By: S. Alison Chabonais

Private banking. It's the privilege of the top one percent of high-net-worth individuals and families in the United States. They enjoy the rarefied atmosphere of exclusive service providers who cater to those with a liquid net worth of one million dollars and more. They quietly persist in being treated as one-of-a-kind patrons. They entertain memberships in clubs secreted from the public eye.

Their financial club of choice is The Northern Trust Bank.

Northern Trust recently celebrated its 110th year in America and 20th anniversary in Southwest Florida as the premier private bank in the country. Being number one, though, doesn't suffice. Charting a course by an extraordinarily focused and effective marketing strategy steadily widens that lead. Florida is a crown jewel in the strategy.

The Northern Trust Company launched its operations in 1889 as a personal and corporate trust business. By 1928, the bank's landmark Chicago headquarters building became an architectural benchmark by which all future city structures would be measured. An apt analogy. For within a decade of making landfall in Florida in Miami in the early 1970s, The Northern Trust Corporation had identified itself as the financial benchmark by which all other private banks would be measured.

A profile of Club Clients

Northern Trust adeptly follows the flow of private money. A rise in the admission price for the right of passage into these marbled corridors, from a half million to a million dollars in just the past few years, attests to the rightness of its course. Its high-touch investment culture has become a magnet for wealthy people around the country.

There are currently 72 Northern Trust locations in 10 states. In Florida, there are a total of 26 branches, with four in Naples (1979 and 1990), one in Fort Myers (1993) and one in Bonita Springs (1995). Simpatico states include Arizona, California, Colorado, Illinois, Michigan, Ohio, Texas, Washington and Wisconsin.

Northern Trust makes port within a short cruise of 20 percent of the 3.5 million U.S. families it targets. Its goal is to reach 40 percent of that population. National chairman and CEO William Osborn confidently forecasts the bank will open five to seven new offices a year, most of them de novo operations. "We will have 100 offices by the year 2003," he says.

"Florida became important as we saw more Midwest snowbirds and retirees transferring their estates here," says Tuck Tyler, president, Northern Trust Bank of Southwest Florida.

Today, well-heeled Midwest clientele comprise 60 percent of local business, with the rest originated by clients hailing from Northeast states and foreign countries. Fortunes tend to be self-made rather than inherited. Retirees earn a handsome profit selling a business up north. Corporate executives ease up and establish second homes here. Successful entrepreneurs and professionals choose the Southwest Florida lifestyle. Bankers count among The Northern's biggest fans for personal banking needs.

"Our clients have made it big in all types of businesses," says Tom Bringardner, Jr., president of the Bonita Springs bank. "Their stories are fascinating. Listening to them makes our job incredibly interesting."

Wealth preservation is the compass governing The Northern's steady-as-you-go investment policy. Author Steve Salerno in Worth magazine equates their corporate ethic to "the banking analog of the Hippocratic oath: First, do not harm."

Northern Trust clients usually want to ensure the financial comfort of themselves, their spouses and future generations, but in ways that won't ruin children and grandchildren with a windfall of wealth. Ever practical, they wish to protect, preserve and distribute funds in the most tax advantageous ways. Charitable foundations invariably benefit.

Clients, including those who created their fortunes by taking risk, are drawn to The Northern Trust precisely because of its conservative nature. Teams of experts wrap themselves around a client and his or her needs, expertly and graciously conducting business in cozy surroundings according to "principles that endure." Popular private banking services revolve around portfolio management, brokerage, loans and estate planning.

In recent years, returns on Northern Trust-managed client performance portfolios have beat the Standard & Poor's 500, a feat achieved by a mere 30 percent of active money managers. Even bonds are running ahead. Among the bank's proprietary mutual funds, the Northern Technology Fund has proved higher-than-average returns.

But high-flying returns aren't what sets this bank apart. Rather, it's an extraordinary level of professional personalized service. That focus has floated a customer approval rating of 96 percent, far higher than the 70 percent or lower ratings afforded typical banks. "We sell service, not performance," says Richard Riley, Northern Trust president of trust new business in Fort Myers. "We take the long view on investments and daily focus on client relationships."

Between 40 and 60 percent of Northern's new business comes through expanding services to existing clients. Referrals run up a modicum of new business. Many clients investigate and come aboard after attending a Northern Trust-sponsored event at the behest of a friend. Nationally, this private bank has led the industry in hosting and underwriting charitable patron parties and educational seminars. Political and investment forums, computer training, travel club expeditions and celebrity appearances create interest and bond clients to the bank. "Creating and servicing relationships is ingrained in our culture," says Riley.

Consequently clients can, and do, ask for just about anything, and get it. "Staff get frustrated only when we can't deliver what the client asks. It's our nature to go above and beyond," avers Tucker.

At The Northern Trust Bank, rapid telephone access and personal e-mail satisfy clients' hunger for that essential personal touch. But there's far more. Northern Trust employees, from secretaries to presidents, have:

o Given blood for a client's hospitalized family member

o Arranged cell phone service and travel information for a client's vacation

o Secured and stored a cache of jewelry

o Hooked up VCRs

o Prepared in-bank dinners for client meetings with attorneys and accountants

o Followed clients around the country to meet their families and see to needs

o Baked and delivered homemade cookies

o Attended family weddings

o Collected clients' children from college

o Picked up dry cleaning

o Washed dogs

In the words of one woman with money in several banks, "I can't afford not to be a Northern Trust client. I want to be part of the Club." Banking at The Northern exceeds special treatment. The relationship carries social panache.

The Employment Philosophy

To meet demanding client desires, Northern Trust employees understandably work long hours. Yet, they say they're happy to be here. New hire Judy Bricker, public relations officer for Southwest Florida, says she's never before been part of a company where employees experience such a high level of regard. "Each of us is respected as much as a client," she says. "The team accommodates our idiosyncrasies and personal needs, so that we can accommodate our clients and keep smiling."

Twenty-one-year veteran Shelley Thompson, who has risen through the ranks to vice president of trust administration in Bonita Springs, likes having the unhindered authority and range of experience to care for a host of detailed client requests. "If they need expertise I don't have, I know who to call on with every confidence that our staff will satisfy the client," she says.

"People in banking aspire to working at The Northern Trust," Bringardner claims. "Many won't change jobs unless they can work here."

Many notable hires bring two degrees, complimenting financial skills with legal, accounting or other professional know-how. Desirable qualities include attractive attitude, intelligence, drive and a comfort level with people of wealth.

"Our relationship with clients has been likened to marriage," Bringardner continues. "Personnel changes are disruptive. We want people to stay." To that end, bank officers will keep a position open for months in order to locate and evaluate the right person for the organization.

According to employees, the appeal exceeds salaries, stock ownership and benefits. Progressive personnel policies such as employee family leave and flexible scheduling to accommodate family life receive high marks. Employees also delight in sharing many of the perks enjoyed by clients. Who else gets to participate in all of those entertaining and expansive special events?

Corporate Presence

While some national and regional conglomerate bank earnings are luffing in single-digit growth, Northern Trust is busily picking up credit worthy passengers disaffected by banking mega-mergers. "Whenever banks merge, it helps our business," says Thompson.

Northern Trust has adroitly niched itself to ride the current tide of business and demographic trends. The most propitious of these include:

o Cross-border finance

o Increasing affluence of baby boomers in prime earning years

o Explosive wealth-creation fueled by a seven-year bull market and technology craze

o Sale of independent companies liquefying capital to owners

o Sun Belt population growth

Wall Street returns on the modest-sized $30 billion Northern Trust Corporation have earned this bank an enviable reputation as "Old Reliable." Stair-stepped growth in corporate value has sparked several stock splits this past decade. In 1997 the bank qualified as an S&P stock listing.

Northern Trust shareholders' total return, including dividends, shot ahead more than 446 percent between January 1995 and March 1999, outstripping the bank stock index average of just under 270 percent during the same period. Recent annual returns on Northern Trust stock hovers near 20 percent. Corporations own the majority of Northern stock, employees invest in 20 percent, and the founding Smith family controls 15 percent. Smith scions personally oversaw operations for three generations before passing the baton in 1979 to succeeding CEOs.

"The Street knows we're not going to give them some crazy news that will skew the stock price," says Tucker. Price to book ratio has risen to 5-1/2, about twice that of most other banks worldwide. The Northern's anchored stance attributes in part to the fact that fully 70 percent of the bank's revenues derive from portfolio management fees, more than twice that of most other banks, which rely on net interest spreads.

Northern Trust adeptly follows changes in tacks taken by corporate and institutional money. While individual investment banking rings in at $82 billion and corporate and not-for-profit managed assets contribute another $181 billion, international corporate and institutional custody assets power along at $1.1 trillion, bringing the grand total value of assets under Northern Trust administration close to $1.4 trillion. The unusual combination of businesses uniquely positions the bank among its peers.

Basic corporate services range from traditional banking and commercial credit to trust and investment services to treasury management and supervision of corporate retirement plans.

According to Jim Seitz, senior vice president of marketing for Northern Trust of Southwest Florida, corporate business accounts for 10 to 15 percent of the bank's activity. Virtually all of it is tied to the personal assets of wealthy business owners.

Globally, Northern Trust is one of seven U.S. banks that control 85 percent of the worldwide custody business, meaning that they independently oversee and evaluate performance of money managers assigned responsibility for corporate benefit funds. Captains in the corporate custody business are few because of the steep technology costs. Northern's technology investment in 1999-2001, for example, tops $700 million, following on the heels of a $600 million investment in recent years.

Technology leadership on the private side of the banking business has propelled The Northern to institute a proprietary, individualized software program that allows a client to daily track his or her complete asset picture across institutions. It's called Private Passport.

Steering by its own lights, The Northern has fortuitously positioned itself to run with exceptionally rewarding opportunities. Named the last major independent bank based in the Windy City and the first major private bank serving Florida, The Northern Trust continues to invest in its own future as well as that of its clients. Career officers remain at the helm, planning for the long haul at Old Reliable.

S. Alison Chabonais is a freelance business writer and public relations consultant.