Not-so-big banks are looking to cash in on the financial planning needs of the not-so-wealthy, hoping that, with enough pampering, this burgeoning market sector will bear lucrative fruit.

This swelling market segment encompasses the so-called mass affluent. They may not be classified as truly high net worth, but they have enough assets to need some advice and direction on how to manage their money.

In Boston and elsewhere, the financial institutions looking to capture their business are not on the same level as a Fidelity or a Merrill Lynch, but smaller banks that believe they have a competitive edge because of their unique relationship with consumers.

“For the average person, it’s not about wealth management, it’s about financial planning,” said TowerGroup’s Jim Eckenrode, group research director of consumer banking at the Needham-based financial services, technology and consulting firm.

“Banks are in a good position to take advantage of the fact that, in the mass market, lending is as important, if not more important, than the investment and deposit side,” Eckenrode said. “High net-worth individuals don’t worry about mortgages and credit cards. For us, it’s more, ‘should I refinance to pay off my credit cards?’ rather than, ‘should I donate $10,000 to each child and set up individual trusts?'”

The term “mass affluent” is merely a disguised phrase for the upper portion of the mass market; the attempt to woo that market is simply financial planning for the masses, said Eckenrode, who recently spoke on the topic at a TowerGroup conference. But delivering that service to the masses represents a challenge to the banking industry, Eckenrode warned.

Competition is heating up, he said, as banks find themselves competing against powerhouses like Merrill Lynch or Morgan Stanley who have traditionally owned the marketplace.

Eckenrode pointed out that, in 1990, about one-quarter of U.S. households had their assets in traditional checking accounts, but by 2000, that number had dipped to approximately 14 percent. In 1990, about 15 percent of households were using brokerage accounts, while by the year 2000, the amount doubled to around 30 percent.

With the boom market, even the most timid individuals opened a brokerage account to cash in on 10 to 15 percent annual returns, Eckenrode said. For many people during the heyday of the boom, that passed for financial planning.

“Now, there’s been a little bit of retrenchment. People are going back into banking accounts; obviously our lives are a lot more complex financially than they used to be,” Eckenrode said. “The average financial profile of a household in 1960 and 1970 vs. today is like night and day. People need to talk to experts to understand what they’re supposed to do now.”

And though, according to TowerGroup statistics, the entire U.S. population is becoming more tech-savvy as well as more affluent, most still prefer a real person when it comes to putting their money where their knowledge is.

“In many cases, online tools raise more questions than they answer,” said Eckenrode. “They are getting more sophisticated, but people want to talk to a person face to face.”

For many people, banks are still their primary financial institution, based on the number of “touches” they have with a particular institution. Each time customers walk into the bank branch or use the ATM solidifies the relationship. Banks have a broad array of delivery channels at their disposal, with products and services covering the deposit and lending side as well as the everyday needs of the consumer.

But most people don’t tend to think of banks for financial planning. According to Eckenrode, recent TowerGroup research revealed that about 9 percent of consumers use a bank for financial planning, and 27 percent use a full-service brokerage firm. Among high net-worth individuals, the numbers get much worse. Only 3 percent use a bank and 45 percent use a full-service brokerage.

“The perception is that banks are not as sophisticated [as brokerage firms],” Eckenrode said.

And as the wealth management trend continues to evolve, there may be a grain of truth to that statement. Today’s customers are looking for more advice, more choice in financial products and, especially, more service. Banks looking to tap this market don’t yet have the staff resources of Fidelity or Merrill Lynch.

“Often the branch staff is not aligned with high technology and financial management – there’s a disconnect there,” Eckenrode said.

So banks can either bring in more sophisticated people or tailor their products and staff level to meet the needs of the mass market, observed Eckenrode.

“Banks need to remember what makes them different,” he advised.

‘Holistic Solution’

To that end, stable relationships can be key. Eastern Bank’s private banking group implemented a Boston presence two years ago to take advantage of client dissatisfaction with larger banks and other organizations with mergers.

“We’ve had clients who were on their second, third and fourth account officer,” said Joseph E. Finn, senior vice president of the private banking group at Eastern Bank.

“A lot of our clients were just not being as well served elsewhere, due to a number of mergers. We’re well positioned to take advantage of this, as this market continues to grow significantly,” Finn said. “We feel our key differentiator for clients in this market is objective advice and performance … and our people are experienced and well trained.”

Owners of closely held businesses and retirees represent some of the bigger opportunities in the marketplace, Finn said. The bank serves individuals and families with $500,000 to $5 million in assets. Over time, those parameters will increase to the $1 million to $10 million range, Finn said.

Eastern Bank is employing a number of strategies integrating technology with people power.

“With the Internet, information on markets, different stocks, securities is readily available – it’s really what you want to do with it. That’s where the experience of our people comes into play,” said Finn.

At Boston Private Bank and Trust Co., the strategy is a combination of “high touch with high tech,” according to Mark D. Thompson, president.

“Our approach is a commitment to providing exceptional customer service – empowering our private bankers and clients and service officers with decision-making authority, and supporting that with technology so can spend more quality time with the customer,” said Thompson.

In the end, banks need to evolve with technology and the needs of the market in order to succeed in the new wealth management endeavor.

“[Banks] need to understand their company’s direction, their company’s strategy, how they’re organized and what their skill set is. At the end of the day, technology will not solve this problem for you; the tail can’t wag the dog,” said Eckenrode. “Banks need to incorporate debt, deposit and investment into a holistic solution that’s simplified and makes sense.”