The president of a San Diego broker-dealer that opened last week said he believes he can generate up to $1.5 billion of assets under management this year by selling insurance and investment services through community banks.
Michael Calvelli, the president of Advanced Financial Solutions, said he expects to initiate 10 to 15 bank relationships this year by establishing investment programs or enhancing existing ones at institutions with less than $3 billion of assets. He said he expects to gather $100 million of assets under management from each relationship.
Broker-dealers like Independent Financial Marketing Group in Purchase, N.Y., and Linsco Private Ledger in Boston already offer similar services to community banks. Mr. Calvelli, who said he expects to sign up one or two banks this month, said many community banks are interested in switching to a new broker-dealer.
Community banks want to retain control of the customer relationship, he said, and his company limits its role to training brokers who can be employees of the bank.
"There are a lot of opportunities out there with community banks, even some that are already offering investment products," Mr. Calvelli said. "So many platforms are built around firms that say that they'll put brokers out there, but community banks have been burned by that world. Community banks want a strategic partnership. They want to employ the rep and have control."
He said he expects that within five years Advanced Financial Solutions will have 100 community bank customers generating $200 million apiece of assets under management.
"That is the real target, $20 billion in assets under management," Mr. Calvelli said. "We want to grow assets and service the customers right. What we are really looking to do is to develop relationships with 100 to 125 community banks that want to build quality programs."
Advanced Financial Solutions will begin by looking for community banking relationships in California, Mr. Calvelli said, but some early interest has come from banks elsewhere.
Mr. Calvelli, a 20-year veteran of financial services, once oversaw the San Francisco-based West Coast operation of the Pershing division at the former Donaldson, Lufkin & Jenrette Inc., where he managed more than 50 broker-dealer relationships. The brokers placed or trained by Advanced Financial are to sell mutual funds, managed accounts, and variable and fixed annuities to investors with $150,000 to $200,000 of assets that are currently managed outside the bank channel.
"We want to help community banks get their customers back," he said. "We want to attract customers with assets held in other places outside of the bank. We want to bring them back and allow the bank to be their trusted adviser."
Community banks are very interested in offering fee-based products, he said, including managed accounts and mutual fund wrap accounts.
Amy Beattie and Valorie Seyfert, who co-founded Cuso Financial Services LP, are also the founders of Advanced Financial Solutions. Cuso is a broker-dealer that supplies investment services exclusively to credit unions. It was started seven years ago and has developed 100 credit union relationships.
