Dr. Jim Hall is a radiologist, not an economist. "The world of finance is rather foreign to me," he says. That’s why he lets Mark Strosnider at One Valley Bancorp’s Lynchburg office help him take care of his money. From the big stuff, like Hall’s mortgage, to the little details, like setting up an IRA for his 19-year-old daughter, Strosnider helps Hall with all of his financial moves.

Why would Strosnider, a private banking manager for Charleston, W.Va.-based One Valley, do so much for Hall? Hall is in a profession that brought him enough money to start planning his 19-year-old’s retirement. That puts him in a category bankers call the "20-80" clients: The 20 percent of customers who generate 80 percent of profits.

To the chagrin of consumer advocates, banks bring their best — and often cheapest — services to the 20-80 clients. Bankers respond that keeping customers like Hall isn’t only a matter of keeping profits high. It’s a matter of staying competitive in a crowded financial-services marketplace — and they’re doing more to get and keep those customers.

Banks have always treated their high net worth clients well, giving them faster, friendlier service. In the early 1980s, deregulation took limits off interest rates, giving banks a new way to compete for those customers’ business. That competition continues today. At First Union, for example, customers using the bank’s flagship checking accounts get higher interest rates for higher balances. If they keep $2,500 or more, they get 1.24 percent interest. Depositors with more than $15,000 in their accounts receive 2.71 percent interest. At many banks such clients receive favorable rates and waived fees on other financial products.

Banks continued to chase wealthy clients in the 1990s, when lawmakers allowed them to offer an increasing number of services: stock management, financial advice and insurance. "Deregulation brought in a mentality of going after profitable customers," says George E. Morgan, a finance professor at Virginia Tech in Blacksburg. The wealthy have money to invest in those services, so it makes sense for banks to doggedly pursue their business.

At some banks, that mentality extended only to traditional banking services: checking accounts, savings accounts and mortgages. In the meantime, brokerage companies like Merrill Lynch, Charles Schwab and Fidelity won over many of those coveted customers — and their extra cash.

Remember flopping on your couch about 10 or 15 years ago, clicking on the football game and, at the commercial break, seeing a chunky black bull strolling around a china shop? Maybe it made you want to call Merrill Lynch. The company was bullish on the future. If you had the money, they were willing to help you get a piece of stock market steak.

People with money got the message from those Merrill Lynch commercials. As the bull stock market roared through most of the 1990s, more Americans started making more than they could spend quickly. So, they let brokers take care of it. They kept their checking accounts at banks, but they let brokerages manage their stocks and retirement plans. According to a Spectrem Group study of households with a net worth of at least $5 million, just 6 percent use banks for financial advice. A hefty 42 percent use a full-service broker. Why? "Banks are not leveraging their relationships," says David Thompson a senior consultant at the San Francisco-based research firm.

That may be about to change. Bankers are responding with a renewed emphasis on private banking services, offering high-interest bearing accounts and "personal relationship managers." Atlanta-based Sun Trust, with $11.4 billion in branch deposits in Virginia in June 1998, now hawks a suite of private banking services. Even as Charlotte, N.C.-based Bank of America lays off thousands of employees, it is opening 10 private banking offices in high-potential markets mainly on the West Coast. Bank of America had more than $11.3 billion in branch deposits in Virginia as of June 1998 and has private banking offices in Charlottesville, Lynchburg, McLean, Newport News, Norfolk, Richmond and Roanoke.

With smaller resources, community banks may seem most vulnerable to competition from brokers and larger banks’ private services. Charles H. Majors, president of Danville’s American National Bank and Trust, admits, "We find people at a certain level use (brokerages) as well as us." In response, some community banks have formed alliances to purchase services from independent brokerages. American National, for example, offers its customers the services of Uvest, a discount brokerage. Majors also hopes to retain the loyalty of customers who received personal treatment when they weren’t rich or when their businesses were still small.

BB&T executives delved into the private banking market more recently. As they acquired other banks and the Virginia-based regional brokerage Scott and Stringfellow, they realized they needed to offer wealthy customers one person who could introduce them to all of BB&T’s financial services. Too often, the bank would nurse small business owners only to watch them sell their factories and become clients for brokers. "We simply had to stand up [and] take account of what we were doing," says Allan Funk, the manager of BB&T’s private financial services group.

BB&T unveiled a pilot program in private financial services in 1999. After tasting success, the bank’s executives decided to expand in May. The goal is to have at least one private banking office in each of the bank’s 22 regions, which include the Roanoke and Lynchburg areas, Hampton Roads, the Interstate 95 corridor and the Washington, D.C., metropolitan area.

How do the bigger banks get their customers to move beyond checking accounts? They seem to be backing off commercial advertising and relying more on word of mouth. They’re earning referrals by making the move to town easier for new doctors and lawyers. One Valley’s Strosnider, who recently came under BB&T’s management as the result of a takeover, counts several of Hall’s fellow radiologists among his clients. Strosnider’s new BB&T colleague in Norfolk, Sherri Beeckler, says she gets referrals from BB&T’s commercial loan officers. Many clients are surprised to learn a bank can manage their assets "and do it so well," she says.

What lies down the road for private banking? More of it, says Strosnider. He and others expect the market to expand with the economy. As brokers start offering checking accounts, their differences with banks will blur. "Bank is becoming a bad word," says BB&T’s Funk. It’s too conservative. Don’t be surprised to hear the term "financial institution" more in the future, he says.

The latest generation of wealthy clients might not even want a personal banker. They might prefer to deal with ATMs, telephones and Web sites. After years of watching college students in Charlottesville, Darden School of Business emeritus professor Charles Meiburg observes, "The present generation coming out of college is more comfortable pressing telephone buttons."

Customers from earlier generations, like Hall, the radiologist, will enjoy the benefits of their own personal relationship manager. Whenever he looks up from his X-rays and remembers he needs anything, from a credit card for his 19-year-old to a mortgage for his clinic’s new construction, Strosnider will be there. "I can go to Mark and ask a question, and I will get an answer," Hall says. "Maybe I won’t get it immediately, but I won’t get the round-robin treatment either."