BNY Mellon Wealth Management hopes to increase sales this year by pitching its custody services to registered investment advisers.

Peter L. Berg, hired this week as a vice president and sales director to promote custody services to registered investment advisers nationally, said he plans to cross-sell to existing customers and target "breakaway brokers" leaving wire houses for the independent channel.

"Certainly, we are looking to substantially increase revenue by double digits," Berg said in an interview. "I hope that we can increase our client base significantly.

"We want to be selective about that, but we are in a stage in our business where we are relaunching a service that has been around for some time. We have plucked some of the top people that are real veterans that really know the custody business well. The goal now is to get the word out."

Breakaway brokers are a big piece of this growth strategy, Berg said. But BNY Mellon will face stiff competition from other large companies that also want to custody these advisers' assets.

"The industry has certainly been moving in that direction," Berg said. "With the disintegration of the wire house model, there remains a number of significant producer groups that will be going independent."

Some advisers hesitate to go independent because their custody needs are complex, said Berg, who has worked at HSBC and Schwab Institutional.

"There aren't a lot of companies that can fulfill all of their needs," he said. "We can offer a nice package of solutions to fulfill their broker-dealer needs and their higher-end bank custody requirements. We are comprehensive."

The number of breakaway brokers transitioning to independent channel has risen in the past year, according to Fidelity Investments. The Boston company said it helped 50 teams of brokers transition in the first quarter, a 20% increase from a year earlier.

In April, Fidelity started a program designed to pair brokers with independent broker-dealers and registered investment advisory firms. The Boston company also launched a series of regional events and web seminars to help brokers better understand the independent business model.

Berg would not say whether BNY Mellon, a unit of Bank of New York Mellon Corp., planned to come out with a similar program.

In addition to the potential to land new customers, Berg said there are plenty of opportunities for BNY Mellon Wealth Management to cross-sell its custody services to customers already working with the parent bank or one of its affiliates.

These Bank of New York Mellon units include the custody services arm Pershing in Jersey City, which is already servicing some breakaway brokers.

Berg said it is critical to "partner internally to find the best opportunities to cross-sell when appropriate."

"We have a strategy," he said. "It is all about trying to increase penetration with larger existing clients and to identify firms that we feel we can best service because of the array of products and technology we have."

Analysts said in the past five years many companies have launched back-office custody platforms for RIAs.

"Well-established providers like Schwab, State Street and BNY Mellon are facing new competition, but scale remains their biggest weapon," said Russ Prince of Prince & Associates in Shelton, Conn. "They can keep prices low, but they still need to ramp up their offerings to keep up."

Berg, who will report to Dan McCarron, head of the wealth manager's national custody division, said that BNY Mellon, as "the largest custodian in the world," is "well positioned with the right products and services to cross-sell."

"Some of our largest clients are mutual fund companies and institutional managers that also have private client or separate account businesses," Berg continued. "We can work effectively to custody all of those accounts. It is natural for us to service a greater share of their wallet."

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