ING Investment Management Americas' top executive said his firm expects more distribution of its products through banks this year with banks continuing their move to broader, open-architecture platforms.
Robert W. Crispin, the New York firm's chairman and chief executive, said it has well-established distribution arrangements with such large banks as Wachovia Corp., Bank of America Corp., and Wells Fargo & Co., and that it wants to strengthen those relationships while starting some with other banks.
As of Nov. 30 the unit of the Dutch financial services giant ING Group NV had $180 billion of assets under management. Fifteen percent of its new retail product distribution is coming through banks.
"Certainly we expect growth, and we will be surprised if we don't have a nice increase over" the 15% level this year, Mr. Crispin said. "The bank channel is the most rapidly growing channel of distribution for us and really for the industry overall."
Bank distribution is growing quickly because banks are going from offering only proprietary products to a more open-architecture environment, eager to generate assets from a larger product selection, Mr. Crispin said.
"A large driver for our success is banks are on a quest for more fee income," he said. "Right now, with the flat yield curve, and the pressure on net interest margins in the bank world, growth of fee income is a very important tactical, perhaps strategic objective for banks.
"Banks are extremely interested in generating fee income. This isn't just a 2006 phenomenon - this is something we expect to continue as long as we are in this current yield curve environment."
On Dec. 4, ING Group named Dave Bullock president and CEO of ING Funds Distributor, its fund distribution arm. Mr. Crispin said he hired Mr. Bullock (who had held the same titles at Old Mutual Capital, the U.S. distribution arm of Old Mutual PLC) to boost sales through banks.
Mr. Crispin said he wants his firm to do more cross-selling from its product base, which includes mutual funds, variable annuities, life insurance, and fixed annuities.
"There is a real trend in the industry where they'd like to do more with fewer providers," he said of banks. "ING has a real credible spectrum of products, and that makes us attractive to banks so that they don't have to go out and find what we can offer from four or five different places."
Despite ING's wealth of products and banking ties, each of its products has to perform solidly and steadily on its own, Mr. Crispin said.
"ING has wonderful relationships with banks, but they aren't going to give us opportunities unless we can deliver performance," he said. "In this new open-architecture environment, we have to deliver quality and competitive products. If we don't meet their needs, then we won't be their preferred provider." Banks "are an extremely important partner of ours," he said. "It is not sufficient to say that they are a distribution channel, because these are partners of ours. So the relationship development and the development of a broad and credible product lineup are critical to our success."
