Magazine article American Banker

Legg Mason Is Preparing to Take on Bank Rivals

Magazine article American Banker

Legg Mason Is Preparing to Take on Bank Rivals

Article excerpt

Legg Mason Inc. is positioning itself to compete with banks in attracting and keeping high-net-worth clients who want one-stop shopping for financial services.

The Baltimore-based brokerdealer obtained a nationwide thrift charter earlier this year that will allow it to provide trust services. And it has been buying asset management companies that cater to the very wealthy, including Berkshire Asset Management Inc., a Wilkes Barre, Pa.-based company with $600 million of assets under management, acquired this week.

The deal is Legg Mason's third money management acquisition in as many years. In 1994 it bought Gray, Siefert & Co., a New York firm that served the wealthy, and in 1996 it bought Cincinnati-based Bartlett & Co., a similar firm.

Raymond A. Mason, Legg Mason's chairman and chief executive, said the firm may have to fashion itself more like a bank and keep the door open to further asset management acquisitions to achieve that goal.

"This is going to be a mammoth area over the next 10 years," he said, referring to financial services for high-net-worth individuals. "We are looking at the top 6% or 7% of the population, and banks believe that's where they make their money."

To attract customers, Legg Mason may have to offer more comprehensive bank services, he said.

"We can't let them offer a service our customers must have and we don't offer it. We may have to create a bank to do that, but we'll probably postpone it as long as long as we think we can. …

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