Allfirst Financial Inc.s hiring this week of a Vanguard principal was part of a strategy to expand the Baltimore companys individual and institutional investment advice services nationwide.
Michael Odlum, who will lead Allied Investment Advisors, Allfirsts institutional investment advisory unit, said in an interview that he will focus on extending the banking companys reach by signing up pensions, endowments and especially not-for-profits such as hospitals, schools, religious organizations, and charities.
Such connections can also draw the business of the organizations wealthy board members, he said.
By working closely with Allfirsts new wealth management services division and offering portfolio management, Allied Investment Advisors can begin getting more wealthy clients, said Mr. Odlum, who was named Tuesday as president and chief operating officer of the unit.
He plans to start by concentrating on the nonprofit organizations already in Allied Investments client base. Of the $15 billion the unit manages, $910 million is for nonprofits.
To attract more of those clients a company must offer products and services they cannot get elsewhere, Mr. Odlum said. Allied Investment Advisors can custom-manage portfolios as small as $500,000 and keep them segregated, he said.
At Vanguard and other mutual fund companies you have to try to fit an institution into a portfolio instead of creating a portfolio for each institution, Mr. Odlum said. Here we can run portfolios based on needs.
Allied Investment Advisors also offers access to socially responsible investments. Many nonprofits and charities are interested in those products, but most institutional asset managers lack the in-house expertise to handle it, he said.Mr. Odlum said he sees no reason his unit cannot leverage Allfirsts banking relationships in going national. The challenge will be turning them into investment management relationships and then showing the nation the job you did regionally.
Burton Greenwald, a high-net-worth analyst in Philadelphia, said the growth strategy based on nonprofits is not unique. Most large banks, including First Union Bancorp, Mellon Financial Corp., and Wells Fargo & Co., offer investment services to those groups to entice wealthy clients.
The key is products, Mr. Greenwald said. The wealthy arent stupid. They want the best, and if you work and work well for their churches or for the hospitals where they sit on the boards, then they may bring their personal finances to you.
Mr. Odlum has spent 25 years building and overseeing investment management businesses. He had been chairman of Vanguard Groups trust investment committee and senior officer of its advisory unit, and had led the firms initial effort to introduce investment advice online.
At Allied Investment Advisors he succeeded Rick Gold, an executive vice president of Allfirst Asset Management Group, who will continue to run the groups other units Allfirst Trust, Allfirst Brokerage, and Allfirst Insurance.
Allfirst Financial, which has $18 billion of assets, is owned by Allied Irish Banks PLC in Dublin.
