Comerica Inc. of Detroit has announced that it will provide personal trust services to clients of Dain Rauscher.
The alliance, announced Monday, is the second such agreement for Comerica in five months. In November, Comerica agreed to offer clients of New York's PaineWebber Inc. services including personal trust, estate planning, and income tax management. Comerica's goal is to expand its client base by teaming up with brokerage firms.
David B. Stephens, an executive vice president at the Detroit company's bank subsidiary, said PaineWebber accounts for 23% of Comerica's new trust business. With a similar boost from the Dain Rauscher alliance, he added, the two brokerages could account for about half of the banking company's new personal trust accounts.
Mr. Stephens said the alliances are win-win situations for both Comerica and the brokerage firms. Comerica, which has $38.6 billion of assets, gets to market to new clients nationally, and Minneapolis-based Dain Rauscher, which manages $68 billion of assets, can supply its clients with added services.
James Bergeron, a vice president and manager of personal trust and estate services at Dain Rauscher, said his firm closely watched the relationship between Comerica and PaineWebber.
"We saw a bank that was doing this already and a bank that was effectively learning from that relationship how to service a brokerage firm," Mr. Bergeron said. "The alliance was clearly the right move."
But if the decision to ally was so clear, why haven't others followed Comerica's lead? David Ross Palmer, a high-net-worth investment analyst at Lobue Associates in Falmouth, Mass., said banks are wary of the potential competitive clash.
"Banks and financial services are always fearful about losing their clients to someone else. No one wants to take that chance," Mr. Palmer said.
Mr. Bergeron said losing customers is not a concern because Comerica agreed to limit the services it would offer. "Comerica told us, 'We are not going to provide or initiate other services unless that is something Dain Rauscher wants,' " he said.
Mr. Stephens said Comerica is considering forming similar alliances with insurance companies during the next six months. But meanwhile, he said, the bank will focus on opening offices in Minneapolis, Denver, Phoenix, and Dallas to serve Dain Rauscher clients.
