PaineWebber Inc.'s trust administration alliance with BankBoston Corp. has ended.
The fee-sharing alliance, which started in October 1996, called for PaineWebber brokers to refer their wealthy clients to BankBoston for trust administration.
But the arrangement quietly ended in November "because of the length required to achieve a critical mass of customers," a BankBoston spokesman said.
The two employees who were assigned to the program have returned to jobs in BankBoston's global private banking division. The pair had been operating out of a PaineWebber office in BankBoston's headquarters.
The BankBoston spokesman declined to disclose how many clients participated in the alliance. Twenty-four PaineWebber offices in four New England states were involved in the program. "It was not a piece of business that was performing and producing results as quickly as we hoped it would," the spokesman said.
Dennis Hess, an executive vice president for diversified financial services at PaineWebber, said BankBoston was disappointed because it was named trustee to more future accounts than current ones. "In their business plan, they probably thought they would get more fee income immediately," Mr. Hess said.
PaineWebber clients have more than $700 million of trust assets with five banks, including Comerica Inc., Detroit, he said.
Comerica has 13 employees devoted to its PaineWebber alliance. The bank is opening an office Feb. 20 in Memphis, where the brokerage has a large estate planning operation.
Comerica is having more success than BankBoston because "they have better exposure" in more states, Mr. Hess said.
The Comerica alliance, inked in November 1995, was expanded from four states to 25 and is awaiting regulatory approval to enter 14 others.
