Ixis Asset Management Group, a Chicago wealth manager, says it will increase distribution through banks and registered investment advisers to add to its assets under management.
William C. Butcher has been hired to run the wealth solutions unit, Ixis Asset Management Advisor Group, started in June to target banks and advisers. He noted that Ixis already had distribution arrangements with Wells Fargo & Co. and Bank of America Corp. when he joined but said he hopes to increase distribution by targeting banks both small and large.
The parent, which had $581 billion under management at Sept. 30, owns 15 affiliated money managers nationally that manage products for Ixis to distribute.
Mr. Butcher said Ixis “had a small footprint” in bank distribution, “and my job is to develop it as banks move from a closed to an open architecture environment.” He previously worked for FundQuest Inc., a unit of BNP Paribas, for nine years selling turnkey platforms to banks and other wealth managers.
Ixis is uniquely positioned to help banks migrate to open architecture, in which they offer both proprietary and nonproprietary investment products, Mr. Butcher said. In addition to mutual funds, Ixis offers fee-based products such as multidisciplinary accounts and unified managed accounts.
“Unified managed accounts are really the Holy Grail that all banks are searching for,” he said.
Though some banks have begun offering unified managed accounts, analysts say, wire houses and registered investment advisers have dominated sales of this product.
“Banks were in the catbird seat” when it came to fee-based products, Charles “Chip” Roame, the managing principal at the San Francisco consulting firm Tiburon Strategic Advisors, has said. “They sat there and did nothing and watched two channels blow by them” — a reference to wire houses and registered investment advisers.
But Leonard Reinhart, the chairman and chief executive officer of Lockwood Advisors a unit of Bank of New York’s Pershing LLC that offers unified managed accounts, has noted that banks are working to create unified managed accounts.
“The banks are skating to where the puck is,” Mr. Reinhart said. “Banks, more than other financial services firms, study and plan intensively. Some people say banks are slow to react to things, but banks are reading the research that says this business is moving toward UMAs, so some banks are going to build a UMA platform.”
Mr. Butcher agreed that banks are slowly evolving their wealth management business models. Ixis is targeting 420 banks ranging in size from community banks to the largest institutions, he said, and he is doing a broad mailing followed up individually at each institution.
“Banks have been very receptive,” he said. “I am almost surprised at the response level. There is a lot of curiosity in the industry on how to make this transition. Banks want help. They want someone to help them through. They are not looking to work with a lot of firms. They want a turnkey solution.”
“In the last 12 months,” he added, “banks have made the decision to move in this direction. They want to do what is right for their clients and provide best of breed money management for their clients. They have made the decision, and now they are just looking for whom to partner with. I think there will be a two-year window where banks will be partnering with firms that can provide them with the right products and services.”
