Banks Eat From Hands of the Filthy Rich

Even so, it will be tough for BofA and its commercial competitors to beat out so-called "single-family offices," or SFOs, to gain ultra-wealthy clients. SFOs provide one-stop shopping for not just investments, but an array of other "concierge" services, according to Raphael Amit, a professor at the University of Pennsylvania's Wharton School. Those services include hiring staff, guiding philanthropy efforts, overseeing education, encouraging family "unity" and managing homes, boats, planes and cars. Some even provide psychologists.

There are about 1,000 SFOs around the world, according to Amit's research. They service clients with at least $100 million in assets, though more than half are worth more than $1 billion. Each SFO costs about $3 million a year to operate, but families consider the outlays worthwhile because of the holistic approach.

While banks can be successful at managing money, they're not necessarily skilled at making hors d'oeuvres and organizing trust circles at family events. That means they must lure in new wealth with the right investment strategy and tailor service for each level of wealth.

West Egg Investor, East Egg Strategy

Wealth management falls into two categories, according to Richard Marston, another Wharton professor who specializes in the topic. The first "old trust-company" model has a few in-house portfolio managers who oversee investments in traditional stocks and bonds. The second "modern institutional" model farms out investing to well-known, aggressive managers at various firms. They tend toward cutting-edge investment vehicles, large-cap growth stocks in the U.S. and emerging stocks overseas.

Once upon a time, the old trust-company model worked fine -- high net-worth clients wanted to build and maintain their wealth at a reasonable pace and make sure it would last for generations to come. Newfangled investment strategies lacked style and grace.