Pershing LLC, Bank of New York Co.'s clearing services arm, says it hopes to develop assets by cross-selling fee-based services from several bank units through the advisory channel.
John Iachello, a managing director at Pershing's advisor solutions unit, said the Jersey City company will "aggressively" expand its $40 billion of assets under management during the next five years by offering a platform of fee-based products - including managed accounts from Bank of New York subsidiaries such as Lockwood Advisors Inc. and services from Bank of New York Trust Co. - to registered investment advisers and broker-dealers.
"We have reached a tipping point in the industry where fee-based products have become the norm," Mr. Iachello said. "These products are the norm not just for independent advisers but for broker-dealers too. There are a large group of broker-dealers clearing through Pershing that are interested in the same fee-based services that independent advisers want."
Pershing has been expanding its staff and product array since the June rebranding of the unit, which previously operated as Pershing Investment Manager Services, he said. The rebranding broadened the unit's focus to working directly with registered advisers and broker-dealers to offer customized services to both independent and dually registered investment advisers, as well as to large investment managers.
Mr. Iachello said the company now is offering fee-based services to both advisers and broker-dealers. These include Managed Account Exchange, a network of proprietary managed accounts from Lockwood and nonproprietary managed accounts; fixed-income products; custody services from Bank of New York; and trust services.
"We are uniquely positioned to offer all of this through one platform," he said. "We can offer brokerage through Pershing, bank custody through Pershing and the Bank of New York, and trust accounts all on one platform."
Analysts said fee-based services are growing - but relatively slowly.
"A firm like Pershing is going to need to proceed carefully," said Burton Greenwald, an analyst at BJ Greenwald Associates in Philadelphia. "They will need to pair these services with reliable trust services in order to make an immediate profit."
Mr. Iachello said he is confident the new strategy will work.
"From the trends that we have seen and the information that we have received, this market is here to stay," he said. "The reason that Pershing has decided to make it a core offering is that we believe that this is not going away."
Pershing Advisor Solutions increased its assets under management by 33%, to $40 billion, during the first six months of the year, Mr. Iachello said. The unit hired five executives Monday, and he said he plans to add staff and products aggressively in order to expand through both broker-dealers and registered investment advisers.
This week's hirings were of T.J. Gilsenan, Trent Witthoeft, Sheetal Doshi Brown, Jill Steffes, and Janie Carroll Peruyero. Mr. Gilsenan was hired as a director; the others, as vice presidents. He was the head of Schwab Institutional's separately managed accounts business, and Ms. Brown and Ms. Steffes also worked at Schwab Institutional.
Mr. Witthoeft's responsibilities include working with Pershing Advisor Solutions' customers and prospects to identify workflow and technology needs. He was a senior relationship manager of premier accounts at Advent Software Inc. Ms. Brown will develop business and manage customer relationships in the Southeast. She was a business development officer at Schwab.
Ms. Steffes will lead research and manage projects in business development. She was most recently a division project manager in institutional sales at Schwab. Ms. Peruyero will oversee strategic marketing. She led client acquisition marketing in JPMorgan Chase & Co.'s high-net-worth business.
Mr. Iachello said the company has only begun to develop its Pershing Advisor Solutions staff.
"We are going to grow our sales staff. We are going to grow our support staff. We are going to grow our technology staff," he said. "We are going to grow them all equivalently, and we are going to continue to grow them while maintaining strong levels of service. We believe that strong staff and strong service will drive business toward us."
