Harris Bankcorp Inc., the Chicago unit of Bank of Montreal, is making strides in the financial planning business, executives said.

Assets under management at the McLean, Va., financial planning firm Sullivan, Bruyette, Speros & Blayney Inc. have grown more than 150%, to over $2 billion, since Harris acquired it five years ago, said Terry Jenkins, the president of Harris Private Bank.

The planning firm, now known as Harris SBSB, is part of the private bank.

The 126-year-old Harris traditionally had managed clients' assets on a purely discretionary basis. It started shifting toward a consultative, advice-based approach after determining that its high-net-worth clients sought a "broader planning experience," according to Mr. Jenkins, who heads Harris' U.S. wealth management businesses.

"That confirmed our desire to make the [Sullivan] acquisition and work to evolve our entire wealth business to a similar planning approach," he said.

Excluding Harris SBSB, the private bank has built an advisory corps of more than 70 people who are certified financial planners, certified public accountants, or both, Mr. Jenkins said.

Harris SBSB, which provides planning and advisory services to affluent clients, has grown efficiently. Greg Sullivan, the president of that business, said that since the acquisition it has added only six employees, raising its total of 47.

Productivity gains at the business have been in part a result of the staff's growing experience and skills, Mr. Sullivan said, though new software that allows for more efficient portfolio management also has been a major factor.

The resources of Harris Bankcorp have also been an advantage for the planning business, he said. For instance, when Harris SBSB planners confront complex tax issues, they can seek guidance from their colleagues at Harris MyCFO, the Harris Bankcorp unit that provides multifamily office services.

In turn, Harris SBSB advisers have shared their knowledge of best practices with financial planners elsewhere within the private bank, Mr. Sullivan said.

The growth of Harris SBSB, which has offices in Virginia, Florida, Chicago, and Arizona, is not significantly attributable to cross-selling, he said. Existing clients refer 80% of its new ones, while other referrals come from lawyers, accountants, and other outside professionals, he said.

A 2006 study of financial advisory practices by the Seattle accounting and consulting firm Moss Adams LLP found that revenue at planning shops owned by another firm grew more than twice as quickly as revenue at their independent counterparts.

But Leslie Beck, an independent financial planner in Palo Alto, Calif., said that bank acquisitions of financial planning firms do not always work out smoothly.

In fact, when she started her own firm a year ago, she said, she drew up a succession strategy for planning firms that included never selling to a bank.

Ms. Beck has been an executive at two planning firms that were bought by banks. In both instances, the purchases produced "disastrous results," she said.

Problems that can crop up in such deals include a mismatch between the target customers of the bank and the planning firm, as well as a reluctance on the planner's part to surrender its independence, she said.

Another strain on bank-owned planning firms, particularly small ones, is the cost of complying with Sarbanes-Oxley Act requirements, Ms. Beck said.

In Harris' case, ensuring that Mr. Sullivan stayed with the company likely has played a big part in its success, she said. "Once the main person bringing in clients leaves, a lot of those clients also leave."

Like Harris SBSB, Harris MyCFO became part of Harris Bankcorp through an acquisition. Harris bought certain assets of myCFO Inc. of Mountain View, Calif., in 2002. That purchase, valued at $30 million, brought the wealth management business $5.7 billion of assets.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.