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President of Bank of America’s Private Banking Division, Engages Fletcher Students in Lively Discussion. 
By: Phil Uhlmann, Ph.D. Candidate; Dorothy Chan, F’03

Alan Rappaport, President of Bank of America’s Private Banking Division, engaged Fletcher students in a lively discourse on the importance and trends of global private banking. Through an interactive session sponsored by the International Business Relations Program, Mr. Rappaport conveyed how private banking provides high net-worth clients with sophisticated advice in preserving, growing and passing on wealth from one generation to the next. According to Mr. Rappaport, clients with over $100 million in net worth use seventeen portfolio managers and advisors. On occasion, private bankers also assist in structuring trust units aimed at furthering their clients’ philanthropic interests.

Commenting on recent events, Mr. Rappaport believes that market volatility and the rapidly changing global environment will generate opportunities for his line of business. Now more than ever, clients demand tailored advice and private bankers need to create value for high net worth individuals. Unique investment products may be required to attract and retain clients. Retaining wealth within a family unit is not always an easy task. Getting clients to understand investment risks and recognize risk - reward strategies is hard work.

To illustrate his points, Mr. Rappaport developed a case study. He asked students how they would give investment advice to two families. First, consider a family of four with a net worth of $25 million whose breadwinners are 40 years old. Second, contemplate a family of four with a net worth of $25 million and whose head is 55 years old. He challenged students’ assumption that the mature family should opt for a less risky portfolio while the younger couple should be more aggressive. He demonstrated that investment strategies can not be devised by simply evaluating a client’s demographic information. To genuinely create value, one must truly understand the client’s needs. Listening is a critical skill when dealing with clients.

Having shed some insight into the responsibilities of a financial advisor, Mr. Rappaport engaged students in an interactive dialogue on the family issues, particularly the challenge of sharing financial information with children. Generational issues have become more important in wealth management given the fortunes created in the high tech sector of the economy. How much should children be told about the family’s financial affairs and when is the appropriate time for this discussion? Once again, the answers to these questions are not straightforward. Each family is different. Mr. Rappaport used this topic to illustrate that there are also non-monetary issues that private bankers must deal with. A holistic and diplomatic approach must be taken with all clients.

Mr. Rappaport joined Bank of America in April 2001. He was drawn to Bank of America because of its tremendous franchise and the challenge of building an industry leader in wealth management. Mr. Rappaport is well known on Wall Street where he has worked creatively in establishing major funds in India, Israel and other emerging markets. He is recognized as an expert on wealth management and building fee-based businesses. Prior to joining Bank of America, Mr. Rappaport was Managing Director of Chase Investment Advisors and a member of the management committee of Chase Global Private Bank. Before Chase, Mr. Rappaport spent 17 years with Oppenheimer, where he was a senior executive and Director of the Asset Management Division.