A year after launching its wealth management unit, Ohio's FirstMerit Corp. has hired a top executive from National City Corp.'s asset management unit to help develop the smaller company's private-client business.
The $10.5 billion-asset Akron banking company announced Thursday the hiring of Terri L. Cable to head its wealth management group. Ms. Cable is to run the company's trust and private-client services, estate and financial planning, brokerage, and the executive compensation and insurance businesses.
She succeeds George P. Paidas, who was promoted to senior executive vice president in charge of all segments of the bank.
With some of the nation's megabanks consumed with mergers, acquisitions, and mutual fund investigations, Ms. Cable said, community banks have an opening. "There is a lot going on for our competitors in the footprint," she said. "By having a … strategy that is focused on the community, we can develop business. People want service. They want a provider that they can touch."
Ms. Cable, who was an executive vice president and managing director of National City's private-client group in Cleveland, said a company like FirstMerit can successfully compete with any other, from small regional investment firms to large banks.
"I do think that with the announcement of Bank One's acquisition [by J.P. Morgan Chase & Co.] that there are opportunities for us in Ohio," Ms. Cable said. "People want consistency. They want to know that their provider will be there tomorrow."
FirstMerit's wealth management unit is the third-largest bank-owned asset manager in northeast Ohio, with $2.5 billion of assets under management. Its footprint extends into 24 counties in northeastern Ohio and western Pennsylvania. FirstMerit has developed wealth management business in Cleveland, Akron, and Canton.
Ms. Cable said the company has just sent the unit into Toledo and is looking to move south into Columbus. She said it will try to leverage its distribution and carefully add adjacent counties.
It created a relationship management unit for its high-net-worth clients in January 2003. At the time, Mr. Paidas said the bank wanted to focus on managing clients rather than products. The unit offers customers with more than $1 million of investable assets a single point of contact to integrate their trust, private banking, and brokerage services.
In July the wealth management arm added a private-client services unit, FirstMerit Private Client Services, to try to cross-sell to the bank's trust, wealth management, and brokerage customers.
"Customers want a full-service shop," Ms. Cable said. "We had to be proactive to come to them with a private banking unit. Banks like FirstMerit can provide this level of service."
Miles Milton, a vice president and institutional marketing manager at FirstMerit, said that, in order to compete, small and midsize banks must be willing to offer third-party products while remaining the hub of each customer relationship.
In August 2002, FirstMerit sold its $250 million proprietary fund business to Federated Investors Inc. of Pittsburgh so it could focus on third-party products.
Earlier that August, the Akron bank had allied itself with Answer Financial Inc., an online insurance agency, to offer auto, home, life, health, dental, and long-term-care insurance, as well as prepaid legal service, home warranties, vision and prescription discount plans, travel insurance, pet insurance, and other products. And in the fourth quarter of 2001, First Merit made a deal to sell SEI Investments' separately managed accounts.
"We have to offer best-in-class investment management capabilities," Mr. Milton said. "Ten years ago, a bank of this size couldn't compete, but now with the playing field leveled, we can succeed by delivering high-end service to our clients."
Ms. Cable said she is confident FirstMerit can become the financial adviser of choice in Ohio.
"Local delivery is key," she said. "It can be a done. We want to successfully define our niche. We aren't trying to be all things to all people."
