U.S. Trust, a wholly owned subsidiary of The Charles Schwab Corp., has acquired State Street’s private asset management division for $365 million in cash. The deal gives U.S. Trust a foothold in wealthy New England, particularly Boston, which is the fourth largest wealth market in the nation.
The deal, which is still subject to regulatory approval, is expected to close in the fourth quarter. State Street’s Private Asset Management business provides investment management advice, trust, estate planning, and financial advisory services to clients with $2 million or more in investable assets. U.S. Trust now manages $80 billion in assets; the deal will give it another $11.5 billion in assets.
Chip Roame, managing principal of Tiburon Strategic Advisors in Tiburon, California, says the move is a good one “for Schwab, its customers, and shareholders.” Schwab’s clientele is largely made up of Baby Boomers, he says, “and as these folks age, they are saving more money, liquifying their money, and inheriting new money, so Schwab is recognizing the need to offer more advice-oriented products and services to satisfy their existing customer base.”