The new austerity

Opposite William Safire’s On Language column in today’s New York Times Magazine, Bessemer Trust has a full-page ad. Normally I wouldn’t take a second glance at these kinds of tasteful, “wealth management” promotions. But the copywriters for Bessemer want to show these aren’t typical Wall Street types. 

Rarely in history have so many been so violated by so few. We understand. We’re as angry as you are, because the actions of those few have cast a pall of doubt and suspicion over everyone even remotely related to the financial industry… 

Our headquarters are on Fifth Avenue in New York, four miles from Wall Street. But our approach is a million miles away from what Wall Street has become known for. 

All sounds pretty good, and in tune with the times. The kicker for me is the small print at the bottom of the ad: “Minimum relationship $10 million.” Well, that’s truly in harmony with today’s austerity. 

The Sunday Times has a circulation of just under 1.5 million. What percentage of that circulation has $10 million in investable assets? It must be vanishingly small. And is there really anyone with $10 million or more to invest that is going to take their cues from an ad in a magazine?

4 thoughts on “The new austerity

  1. Jon Jacobs

    This is an astonishingly naive post, for a supposedly highbrow blog.

    How does accumulating $10 million in investable assets deviate in any way from “today’s austerity”?

    Remember: investable wealth by definition means savings – earnings that were not spent. $10 million is a typical minimum for the sector of wealth management that’s known as “private client banking.” Bessemer Trust is one of the better-known and established service providers in that niche. (Some firms set their minimum still higher, by the way.)

    So, what is not austere about saving and investing? It’s what all our parents and grandparents (and for the younger among us, our great-grandparents) did during and after the last Depression, albeit on a smaller scale in most cases.

    The assumption that the number of New York Times readers with $10 million to invest is “vanishingly small” is laughably naive, as well. I presume Mr. Knobel resides in Indiana, perhaps, or Alabama…somewhere far from New York City, where the median apartment still sells for upwards of $1 million and the minimum income needed to maintain a middle-class standard of living is $123,000 (according to a recent analysis by a widely respected organization, I don’t recall which one offhand).

    My guess is the percentage of NY Times readers who could meet Bessemer’s minimum is on the order of 1%. Small, yes, but hardly “vanishingly small” – that’s 15,000 people.

    It’s true that such people don’t pick up the phone to assign their millions to someone they learned about through a magazine ad.

    I guess the oh-so-educated and sophisticated Mr. Knobel is a newbie not only when it comes to the concept of private banking, but also to the concept of corporate image advertising.

    1. Lance Knobel

      Naive, perhaps. Highbrow? I don’t make any particular claims. I don’t live in Indiana or Alabama, but so what if I did? Sheesh.

      I think I know more than the average reader about wealth management and private banking. I’ve written about the Swiss private banks on a number of occasions, and I’m certainly well aware of the ideas of corporate image advertising.

      What struck me about the Bessemer ad was the use of a direct response mechanism, which isn’t usually part of corporate image advertising. And I do think there’s something striking about trawling for readers with at least $10 million to invest in today’s climate.

      I’m not sure how you make your guess on 1% of NYT readers having $10 million to invest. 15,000 would mean a significant majority of people with that kind of wealth in the US read the NYT. I’m skeptical. Having a multi-million apartment and an income of far more than $123k would still get you nowhere near $10 million in assets to invest. There are plenty of New Yorkers and NYT readers with multiple millions in assets, but most are tied up in housing.

  2. Frank L

    My first guess is that this was a “feel good” ad aimed at their existing clients more than at new clients — “see how great we, are we have a full page ad in the NYT (and by the way, please don’t leave us)”.

    My second guess is that the first commentor works at Bessemer.

    1. Lance Knobel

      Frank L: I suspect you’re right on the first point. On the second, perhaps, or has Bessemer as a client. Certainly something struck a chord to provoke that response.


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