In the late 1960s, Enzo Ferrari committed to building an “entry-level” sports car that would appeal to a more mass-affluent buyer than his eponymous marque. His design team engineered a mid-engine two seater with a 2.4 liter, six cylinder motor called the Dino, named after his late son who was to be heir to the Ferrari dynasty. Although Ferrari manufactured the car and eventually badged a later version of it, the original design was never a “Ferrari Dino,” just a Dino. Buyers of the car did well on their entry-level investment – well preserved Dinos now routinely sell at auction for close to half a million dollars.
There are a few Dinos for sale right now in Scottsdale, where Brooks Hamner and I are attending Bank Director’s Acquire or Be Acquired conference. We spoke today on how banks can build value through trust and wealth management franchises. It just so happens that there are a number of annual collector car auctions going on here at the same time, and I could draw more than a few parallels between the events.
Much like Enzo Ferrari’s strategy fifty years ago, banks are looking to reach a mass-affluent investor community by offering sophisticated asset management services and personal attention once reserved for high net worth and institutional clients. Time will tell if this acquisition binge is as transformational for the banking community as the Dino was for Ferrari (today more than half the cars they sell follow the same mid-engine format). I’m sure acquiring bankers hope that investing in their trust and wealth management businesses will pay off as well as the purchase of a Dino did in the late 1960s – even if ownership may not be quite as much fun.
Here’s the slide-deck from our presentation. Even with the present market instability, banks have an interesting opportunity to expand their financial services while diversifying their revenue streams with asset management. We sense some growing demand for sophisticated trust services, and a lot of RIAs in the wealth management space see banks with existing trust departments as a complementary environment to sell into. Give us a call if you’d like to know more. I’ll be back with some conference hearsay next week.