Comerica in Deal to Sell Trust Services To Affluent Customers of

marketing its trust and private banking services to customers of PaineWebber, the fourth-largest brokerage in the U.S. The partnership, launched Tuesday in Michigan and Florida, gives Detroit-based Comerica access to a firm with a reputation for retail marketing prowess. PaineWebber, for its part, gains the ability to offer trust products and services without having to risk its own capital to develop them. PaineWebber, which has 2.4 million customers nationwide, fields 400 salespeople in Michigan and 900 in Florida. John W. Emery, personal trust manager at PaineWebber, said the sales drive should be expanded to California, Texas, and Illinois within a year. The deal marks the first time that a national brokerage house has teamed with a bank to crack the trust market, said Edward E. Furash, president of Furash & Co., a Washington consulting firm. "In a rapidly changing industry, we are going to see a whole pattern of these strategic alliances," Mr. Furash said. But, he cautioned, "we have to view them as experiments to see whether the parties can make them work." Indeed, such alliances haven't always worked out. For instance, NationsBank's vaunted partnership with Dean Witter Financial Services, unveiled in 1992, came unraveled two years later. A top Comerica official said he believes the partnership with PaineWebber will succeed partly because the two companies have similar client profiles. "They're very much the same, not only in terms of asset size, but also in terms of expectations and financial planning," said David B. Stephens, executive vice president of Comerica. The typical Comerica private banking client has $3 million in investable assets, he said. The alliance between the two financial services institutions arose from a phone call three months ago from Mr. Stephens to a PaineWebber official. "The first thing we had to determine when we got the key people together was, Did we like each other and did we leave that first meeting believing in each other?" Mr. Stephens said. The arrangement calls for Comerica to provide the products and services - including estate planning and portfolio management - that PaineWebber brokers will offer to clients. Terms of the alliance, such as how each party will be compensated, were not disclosed. PaineWebber isn't completely new to the trust business. It administers $46 billion in trust assets through alliances with six small trust companies in a handful of states. The brokerage turned to Comerica to expand its offerings and geographical reach, said PaineWebber's Mr. Emery. David Ross Palmer, a New York-based trust and private banking consultant, said the brokerage firm was wise to try to expand this way. "PaineWebber is behind the track in terms of national coverage, unlike Merrill Lynch and Prudential," he said. Comerica, with $16.5 billion of assets overall, has $32.8 billion of discretionary trust assets under management, including $6.2 billion in personal trust. As a result of the alliance, Comerica will provide PaineWebber clients in Michigan and Florida with new services, including a range of credit and money management services for entrepreneurs. - John Kimelman contributed to this article.