Because of rapid financial services consolidation, 38% of the Securities Industry Association's member firms are now owned by banks, up from just 8% in 1990.
That striking change has presented a number of challenges for Irving Weiser, in his roles as chairman of the SIA and president of Dain Rauscher, one of a shrinking number of independent investment banks.
Minneapolis-based Dain Rauscher does not have any immediate plans to join the push to consolidate, Mr. Weiser said in an interview at the SIA's annual convention here.
"I've been a big proponent of financial modernization," Mr. Weiser said, "but just because it's the law doesn't mean you have to have it."
Dain Rauscher is not trying to be the next Citigroup, he added.
"Sandy Weill talks about the 1,700 largest companies in the world that are Citigroup customers," he said. In contrast, Dain Rauscher goes after the middle-market customer. "That's not likely to demand that we be in a position to give them bridge loans or home mortgages," he said.
In its independent stance, Dain Rauscher has some good company on Wall Street, including heavy hitters Goldman Sachs & Co. and Merrill Lynch & Co., which also have pursued an independent strategy, Mr. Weiser said.
He declined to say whether Dain Rauscher has ever been approached by a bank. But he added, "Anyone that says they've never considered it is not doing their job."
Though Dain Rauscher has maintained its independence, Mr. Weiser has been forced to accommodate the growing number of bank-owned brokerages in his role as SIA chairman.
Since the association formed, it has been a leading advocate for the investment banking world, in direct communication with regulators and elected officials in Washington. At times the interests of investment bankers have been at odds with those of commercial banks, which have their own trade groups, such as the American Bankers Association.
"There's a cultural difference between the two," Mr. Weiser said. "Wall Street is a highly entrepreneurial group that doesn't mind trying things."
Rather than fight off a growing banking influence, Mr. Weiser has tried to accommodate it.
"We've had debates over who to let in, including bank-owned firms and another faction that some of us view as competitors: discount firms," he said. "We decided we would be stronger with them."
As a result, building a consensus at the association has been difficult, Mr. Weiser said. So instead of trying to make everyone agree on policy, the SIA has created a subcommittee system that includes a bank-owned group, a discount group, and an independent brokerage group, Mr. Weiser said.
Those committees can lobby and operate autonomously under two conditions: They may not carry the association name, nor may they adopt a policy or opinion contrary to that of the group as a whole.
During Mr. Weiser's role as chairman, the association has opened a dialogue with trade groups that once may have been adversaries. Among them is the American Bankers Association, Mr. Weiser said.
"A lot of this communication happens on the staff level," Mr. Weiser said. "But we did meet once and said, 'Let's write a bill together.' And, you know what? We did it. We brought it to the Hill and got a lot of laughs. But the important part was that we found something to agree on."