Huntington Bancshares has hired an executive from Firstar Corp. to build up its investment business, with a focus on marketing proprietary funds to customers of Huntington Bank.
Daniel B. Benhase, 40, was to join the Columbus, Ohio, company today as head of the private financial group, which comprises investments, insurance, trust, private banking, and brokerage. He will report to Peter E. Geier, Huntington's president and chief operating officer.
"We recognize the need to improve the performance of this business," Mr. Geier said. "It's a significant part of the company's revenues, but it should do a lot more."
Revenues of Huntington's brokerage arm have more than doubled in the past three years, from $16 million in 1997 to $35 million last year. Sales of mutual funds and annuities through the brokerage have risen as well, from $261 million in 1997 to $616 million in 1999.
Huntington's private financial group manages $8.1 billion of assets, including $2.7 billion in its proprietary mutual fund family, the Huntington Funds. The Huntington Funds accounted for only 1.1% of the company's brokerage sales last year, though that was up from 0.4% in 1998.
"We have a great distribution ability within our company," said Mr. Benhase, who oversaw trust, brokerage, and private banking at Firstar of Milwaukee. His goal is to "find out why we haven't sold a lot of our own products through that source," he added.
Traditionally, Huntington's investment sales force has made a point of not pushing Huntington's proprietary mutual funds and annuities to the exclusion of outside providers' products. Mr. Benhase did not suggest that would change.
"We need to provide the best product to our clients," he said. "That doesn't mean we can't manufacture it."
That will not be easy, observers said.
"It's very difficult to sell proprietary products unless performance is not just superior but extraordinary," said Burton Greenwald, a Philadelphia-based mutual fund consultant.
Mr. Greenwald said bank brokers need a "more sophisticated approach" to sell banks' mutual funds. For instance, instead of focusing on performance, they should identify conservative investors and try to sell them on a fund's steady returns, he said.
Huntington's brokerage chief, Rob Comfort, had run the private financial group on an interim basis since March, when vice chairman Judith D. Fisher resigned. Mr. Comfort will return to running the brokerage full-time, a spokeswoman said.
"We've been very successful at our investment sales and retail brokerage," Mr. Geier said. "We need to be as successful on selling customers on our different asset management strategies."
Mr. Benhase said he would spend his first several days at Huntington getting to know the company better. He said he will look at improving Internet account access and how to serve the emerging affluent, but that he has not had time to formulate any specific plans.