Bucking a banking tradition, Banc One Corp. is moving to make money management rather than trust services the hub of its investment business.
As a first step, the $87 billion-asset banking company chose the president of its asset management division, David J. Kundert, to lead Banc One's entire investment and trust unit.
The restructuring reflects a growing recognition by some banks that the investment products business has grown beyond its roots in bank trust departments.
Mr. Kundert said that his appointment "sends a message that investment management is at the very core of what we do.
"We're trying to build a very consultative approach to the investment business, instead of going out there and pushing products," he said.
On Sept. 8, Mr. Kundert gained the title of chief executive of Banc One Investment Management and Trust Group - a scant 24 hours after the group's former head, Charles W. Sulerzyski, resigned to take a job at Fidelity Investments.
Mr. Kundert now oversees Banc One's 2,000 investment and trust employees in 66 offices nationwide. He's also responsible for helping manage more than $26 billion of institutional and personal trust assets, as well as $10 billion of assets in the One Group of mutual funds.
He said it is too soon to detail his plans for the unit, but said he will be looking at ways to consolidate more of Banc One's accounting, pricing, marketing, and product development through the banking company's Columbus, Ohio, headquarters.
Many industry experts say it's no surprise that Banc One would hand over the reins of its trust and asset management business to a veteran investment professional with 25 years' experience.
"There's been a general migration away from strictly the trust business, to an asset management business," said Edward E. Furash, chairman of Furash & Co., a Washington banking and investment consulting firm. "It's part of a drive by banks to grow their assets under management, and the fees that go with managing those assets."
Daniel R. Darst, executive vice president of Optima Group, a Fairfield, Conn., consultancy, went a step further, saying that Banc One's decision to choose Mr. Kundert over a traditional trust executive was a good move.
"The banks that look at money management as simply an extension of their trust business are falling off the track," Mr. Darst said. Banc One is "doing right by treating this as a viable business of its own."
BankAmerica Corp., Wells Fargo & Co., and PNC Bank Corp. are examples of other banking companies that have put an emphasis on asset management, he said.
While many industry observers are giving Banc One kudos, some are saying the company's efforts only go part of the way. Banc One Securities Corp., the company's brokerage arm, remains separate and under the oversight of Michael Reed, its president.
And some industry insiders say that not giving Mr. Kundert control over that vital outlet of retail distribution may hobble his efforts to make the Banc One a leading provider of investment products and services.
"If retail (investment sales) still report into a different level, then he's going to have certain difficulties," said Geoffrey R. Bobroff, a mutual fund consultant in East Greenwich, R.I. "It's a real problem that traditionally the banks' managing (of investment products) has been very dispersed."
