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BMO tailors wealth services to seniors

Thomas Coyle

9 May 2005

And the example of Wells Fargo suggests it might be worth trying in the U.S.. As wealth managers jockey for position in the race to serve high-net-worth baby boomers, BMO Harris Private Banking is launching a suite of wealth services for the parents of Canadian boomers. BMO's new program, enCircle, is meant to alleviate the burden of financial management to seniors and their adult children alike. And though BMO has no plans to extend the service to U.S. seniors, the example of Wells Fargo suggests that they would do well to consider taking that step.

Nearly a third of all Canadian millionaires are over 70, says Jean Blacklock, the BMO personal trust v.p. who heads enCircle, “They all want to manage their quality of life as well as their wealth,” she adds. “EnCircle manages the parts of their financial affairs that the senior – or a close relative – wishes us to take on.”

North and south

BMO has established a board of experts in geriatrics and elder care to advise it on the needs of its senior clients. “Our council members are an incredibly experienced and educated group and we are pleased that they are as enthused about BMO's ideas as we are about their input,” says Blacklock. “We believe this will enable us to keep our clients well informed about home and health care resources in their community.”

Over half a million Canadians with children between the ages of 45 and 64 also care for aging parents, and 70% of Canadian baby boomers expect to care for an older family member in the near future, according to Statistics Canada. Of those who look after an older parent now, about 20% have had to change their work schedules, and 10% have lost income as a direct result of caring for an elderly parent.

The population of the U.S. is about 10 times that of Canada. There were 35 million Americans over 65 in 2000, according to the U.S. Department of Health and Human Services . By 2030, there will be 70 million, making up about 20% of the overall population.

Despite the aging of the population – to say nothing of simple observation that today’s boomer is tomorrow’s senior citizen – few big wealth managers have lined up with BMO to target high-net-worth seniors. That makes Wells Fargo a notable exception. Its eight-year-old Elder Services program has proved successful enough to warrant expansion out of its Minneapolis base to include outlets in Washington State, California, Texas, Illinois, Wisconsin and Michigan.

Wells’ Elder Services goes beyond asset management and estate planning to include a 24-hour hotline, health and in-home living-standard assessments and a range of concierge services. Services like that are usually reserved for ultra-wealthy clients who can call on family offices, private banks and boutique wealth managers to do their bidding. As far as Elder Services co-founder Sandra Anderson can tell, Wells has the mass-affluent market for trust and investment advisory services for clients aged 75 and over to itself. “We do have ultra-high-net-worth clients,” she says. “But many of them are in the $750,000 to $2 million range.”

Worth supporting

Though some observers wonder how a wealth program dedicated to seniors who aren’t firmly in the ultra-high-net-worth category can be made to pay, Anderson says Elder Services has been in the black for several years now. That, she says, is the product of careful management and “assembling the right people.”

Anderson founded the program with her colleague William Sanden when the two worked at Northwest Trust Bank in Minneapolis. They didn’t expect it to survive Northwest’s late-1990s merger with Wells, but the San Francisco-based bank surprised them by putting Elder Services in a business incubation program. “I think Wells realized that they had some niche businesses worth supporting, ” says Anderson. “It’s not like they threw money at us, but they did let us do the work.”

A lot of that work comes down to counseling clients to think twice, says Anderson. Like people of any age, some elderly clients will panic when confronted with a life-altering development – the death of a spouse, say, or the need to go into an assisted living facility – and start parceling their assets out willy-nilly. “You’ll see couples who simply give away the lake home or give away stock, only to have their children liable for costs that wouldn’t be such a concern if the assets had been put into trust vehicles.”

BMO Private Banking is part of Toronto, Ontario-based Bank of Montreal Financial Group. Its U.S. wealth management affiliates include Harris Private Bank and myCFO. –FWR

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