Following the Money

Remember the old joke about the bank robber? When asked by police, "Why did you rob the bank?" he answered, "Because that's where they keep the money."

Though no similarity is implied between bank robbers and bankers, ask directors of several high-end investment houses in Naples why they chose to locate here, and the answer is likely to be some version of: "Because that's where they keep the money."

Naples has long been a winter retreat, full-time residence or quick tropical getaway for the wealthy. Granted, not everyone in Naples is a millionaire, but the nearly $42,000 in per capita income ranks Collier County just shy of the top 10 wealthiest communities in the country,

officials say.

According to the Economic Development Council of Collier County, one indicator of Naples' wealth is that more than 55 percent of individuals here make their money from "unearned sources." That's not to say these individuals didn't work hard for their money, but a vast number are now enjoying the fruits of their labor. They're earning money from investments, rent and other business interests, according to the EDC.

Southern expansion

Along with the many millionaires (and a few billionaires) come the trappings of wealth that have enhanced Naples' reputation as a playground for the ultra-rich: luxury shopping, upscale dining, expensive European automobiles, exclusive golf clubs and, of course, all those mansions.

As Naples' reputation as a well-heeled paradise grew, so did the number of private banks and investment firms catering to the specialized financial needs of wealthy individuals. Each firm prides itself on a high level of customer service-often referred to as "high touch" in the industry-providing secure high-yield investment tools and personalized service that ensures clients' needs are met and then some-all with the level of discretion and professionalism they expect.

In the same way that Naples' wealthiest don't hop from cocktail party to cocktail party boasting about their wealth, their bankers don't discuss their clients' portfolios in more than the most general terms. Jeff Erickson, investment principal for Lowry Hill, a Minneapolis-based private wealth management firm that opened a Naples office in 2000, describes the firm's typical client as "higher end," with a minimum investment of $10 million dollars.

While Lowry Hill's clients may be on the high end of the scale when compared with other Naples investment houses' minimum entry level, the figure does illustrate the amount of wealth in Naples-and that there's enough of it to go around. The firm "followed our clients down" from Minneapolis and the upper Midwest, Erickson says. "We had existing clients in Naples, so we already had good name recognition."

That same Midwestern migration brought Northern Trust from Chicago, and Huntington National Bank from Columbus, Ohio, as well as a handful of venerated private investment firms from the Northeast, including Muriel Seibert & Co. and U.S. Trust (both from New York), Merrill Lynch (Delaware), Smith Barney (Philadelphia) and others, including Fleet Financial Services from Boston. Fleet was recently acquired by Bank of America, which also has a prominent location on Fifth Avenue. A recent addition, RBC Dain Rauscher, a subsidiary of the Royal Bank of Canada, acquired William R. Huff Co., which had been in Naples since 1998.

In all, according to the EDC, Collier County boasts at least 31 separate banking institutions, with more than 115 branches. As of 2002 (the most recent statistic year available), Collier banks reported $5.8 billion in deposits, a staggering 70 percent increase from 1999 to 2002. And even with a de-accelerated stock market and a sluggish economy, those deposits are expected to grow. With that growth will come more banks. "There's a good deal of competition throughout Naples," says Scott Alexander, managing executive of Northern Trust's Fifth Avenue office, which opened in 1979. "The pie is continuing to grow."

Bob Belcastro, vice president and branch director for RBC Dain Rauscher, characterizes the industry's perception of Naples. "Naples is a unique market to which a lot of retired CEOs and upper management vacation for the winter, then decide to retire," he says. Good tax laws and even better weather are a big draw. "And since Naples has quite a bit of money, it's a natural place for them," he says. "Now they can access the same type of financial services they were used to up North. This makes Naples quite attractive."

After opening a successful office in Boca Raton, Muriel "Mickie" Siebert, founder of the discount brokerage firm bearing her name, set her sights on Naples. "We needed an office on the west coast," says Siebert. "Our experience was that if we don't have an office where our clients are, they go somewhere else. They may never come into the office, but they want to be able to know that if they have problems, they can sit down and talk to someone."

Putting Fifth first

Fifth Avenue South is considered the heart of Naples for many reasons. It's older than the Tamiami Trail, and it serves as a conduit between the busy trail and the world-famous beach to the west. And frankly, it's close to where a lot of wealthy people live. For these historic, symbolic and geographic reasons, it's no wonder many of Naples' most prestigious investment houses chose to establish a foothold on Fifth Avenue before branching out.

"Fifth Avenue is the essence of Naples," says Erickson. "It has beautiful architecture, it's well maintained and well groomed, and clients enjoy coming to Fifth for shopping and restaurants. It's all high end, and that is how we want Lowry Hill to be represented."

Alexander says the well-known avenue has always been a key location. Northern Trust specializes in trust and investment services for clients with at least $1 million in assets for investment. It offers commercial banking services to its investment clients, but does not actively solicit commercial banking clients.

Although Northern Trust has a prominent building on U.S. 41 at Park Shore, "people identify us with Fifth Avenue," Alexander says. When the Park Shore office first opened, the company thought of vacating its Fifth Avenue location and consolidating to one office, but decided against it. "So many of our clients are in Port Royal, Aqualane Shores and Old Naples," explains Alexander. "We wouldn't have been as convenient to our clients."

Northern Trust employees have witnessed what Alexander refers to as "the Renaissance of Fifth Avenue," and watched Naples become the Naples it is today, with more full-time residents, greater wealth and more affluent services to keep the rich here year-round.

Merrill Lynch bankers have also witnessed that transformation. The investment house first opened on Fifth Avenue in the late 1980s, "before the boom," says Michael Lynch, managing director of the Naples office. Merrill Lynch now has two locations on Fifth, from which they target clients with $1 million in investable assets, though Lynch says the company's client base ranges from individuals with "anywhere from $250,000 to $20 million to invest with us." Services include investments, lending and cash management.

Lynch and his associates appreciate their Fifth Avenue location-both for their clients and for special services the firm might offer. "During season, our location makes it easier for clients to make appointments and meet with financial advisors," he says. "If we're doing a function for clients, it's easier to do that downtown-like a wine tasting at Bacchus, or a small dinner at Zoë's or some other restaurant. Being downtown definitely has its advantages."

Northward migration

Though the moneyed denizens of Naples may no longer cluster exclusively around Fifth Avenue, the banking industry does tend to see the avenue as "Wall Street South." That doesn't mean there's not a whole island of Manhattan to conquer. As Naples' wealth has spread northward, so have the banks. The Pelican Bay/Seagate area now has a cluster of banks and investment firms, as do Park Shore and Bonita Springs, in the area surrounding the affluent Bonita Bay and West Bay Club communities. Fort Myers, too, has attracted the higher-end houses, such as Investors' Security Trust Company.

Lynch notes that although a spot along Fifth Avenue is desirable, it's not essential. "As Naples has expanded,

so has our client base," he says. "Originally, the concentration would have been in [Old Naples]. But we now have a location in Pelican Bay and another in Bonita Springs. As the population has increased, we've gone where they are."

Others echo that sentiment. "Business isn't going to suffer in a different location," says Lowry Hill's Erickson. "The wealth has spread. Port Royal is still a core area, but it's gone east and north as well; it's not as concentrated as it once was."

He adds that private bankers are used to visiting clients in their homes or offices, so location isn't the only factor. "I personally have clients in Sarasota, Orlando, Palm Beach and San Francisco," says Erickson. "The business model is such that location isn't all that critical."

Service seems to trump location when it comes to retaining clients and attracting new ones. "Our best sources for new business are our current clients who refer lots of business to us," says Alexander. Regardless of location, he adds, "If you do a good job, people recognize you."