Banks Benefit from Newly Wealthy in Silicone Valley

Silicone Valley has seen more newly created millionaires and billionaires thanks to the latest internet boom, but many of these newly wealthy individuals are lost when it comes to estate planning. Banks typically charge a 1% fee for keeping track of a client’s portfolio, and this cut can get quite high when the portfolio contains millions or billions of dollars worth of assets.

Banks across the nation are scrambling to woo large multibillion dollar companies and wealthy individuals into entrusting the bank with their fortunes.  All this wealth may also lead to increased jobs. Goldman eliminated close to 1,000 jobs worldwide, but it now plans to increase staff in San Francisco by 30%. Since 2008, UBS has more than doubled its staff, and JPMorgan recently opened a 10,000 square foot office in Palo Alto, California.

See Evelyn M. Rusli and Ben Protess, In Silicon Valley, the Ripe Scent of New Money, Jan. 15, 2012.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.