This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Social Media Moguls Transform Money Management

Stocks in this article: WFC GS JPM

NEW YORK ( TheStreet) -- While the investment banking arms of JPMorgan Chase (JPM - Get Report) and Goldman Sachs (GS - Get Report) are trying to scoop up stakes in technology companies like Twitter and Facebook , banks' wealth-management operations are trying to woo the newly rich social media entrepreneurs as clients.

"The wealth has shifted from inherited to entrepreneurial," explains John Dowd, regional managing director of Wells Fargo Wealth Management (WFC - Get Report), which manages $150 billion in assets. "When I started in the industry 25 years ago, at least 50 percent of the clients were inherited wealth. Now 50 percent of the clients are entrepreneurs and 25 percent inherited wealth," Dowd says.

"The old money client is in decline," adds Jeff Spears, CEO of Sanctuary Wealth Services LLC, a registered investment advisor with $1 billion in assets under management. He explains that growth in wealth management is being driven from new newly created millionaires located in San Francisco and entrepreneurs in Silicon Valley.

New clients also means a new way of doing business. Dowd says that the recession and the Bernard Madoff scandal has swayed views about wealth management, and getting entrepreneurs comfortable enough to open their wallets has pushed the the industry to be more transparent.

"Clients are now more inquisitive. They want to know what are the total fees I am paying? What is the performance of my portfolio versus benchmarks?," Dowd says.

Banks also need to take a different approach to reaching out to prospects that primarily use email, text messages and social networks to communicate.

"A lot of new clients are entrepreneurs who are embedded in technology, so you have to use technology like Twitter, Facebook and blogs to reach them, communicate with them and gain their credibility," Spears says. "These are people who are math savvy, so you have to prove to them why they need someone to manage their assets."

Once a manger actually wins some business the new clients are proving to be more conservative than the "old-money" clients they replaced. Unlike the dot-com generation that invested aggressively in stocks, most of the new entrepreneurs are going into, "very few investment vehicles," Dowd says.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs