Silicon Valley Bank hired 14 wealth managers in 2021 and hopes to repeat that number or double it this year.
With executives trumpeting big growth potential from its purchase of Boston Private Bank, Silicon Valley Bank is starting to spool up the combined entities’ wealth management business.
While executives expect wealth management opportunities to take time to develop, the bank has hired more than a dozen wealth advisers since acquiring Boston Private and expects to add more staff with experience in the innovation economy.
“What we’re working on and trying to accomplish at Silicon Valley Bank and the Boston Private wealth business combined is we’re bringing together two really extraordinary organizations with strong, strong histories of working with clients at all different levels,” said Rich Jaffé, head of wealth advisory at SVB Private Bank. “Now, our mission is to find a way to hire more advisers to add to our very, very talented team as we talk to these clients, and help them with their personal wealth.”
Many New Hires
When the $900 million deal to acquire Boston Private was announced in January 2021, SVB pointed to Boston Private’s wealth management strategy and technology investments as key reasons for combining the companies. SVB’s CEO Greg Becker said last year that growth, not cost savings, drove the merger.
The merger was completed on July 1, and Boston Private’s wealth division changed its name to SVB Private Bank last month.
Industry analysts continue to have a positive outlook for the bank’s parent company, SVB Financial group. In a research report last month, Keefe, Bruyette & Woods said SVB has “one of the most differentiated franchises across the financial sector.” While noting that the company could faces several risks, including some tied to the success of its integration with Boston Private, KBW expects the company’s stock to outperform in the market.
Wedbush Securities, which also expects the company to outperform, said in a research report that the above-average growth expected from the company would come in part from the strategic benefits of acquiring Boston Private, along with new hires within the company.
The bank’s successful clients are also helping its bottom line.
“The company’s tech and life sciences clients sit in a sweet spot and have thrived throughout the pandemic as work-from-home bolstered demand for technology services and the success of COVID vaccines galvanized the life sciences industry across the board,” the Wedbush report said.
The wealth this success has generated offers opportunities for the private bank, said Jaffé, who came from Boston Private. The people behind those firms – executives, founders and investors – need help with financial planning and strategy at every stage of their company, from start-up to going public.
When the Boston Private-SVB merger was announced last January, SVB said the combined entity was expected to have $17.7 billion in assets under management. According to its fourth-quarter earnings presentation, it had grown to $19.6 billion at the end of last year and was targeting between $22 billion and $23 billion by the end of this year.
During the bank’s fourth quarter earnings call last month, SVB CEO Greg Becker said the company had hired 14 wealth advisers in 2021, mostly in the final months of the year. He added that the bank could hire between 14 and 25 more advisers for the wealth management team this year.
“When you’re looking at the private bank and wealth, typically it takes a while to build that relationship, to reconnect with them, to convince them that you have the full product set for them that’s capable, and that’s even for wealth advisers that are coming over because, again, we’re looking specifically at the innovation economy,” Becker said during the call. “So, it’s going to take a little bit of time.”
Innovators’ Unique Needs
With its health care and technology industries, Greater Boston is one of SVB’s focus areas for recruiting wealth management customers.
The company expects to hire in Greater Boston and the other regions where Boston Private and SVB operate, including New York, Miami, Palm Beach Gardens, Los Angeles and San Francisco, Jaffé said. He added that experience working in the innovation industry would be more important than the adviser’s location.
Diane McLaughlin
While more space could be needed to accommodate staff, Jaffé does not expect the company to open multiple wealth management offices, particularly since staff work remotely for part of the time.
Jaffé noted that while wealth management has always been a competitive business, technology has leveled the playing field and significantly increased the competition. He said that SVB’s focus on the innovation ecosystem sets it apart from other wealth management providers.
“I think that is a differentiator for people looking for a wealth management team that truly understands them, understands what’s happening in the innovation economy,” Jaffé said, “what it’s like to have private wealth versus public wealth, illiquid wealth versus liquid wealth – those are areas that we are as a team very familiar with because we’ve lived in that world for so long.”
