Breaking with tradition, Wilmington Trust Corp. is turning to investment bankers and brokers for leads in the wealthy-client market.
The Delaware bank's personal trust and investment management groups have struck deals with New York-based investment banking giant Morgan Stanley Group Inc. and with Boca Raton, Fla.-based brokerage J.W. Charles Financial Services Inc. to generate referrals.
Under the alliances, signed this spring and implemented this summer, Morgan account managers and J.W. Charles brokers are presenting the bank's trust products and services to their wealthy clients. Wilmington, which has $32.8 billion in trust assets under management, seeks to open an actively managed account for the referred clients or to be named as a fiduciary to take care of future trust funds.
The deals essentially give Wilmington, a $5.4 billion-asset bank, access to the sales forces of other financial institutions.
"Domestically we have a sales force of 175 people, which gives Wilmington a lot more distribution horsepower than they would have just on their own," said David H. Blair, a Morgan Stanley managing director in its private client services group. "And, from our point of view, it gives us a fuller product line."
J.W. Charles has 650 brokers in its Florida, California, Georgia, New Jersey, and New York offices; they have been trained present Wilmington's services to their clients and recommend it as a fiduciary.
Wilmington's outreach to the brokerage community is similar to a program set up by Comerica Inc. to get referrals from PaineWebber Inc. The Detroit- based banking company commanded national attention when it linked arms with PaineWebber in November, the first deal of its kind between a bank and a brokerage.
If successful, these nascent client-sharing programs could change the way banks generate trust business.
"If one or two banks do this, it will be a more and more attractive to others," said Joseph B. Cartee, an attorney with Balch & Bingham, Birmingham, Ala. "What these banks are looking for is a synergy where they can create mutual benefits for each other without overly constraining themselves and competing with others."
The attorney added that bank-clients of his firm, intrigued by the Comerica-PaineWebber alliance, have made inquiries about the possibility of starting similar programs of their own.
"I take it Morgan Stanley is getting a nice fee for the referral, and the bank is getting a new customer that is going to generate fees," Mr. Cartee said.
Mr. Blair of Morgan Stanley said Wilmington's client base did not overlap his, so the alliance would not prove redundant or uncomfortable.
Morgan Stanley has a global institutional trust business of its own, and company executives looked at expanding its capability to include wealthy individuals. But Mr. Blair said they decided to work with Wilmington instead.
"There were already established providers of that business, so why not link up with them?" he said.