Steve Dowden has big shoes to fill as the new chief executive of Invest Financial Corp., and his strategy is to switch to an older, more comfortable pair.
Dowden, who took over Nov. 2 and is also Invest's president, said the priority for his initial 90 days on the job is to restore banks and credit unions as the Tampa broker-dealer's primary service distribution focus.
This would backtrack a bit from the effort of his predecessor, the recently retired Lynn Niedermeier, to broaden the company's distribution effort to include independent advisers.
"We want to increase our penetration with banks," Dowden said in an interview. "I want to reach out to our bank partners and bank advisers. I want to understand how we bring them value and how we can continue to develop those relationships."
His plan has backers. In the eyes of some observers, Invest lost focus in recent years as it concentrated on adding relationships with independent advisers. The real growth opportunity is with banks and credit unions, analysts said.
"A relationship with a single bank is going to result in far greater sales and revenue than a relationship with 10 independent advisers," said Burton Greenwald of BJ Greenwald Associates in Philadelphia. "Due to market conditions, banks are very interested in partnering with a third-party investment provider rather than having to support their own proprietary platforms."
Invest is a unit of Jackson National Life Insurance Co., a Lansing, Mich., subsidiary of London's Prudential PLC. It sells wealth management products and services to 120 banking companies. Dowden said Invest has a "tremendous" pipeline of banks with which it is preparing partnerships.
Invest increased the number of advisers using its platform by 19% during the first nine months of this year, to 1,080, as compared to the year earlier, but most of this growth was driven by the company's adding independent advisers, according to spokesman Andrew Silver.
Last year 45% of the advisers were in the bank channel, but this year that share has declined to 33%. Silver, who said the company would not break out the number of advisers in each channel, attributed the change in share to "an overall increase in reps in the independent channel and a slight decline in the bank channel."
Dowden said he wants to use "targeted marketing" to attract banks. This does not necessarily require Invest to increase its advertising and marketing, he said, but "we need to spend more wisely on marketing."
The 48-year-old executive was the president and CEO of Cuna Brokerage Services Inc., a unit of Cuna Mutual Group, an investment and insurance firm that serves credit unions. At Cuna he led a sales force of 550 advisers. Before that, he was the president of the investment and insurance program at the former IBM Mid America Employees Federal Credit Union.
Analysts said Invest will face competition from broker-dealers, including Raymond James Financial, that have a stronger foothold with banks. Dowden said Invest plans to "grow and evolve" in the bank market but would not specify how many banks it expects to add.
"Everyone knows that in this market environment, you need a partner to do business with," Dowden said. "These are challenging conditions. It is going to take a cooperative effort between a broker-dealer and a financial institution for growth."
Invest has added banks and credit unions already this year. In September, it announced partnerships with four banks — First United Bank in Crete, Ill.; AB&T National Bank in Albany, Ga.; United Community Bank in Blairsville, Ga., and Ouachita Independent Bank in Monroe, La. — that collectively have 129 branches and more than $8.8 billion of deposits.
In August, Invest added three credit unions — Royal Credit Union in Eau Claire, Wis.; Accentra Credit Union in Austin, Minn., and Cornerstone Federal Credit Union in Carlisle, Pa. — which collectively have 17 branches and more than $1.16 billion in total assets.
Dowden said Invest still wants to support independent advisers. "The channel has been a real growth area for us," he said. "We want to be able to support both channels in a balanced way, but we want to make sure that the industry knows we are committed to banks. … I think we have a wonderful foundation to grow both and to cross-pollinate across both."