For Richard D. Byrd, the opportunity to move into the driver's seat at the wealth management division of City National Bank in Los Angeles was a no-brainer.
It meant moving from the much bigger Wells Fargo & Co. private-client services division, where he was the regional executive in charge of Southern California, but "for me, personally," Mr. Byrd said, "this was a chance to run an entire division. This was a chance to make the decisions. I was involved in decision-making at Wells, but I was not the ultimate decision maker. I wanted to be more directly involved in making strategic decisions."
At San Francisco-based Wells Fargo, he was one of nine regional managing directors in the private-client division. At City National, it was announced last Wednesday, he is the director of wealth management services and a member of the bank's executive committee.
Adding offices, employees, and a wider array of open-architecture products should fuel "strong" organic growth in the wealth management unit, Mr. Byrd said.
"We can ramp this business up," he said. "We plan to broaden our partnerships" with money managers. "We plan to expand geographically. We are tight geographically now. We want to get closer to our current clients and gain exposure in wealthy neighborhoods."
City National provides banking, investment, and trust services through 54 offices, including 12 full-service regional centers, in Southern California, the San Francisco Bay Area, and New York City.
Mr. Byrd said he plans to open new offices in California and "one or two" outside the state.
"We have the New York office, and it is very possible that we will look at opening another de novo operation outside of California," he said.
Analysts said that City National has developed a strong wealth management business in California but could be disappointed by the outcome of any effort to expand outside the state. Since 2000, its assets under management have grown 148.5%, to $16.4 billion at March 31.
The unit of City National Corp. reported that its second-quarter results included an 18% increase in trust and investment fees from the year earlier. Assets under management or administration reached $37 billion at June 30, up 24.3% since the end of 2003.
Other California banking companies that have developed a niche in wealth management have been looking, as City National does, to spread nationally. Unionbancal Corp.'s Highmark funds announced plans in May to grow nationally by expanding a network of regional sales teams that sell its products to small and midsize broker-dealer companies and registered investment advisers.
In the past two years, Unionbancal has established nine regional sales teams - for the Pacific Northwest, California, Texas, the Southeast, Middle Atlantic states, the Northeast, and three in the Midwest.
Burton Greenwald, an analyst at BJ Greenwald Associates in Philadelphia, said it could be difficult even for established niche players to expand rapidly outside their market footprints.
"Firms, especially firms that are closely linked to a bank and the bank's brand, can grow quicker by focusing on the bank's footprint," he said. "Going outside of that comfort zone can be really disappointing."
Mr. Greenwald said California itself holds a lot of opportunities, a fact recognized by other banking companies around the country. In May, Wilmington Trust Co. of Delaware, which has been trying to expand its business in Southern California, announced the hiring of an executive and plans to offer more services there.
Peter W. Atwater, the head of relationship management at Wilmington Trust, said it had hired Gregory F. Stanford to be president of Wilmington Trust FSB California. His task is to help increase penetration of large California markets like Los Angeles.
Wilmington Trust's western regional headquarters is in the Century City section of Los Angeles. Last year it moved to bigger offices there and in April bought Grant Tani Barash & Altman LLC, a Beverly Hills business management and family office firm that serves high-net-worth clients.
Mr. Byrd said he is aware of the potential in the home market.
"We are focused on high-net-worth investors, and we are lucky enough to be in California where there is a huge supply of wealthy individuals," he said. "We are pretty confident that we can grow even without having to do any dramatic geographic growth."
Mr. Byrd succeeded Shelley Thompson who left the bank at the end of the first quarter. The bank will look to strategically add to its open architecture array of outside money managers, he said, and also try to recruit customer service employees.
"We want to insure that we continue to provide high levels of service," he said. "We want to add service and salespeople that will work closely with our customers."
City National Asset Management and City National Securities Inc., the company's broker-dealer subsidiary, as well as the bank's personal and business trust services, including its 401(k) business, are now Mr. Byrd's responsibility. Collectively, the wealth management services division manages or administers $25.8 billion of investment and trust assets.
