Regions Financial (RF) is partnering with a broker-dealer to expand its newly refurbished wealth management division.
The Birmingham, Ala., company said Thursday that it will work with PrimeVest Financial to provide advisory and investment services at all of its branches. Over the next year, the $122 billion-asset company will hire 100 licensed consultants that it will station at each branch. Regions already has more than 400 licensed associates.
"We have a pretty disciplined roll-out plan and we will take it from there to be fully implemented out in our footprint by the end of 2015," Jim Nonnengard, executive vice president of Regions Investment Services, a division of Regions Wealth Management, said in an interview. Regions plans to have up to 300 licensed consultants at select branches within three years.
PrimeVest will help Regions with systems support to offer customers a full range of advisory services that will include mutual funds, annuities, retirement planning and asset-based wealth management. The strategy seems to mirror a strategy Regions pursued when it owned the broker-dealer Morgan Keegan, which was sold to Raymond James Financial (RJF) earlier this year to boost liquidity and capital.
But Regions' management says the strategy is slightly different because the new agreement allows Regions to outsource the broker-dealer aspect, which should save time and money. Regions also faced heavy regulatory scrutiny when it ran an in-house broker-dealer.
"Just in the compliance world, PrimeVest was prepared for that and they were prepared for that early," Nonnengard said. "It was a pretty easy decision to say let's get together and serve the customers' needs quickly and efficiently for customers so we don't miss an opportunity."
Regions still banks many of its clients from Morgan Keegan but it lost the broker-dealer services when it sold the firm. Since then, the company has aggressively restructured its insurance and wealth services, bringing them under one roof to have a more seamless approach to customers. The agreement with PrimeVest lets Regions offer broker-dealer servicers under its own name but on a grander scale as the company attempts to reach what it calls the "mass affluent."
"We're filling our consumer and mass affluent world with world-class product planning solutions and retirement income solutions that are available," Nonnengard said. "All competitors have that and we need to have it."
PrimeVest, a member of the Cetera Financial Group, already has the infrastructure and systems to serve in an advisory role. The company works with about 500 financial institutions nationwide and has more than $24 billion in total client assets.
"Because we're experts in this area, we understand what it's like to support a bank with a size like Regions," Catherine Bonneau, PrimeVest's president and chief executive, said in an interview. "I just know that from the vision articulated and our ability to implement and execute here, it dovetails beautifully."