . . enabling Americans to innovate and create."

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