HOLLYWOOD, Fla. — The importance of tearing down company silos as a prelude to succeeding in wealth management may be conventional wisdom in the industry, but executives at plenty of banks acknowledge that following through on the concept remains difficult.
This was evident in the annual Bank Insurance and Securities Association convention here this week.
Jordan A. Miller, a senior vice president at Fifth Third Bancorp and director of its investment advisers division, said his company has been trying to remove silos for the past four years but has not gotten all the way there yet.
The $110 billion-asset Cincinnati company had to find a way to tie retail banking and private-client services more closely together, he said, in order to reach its double-digit annual growth targets.
"We had to find a way to work more cohesively," he said. "We cooperated, but we never collaborated. We needed to collaborate to get deeper into a client's wallet."
An essential step, said Mr. Miller, is giving customers a single point of contact. In the past four years, he said, Fifth Third has aligned its bankers with people in its trust and investment businesses to create teams that serve as the single contact point.
Ginger Kelly, a vice president and the senior sales manager for Fifth Third Securities, said the company also instituted a compensation plan that let bankers remain the relationship managers and helped them capture some of the revenue as investors bought products and services from other Fifth Third units.
"It used to be a handoff, but now the bankers stay on as a relationship manager," Ms. Kelly said. "At the end of the day, Fifth Third captures all of the business. This puts the clients' needs first."
"There is no sense forcing clients into channels," Mr. Miller said. "You just need to do the right thing for clients. That has to be the priority."
Huntington Bancshares Inc. in Columbus, Ohio, has created a team-based delivery approach across all its broker-dealer's lines of business. Rob Comfort, the president of Huntington Bancshares' investment unit, Huntington Investment Co., said long-established channels create the biggest problems for banks.
"We had to work to tear down the structure, the road blocks, the silos, and the stupid rules," he said.
In the past five years, the$35 billion-asset company has tied its three investment services components more closely together by introducing a unified distribution model in which one team handles sales and distribution of all the broker-dealer's investment products and services, Mr. Comfort said.
With this approach Huntington has increased its assets under management in the past five years by 53.9%, to $23.4 billion at Dec. 31.
Daniel B. Benhase, the executive vice president of Huntington's private financial group, said this approach has helped investment, trust, and private banking collectively to account for 25% of the regional banking company's total net income last year.
Investment services are "more similar than distinct," he said, and it is crucial to get them on the same page.
"Silos create confusion and inefficiencies," he said. "Each of our units had its own sales force, and they were all calling on the same people. … Our goal was to build all of our businesses and become that essential partner."
Rob Varner, an executive vice president at Synovus Financial Corp.'s investment arm, Synovus Securities Inc., said he knows that his Columbus, Ga., bank needs a more integrated approach to generate stronger sales.
"I think [Huntington] is really on to something," he said. "Customers want a single point of contact. I love the concept of one sales management team. I don't think we'll really break down the silos until we get one sales management team."
Patricia Bonavia, an executive vice president and the chief operating officer of Amcore Investment Group, said she is skeptical. Her company, a unit of Amcore Financial in Rockford, Ill., has spent the past year moving to an open architecture model after selling its proprietary equity funds and its investment management unit in 2005.
"I don't know who has tried to integrate sales, but it is hard to do," she said. "When we tried to get all of our sales on to one platform, it triggered thousands of issues."
Analysts said banks often seem reluctant to accept flatter organizational structures, new compensation plans, or unified sales platforms. Timothy Kight, the president of Focus 3, a Columbus financial consulting firm, said these ideas must come from the top down.
However, he said, it will continue to take some institutions a time to change.
"Being the trusted adviser is still more rhetoric than real at most banks," he said. "The behavior hasn't changed."
