Reliance Financial Corp., which has used an open-architecture wealth management model since it opened its doors in 1992, expects the growing popularity of the approach to help it expand its distribution through banks and other financial firms.
A quarter of the Atlanta wealth management firm's $42 billion of assets under management is through banks. Kenneth J. Phelps, a managing principal at Reliance and the chief executive of its trust company, said last week that he expects growth "from the midteens to 20% annually."
"The en vogue idea of open architecture has been our operating mantra since our inception," Mr. Phelps said. "We don't offer proprietary mutual funds or any Reliance products. This has allowed us to seek out the best products for our customers."
Reliance built a base of assets by offering wealth management products and services to community banks, small registered investment advisers, and financial consultants. In April it acquired SunGard Inc.'s wealth management outsourcing business and began targeting midsize banks and wealth managers.
Before the acquisition, Reliance had a contract with SunGard, of Wayne, Pa., that precluded it from pursuing trust companies with assets of $1 billion to $10 billion as customers, said James T. Maxwell, a managing principal at Reliance and the trust company's chief operating officer.
"We now view the market we want to be involved in as companies from start-up to $10 billion in assets," Mr. Maxwell said.
Anthony A. Guthrie, a managing principal at Reliance, said it started as a provider of back-office services, including clearing and trust accounting. Now it is a full-service provider for banks, brokerage companies, and insurance firms, he said.
"We found, over time, that clients wanted more than just back-office services," Mr. Guthrie said. "At the end of the day, clients can come to us to buy a full menu of solutions or bits and pieces of a solution."
Reliance announced in December that it was teaming up with FundQuest Inc., the Boston investment management unit of BNP Paribas SA, to assemble a set of wealth management products and services for banks and wealth managers.
The offering, which will be rolled out this quarter, includes access to a wider array of nonproprietary managers, investment management services, trading and settlement, and trust accounting and custody. It will also feature access to FundQuest's unified managed account platform.
Unified managed accounts are among the hottest investment products on the market right now. They allow an adviser to assemble multiple products - including managed accounts, mutual funds, and exchange-traded funds - on a single platform.
Mr. Maxwell said Reliance isn't finding an outcry for them from community banks.
"We are really not seeing smaller banking speaking the language of UMAs yet," he said. "The smaller banks are using relationship management and bringing in more of an individual's portfolio, but that hasn't led to UMAs yet. Perhaps we'll see them looking for it in the future, but demand is at the low end.
"In the middle market and the high end, UMA is the buzzword of buzzwords, but not down market yet."
Reliance has grown considerably in the past quarter. It had $39 billion of assets under management and administration and partnerships with 50 bank trust institutions and wealth management firms at the end of September and now has $42 billion.
Mr. Phelps said Reliance's footprint stretches from New Jersey to Montana. He said the focus is not just on community banks.
"Once you build a template, you can run this model through any number of intermediaries, including broker-dealers, registered investment advisers, accountants, law firms, you name it," he said. "Once we developed the model, we could offer it to any provider that touches the end user."
Mr. Guthrie said he expects to increase distribution with certified public accountants. He said the opportunity is still relatively small but growing quickly.
