Banks Eat From Hands of the Filthy Rich

"Families that I know about aren't changing their asset allocation because we're in a slumping economy -- they're not letting short-term market movements disturb their long-term plans," he adds. "But lots of families are flailing all over the place, changing strategies, trying to decide where the market is going to go -- when it's gonna go up, when it's gonna go down -- and that type of client is really hard to deal with."

A look at first-quarter results of a few major banks provides some clues about what strategies are working best as the market regains its footing.

UBS outsources all of its private-client investments to managers outside the firm. However, the respected Swiss entity posted billions in losses from the market turmoil that began last fall. Its wealthy clients fled as they started to see weak returns and lost confidence in the bank's ability to weather the storm.

The bank faced net new-money outflows of 12.8 billion Swiss francs from its private-client business in the first quarter, compared with net inflows of 52.8 billion francs a year earlier. Its reputation was especially battered in its home country of Switzerland, which has a particularly competitive banking landscape.

"This takes time to recover, so it will clearly take a while," CEO Marcel Rohner said during a conference call. "It's hard to say, but the more quickly we return to more normalized levels of activity, and the more quickly we reduce our risk exposures and are back on track, the more quickly we will recover."