Title: CEO Corner: David Lamere of BNY Mellon

" Welcome to CBO corner every week we go one on one what do England's top CEOs to learn the secrets to their success. This quickly have David Lanier who is the CEO of Bank of New York Mellon. Wealth management welcome thank you I want to begin the program on a big piece of good news. Over the weekend -- weekend Wall Street Journal had this huge headline that the -- recapture 9000. On profit surprise so. Just putting this in perspective during the past five months we've seen one of the biggest short term. Run ups in the market since 1974. Basically. Five months up 338 and a half percent but on the other hand we are still down 36%. From. The 2070. So this is all about profits your perspective on."

" Yeah it's good news but you have to put in perspective because we're coming out for a period of such bad news. And so much discontent with earnings -- with -- it with profits -- the economy overall that. Even though the last few months in the -- last few weeks specifically have been good earnings have surprise on the up side. But our expectations were very low and so even though that there are better than expected they're still not great."

" I noted and a indebtedness article was one forecast that even if the other major companies basically make their customers -- Get above it that they are still as a group going to be 25%. Below last year's profit so bad that really -- genetic."

" Into perspective. What's going it's certainly better -- that we're a better spot today than we were six months ago nine months ago but you know we got places places to go yet."

" We sure -- I want to ask you about the wealth management industry itself and its performance the Financial Times did a -- in July basically saying. That this last -- again. There were losses across the industry and it was the fifth quarter in a row of losses. Averaging this past quarter one point 2% to five point 9%. So your perspective industrywide. What's going on how serious are those losses and then from your own business perspective."

" Right well there's no question the wealth management businesses just a segment of the overall and adjustable universal were not men and added that as well. On the other hand I think the wealth management business -- properly constructed in managed for the long term actually has little bit better a little bit more patients a little bit less need for liquidity. I you don't have to sell lot of some things if you have the opportunity to hold in their little bit so. Group results are very mixed the it's very hard to put them all together and say here's the average because every situation little bit different. But they're not immune to the negative results of that that the overall market has -- I think more recently. Results of accidental that daughter so -- in our business we actually we certainly were down last year I don't think that there -- but it wasn't down but we were down you know probably about half of what the the averages war. And that's largely because we were pretty well diversified and we were we had managed the risk that we saw in the markets into our client portfolio so. I'm not suggest that we weren't down it wasn't painful process it was. But some of those losses were muted in our clients portfolio."

" Want to ask you about the Bernie Madoff the fact that New York Times did a piece on this and basically the headline is how to -- no you're not Bernie Madoff. Talking about wealth managers. Embedded in this was the CEO Wilmington trust saying it didn't it. His four decades in the business he has never seen such a crisis of confidence. Your perspective what he's seeing what are you hearing."

" if there's some simple advice know what you're invested in you know people have taken for granted that big returns and opportunities we're just gonna come to them and I think that back to basics has made a real. Resurgence here. Most important advice to people know what you're invested in -- know that that company bigger deal would knowing what they're doing so. I think it's less -- apt to happen in the future but that's little consolation for people who have been burned by that or or any of the other scams. Integrity is a huge issue right now called -- reputation as it is absolutely."

" What -- step back from a picture of our viewers a little bit of corporate. Overview on the Bank of New York Mellon wealth management is headquartered. In Boston it's focused it is a top ten US wealth manager. Private client assets were looking -- 132 billion but just within the last several days and if -- came out of 440 billion. Services investment management wealth and estate planning private banking global custody and information management the number of employees is when he 500. -- your business data is so intensely competitive you have city and it. Merrill Lynch gold then Bank of America etc. you name it what's your differentiator yet."

" Wolf for one right now we're growing that's differentiator and I think it really we -- we haven't changed their strategy in a while. We have we're an asset management firm more wealth management firm were not principally focused on gathering assets. So consequently we've tended to take the long view of their clients with tended to be. Very up front with -- how we -- how we charge them what kind of investments we're making for them. And as a result of that I think we've earned their trust who is your typical client another way of putting it would be who is. A wealthy client right common definition is somebody that has at least a million dollars to invest. Our client basis probably into two different groups one that would be in that that family that what might have you know two to ten to twenty million dollars. Who attended to a lot of things for them. And then there's another whole group this commonly called the family office which is about a hundred million dollars or more and these are families. Or groups of families who put together almost a little company to serve their needs and we would be one of their main providers what are they."

" Demanding I noted in a Wall Street Journal article that among wealthy clients 50% of their assets are in cash or cash equivalent or fixed income products. The the they. Building says the real estate grounds that."

" What fake at the end of the year everybody was scared and everybody was looking not for what yielding could have infect everybody you know there are a lot of people invest in treasuries and basically get -- less money than they have rights of give me a sense for the risk profile I would sale the last three months people have -- to return to the markets. Understanding what risk they're taking what we're there taking up but I think people are starting to move a little -- recognizing that just cash or just fixed income is not typically --"

" I noted that your big player in Jumbo mortgages and wondered what you're seeing what sort of activity are you seeing in the Greater Boston area. Also just heard on the news that a new home sales across the country."

" Shot up 11%. Right and in -- so what --"

" Good news the first piece of good news in the housing market for quite awhile and I don't think it's the definitive story in the housing market there's so -- room to go but on the -- side we've remained active lending to our clients throughout this whole period. Again our clients aren't a slightly different position they tend to be continuing to buy or potentially refinancing their homes or their second homes. And we have been active with them on that you're one of the advances we have as a lender is we hold loans that we make. So we're only gonna make loans that we think are good and we're gonna hold on answer them."

" It Tristan I wanna step back from an insurance our viewers a little bit of personal backgrounds on tape himself very distinguished background educated about to college. Experience. Vice chairman Mellon Financial. And president's own private wealth management group and of course today he is the SED. Thank -- York Mellon wealth management and you've also. He's vice chairman of the company. I'm I want to talk again about the intense competition. That you're seeing in your industry so many players. And on top of that again The Wall Street Journal reporting that in 2008. Wealthy clients basically pulled out or dropped out. -- management firms at a clip of 25%. The top fifteen wealth managers are assets are down 25%. Industrywide. What's going on and then what are you seeing your own business as you say -- growing yeah I think."

" You know the short answers people don't trust their provider and I think that's the short answer they're disappointed by investment results for sure. There aren't too many people who have been immune to that as Larry talked about but I think the short answer is people don't trust their provider and that's why they're leaving. In our own business we've been very fortunate our retention rate is still way above 95%. We've continued. To hold onto our clients we've we've really stepped up communication you know any time you're under stress communication is key. We've had both the you know. Webcasts. Telephone calls personal visits any former communication we can possibly get just under it help clients understand what we're doing for them. Why we're doing a forum why their assets are safe satirist that are so communications been crucial."

" This is really dramatic. Time in your industry. Lehman is gone Bear Stearns is gone. I'm just curious what -- expecting going forward merger acquisition consolidation."

" In our business I like to say there's two things on one this consolidation. You just alluded to a one revenue growth is slow people -- to -- each other consolidate its and that's gonna happen it's already startled little identical happened more. But then also fragmentation. People who deal with -- clients and bigger firms there's our breaking land starting up their own little firms I think you're gonna see. Both things going on fragmentation at the very small and and consolidation of the high end. Interesting times you're gonna take our first break we'll be back with more CEO quarter. It just a moment."