Bank of America Corp. and Wells Fargo & Co. came out on top in a new study about which banks high-net-worth individuals prefer. Some 32% of individuals who are worth between $5 million and $25 million prefer to bank with these two banks, according to an annual study by Millionaire Corner, a division of Spectrem Group, which looks at how investors work with financial advisers.
Both Bank of America and Wells Fargo tied for first place with 16%. J.P. Morgan Chase & Co. came in third with 11%, while only 4% preferred Citigroup Inc. Other financial firms with 2% or less include PNC, Suntrust, US Bank, USAA and Charles Schwab.
After the financial crisis, stability became a big issue with customers and therefore, they tended to stay with the bigger brand-name banks, said Cathy McBreen, president of Millionaire Corner.
Each of these banks excels with different groups. Wells Fargo tends to attract younger people, depending on where in the country they are located. Bank of America is all over the U.S. and J.P. Morgan is primarily in the Northeast, which also impacts the number of investors they attract. Breaking down investors by age, 24% of those under age 48 prefer Wells Fargo and 18% over age 64 prefer Bank of America. J.P. Morgan and PNC Bank attracted 15% of investors aged between 48 and 54.
These numbers vary from the 2013 report. Wells Fargo dropped from 20% of overall funds from high-net-worth individuals and Bank of America rose to 16% from 14%. J.P. Morgan also lost market share in this group, moving from 13% in 2013 to 11% in 2014.
The biggest complaint about large banks from Spectrem’s focus group is not enough personalized customer service. According to the study, 42% of bank customers bank with lesser known financial institutions. According to MrBreen, bigger banks are challenged by local banks because “they (bigger banks) have become less personal.”
One of the reasons customers stay with larger banks is their technology, said McBreen. “We see a lot of customers liking the mobile technology that the bigger banks provide that the smaller ones don’t,” said McBreen. “And it’s harder for the smaller banks to compete with that.”