The new head of Lehman Brothers Inc.'s private client services division is working to create an integrated asset management operation at the old- line brokerage.
Edward M. Feigeles, who joined Lehman eight months ago from Morgan Stanley & Co., said his vision is to create the "prototypical" asset management group for the wealthy.
The integration of once-separate lines of business Mr. Feigeles has undertaken in recent months is a goal sought by many banks and other financial services firms as they move to meld trust and investment departments with private lending.
At Lehman, that means 'partnering" private client services with the fixed income and equity divisions to eliminate turf wars, create more cross-selling, and get better pricing and execution for its clients. And Mr. Feigeles is willing to sell a variety of investment products, not just ones that Lehman produces.
"I feel strongly that our fiduciary responsibility to our customers is to give them the best (investments) in the world," Mr. Feigeles said, "not necessarily what we do best."
That doesn't mean, however, that brokers will forgo Lehman's own products, such as its merchant banking fund or the initial public offerings it brings to market. "We're a bulge-bracket firm. That enables our customer to have access to all trading pieces," Mr. Feigeles said.
Mr. Feigeles' role personifies the structural changes at Lehman, which currently manages $5 billion in private client assets. Previously the head of private client services reported directly to the company's chairman, giving the division a large degree of autonomy.
But today, the private client division is integrated with the entire global sales effort. For example, Mr. Feigeles reports to Stephen Lessing, director of global sales.
Lehman now cites 300 to 400 brokers as the optimal number to deal with the "highest echelon" of individual clients and institutions. It currently has 250 brokers in 15 officers around the world and Mr. Feigeles said he is budgeted to have 350 by the end of 1998.
That is a dip down from the 530 brokers Lehman employed in the summer of 1994, shortly after the firm spun off from Shearson and went public.
Mr. Feigeles said he has taken a hand-on approach to recruiting brokers. For instance, he set up an intern program with MBA students. Moreover, he said that because "we're all in this together," he is trying to foster a team approach. That should prove to be a weighty challenge.
"It's very difficult to get brokers focused on working in a team concept because the broker is truly an independent business person," said Perrin H. Long Jr., an independent brokerage-industry analyst in Darien, Conn.