Silicon Valley Bank, known for lending to tech founders and investors, is making a bold move to beef up in wealth management
- Silicon Valley Bank's private banking and wealth advisory units have been hiring fresh senior talent in recent months, and tapped industry veteran Yvette Butler in 2018 to head up those business lines.
- "Clients are already here. We've helped them grow their fund or business - and I see our role as private bank and wealth advisory as retaining them," Butler said in an interview with Business Insider.
- The firm's push into wealth management reflects wider factors playing out across the industry, as banks double down on relatively reliable and often sticky wealth and planning services.
- "As I think about objectives for 2020, we need to make a bigger, bolder move in the wealth side," Greg Becker, the chief executive of SVB Financial Group, said last week on an earnings call with analysts.
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Silicon Valley Bank, known for decades as a lender for startup execs, backers, and founders, says it's looking to make bold moves with its wealth management business.
Executives at the firm have been vocal about wanting to dive deeper into the business of managing money, and have hired fresh senior talent over the last year in its private banking and wealth advisory segments to build out a bigger operation. Two years ago, the bank tapped industry veteran Yvette Butler to head up those business lines.
"I see my job primarily as a retention strategy," Butler, who also oversees the firm's premium wine financing business, said in a recent interview with Business Insider. "Clients are already here. We've helped them grow their fund or business - and I see our role as private bank and wealth advisory as retaining."
Butler, who joined the firm in mid-2018 from Capital One, where she led wealth strategies, said she sees her units in a period of increased investment, expanding beyond the lending services long seen as the bank's bread and butter.
"As I think about objectives for 2020, we need to make a bigger, bolder move in the wealth side," Greg Becker, the chief executive of Silicon Valley Bank parent SVB Financial Group, said last week on an earnings call with analysts when he was asked about beefing up business lines over the long run.
Silicon Valley Bank's push into wealth management reflects a widespread trend playing out across the industry, as banks double down on those reliable and often sticky wealth and planning services. It also plays into a cross-selling strategy with existing clients that can prove lucrative.
The bank is stepping up its wealth operations as massive incumbents are grappling with an aging adviser workforce a crop of digital players are also vying for assets.
Meanwhile the wider tech industry Silicon Valley Bank has catered to since forming nearly four decades ago has had some high-profile stumbles, with WeWork's downward spiral sending ripple effects through other SoftBank-backed startups.
"I think one of the questions we get on a regular basis is regarding WeWork, and what was the impact," Becker said on the earnings call last week with analysts in response to a question about the broader initial public offering market's performance.
Becker, who joined the firm in 1993 and was named chief executive in 2011, said he thought WeWork's many troubles have had a "positive" effect on the broader tech and startup industry. He believes it's pushed companies, many of which may not yet be profitable, to more heavily scrutinize their own financial situations.
Tech and talent in focusSVB's private bank was founded in 1993, and the wealth advisory business, a registered investment adviser, was introduced in 2011. The mid-sized Santa Clara, California-based bank, which has some 3,500 employees overall, has reported seeing some benefit from growth in wealth management.
Loan growth in "high-quality" areas like private equity and private bank clients are improving the firm's overall risk profile and credit, the bank said in an earnings presentation last week.
The firm's wealth management units have taken on new talent under Butler. It recently hired a new director of wealth operations, who will be based in Salt Lake City. And Jeff Cornman, who was previously a senior vice president in authentication and identity management at Wells Fargo, joined late last year as the private bank and wealth advisory group's head of financial products.
SVB in late 2019 also hired a new managing director for wealth products, Matthew Schroeder, who was previously an executive director at JPMorgan in New York, according to LinkedIn.
The firm's ambitions around improving its tech extend beyond wealth. SVB said in its earnings report last week that higher-than-expected expenses, about which analysts pressed company executives, were partly a result of spending around "digital banking and scalability efforts."
Last month it brought on a new director of digital product, Alexander Wittkowski, who was previously Bank of America's head of mobile product and client experience.
Becker said on the firm's earnings call last week that it would release an "enhanced digital platform" during the second quarter to better clients' online experiences.
"We have an okay digital platform," he said. "We need to actually have a much better digital platform. So we're investing in that business heavily, and you'll expect us to see - or you should expect to see more investment in that."
Silicon Valley Bank last November lost four executives to a rival when JPMorgan hired them away for a new venture-capital-focused coverage group housed in its commercial bank, Business Insider previously reported.
