Sumitomo of Calif. Eyes People with Less than $1M

Rallying under a new trust manager, Sumitomo Bank of California is looking for clients with less than $1 million to invest.

Donald C. Place Jr. recently joined San Francisco-based Sumitomo as a vice president in charge of trust from one of its local rivals, Imperial Trust. In a recent interview, Mr. Place said his most pressing task is to make Sumitomo's trust department "more profitable and get it back on track."

Part of that plan involves new emphasis on attracting individuals with less than $1 million to invest. Most of Sumitomo's investment clients have been large institutions, Mr. Place said.

The high-end retail market is "definitely a business that is fertile because of recent mergers," Mr. Place said.

The private banking divisions of BankAmerica Corp. and Wells Fargo Corp. generally target clients with at least $1 million in investable assets, according to spokeswomen.

"They're leaving a lot of these nice-size accounts behind, or they are sort of neglected," Mr. Place said. "Those accounts can be very profitable."

Sumitomo, which manages $1.3 billion of client assets, has been in the trust business in California for more than 30 years, relying mostly on referrals. Part of Mr. Place's plan is to hire a team of professionals dedicated solely to marketing the trust business.

He also wants to increase the number of middle-market employee benefit plans on his client list.

A unit of Japan's Sumitomo Bank Ltd., $4.9 billion-asset Sumitomo of California offers a menu of investment services that sets it apart from its competition.

To attract affluent consumers who fall short of the $1 million mark, Sumitomo will assign each account its own portfolio manager - a rare practice among investment companies.

Trading securities on an account-by-account basis is a costly endeavor. "It will definitely win over customers, because there is a higher professional content," said Douglas Trott, president of Toronto-based Taddingstone Consulting Group. "But that's going to be a high-level service against the revenue."

Mr. Trott added that since most firms use cost-effective asset allocation strategies with mutual or common trust funds to manage smaller accounts, Sumitomo could use its one-on-one investing style as a marketing ploy.

"It may be an appropriate loss leader, because clients may get a good experience with Sumitomo and then will be willing to bring more money in," Mr. Trott said.

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