A wealth executive at a Tacoma, Wash., banking company said he has begun recruiting financial advisers from the troubled Washington Mutual Inc., and a Boston financial services company says one of its Seattle-area unit has picked up clients from Wamu.
Dean McSweeney, a senior vice president at Columbia State Bank of Tacoma, said the mortgage crisis that plagues Washington Mutual, the big Seattle thrift, could create opportunities for his $3.2 billion-asset bank's wealth management program, CB Financial Services, to hire experienced advisers.
"There is a disruption in our market," he said, "and we are in discussion with folks that may be interested in leaving an institution because of some of the unrest that that institution is facing right now, and they might be interested in joining our company."
Mr. McSweeney, who runs CB Financial Services, said he expects to add "several" financial advisers in the next 12 months to his team of seven advisers. "Washington Mutual has a large presence in our footprint, and there are going to be opportunities for Wamu's advisers that are looking for a change right now," he said.
Catharine Sheehan, a spokeswoman for Boston Private Financial Holdings Inc., which owns two Pacific Northwest affiliates — Charter Financial Corp. and Coldstream Capital Management, both in Bellevue, Wash. — said that Charter has picked up three clients from Washington Mutual and a lot of "buzz" exists among high-net-worth clients in the Seattle area concerning Wamu.
"I think it is probably the beginning of a lot of activity out there," she said. "People want to go somewhere where they can get some stability. Everyone is looking for stability right now."
Analysts said they expect other banks have already put out feelers to Wamu's advisers.
Catherine M. Bonneau, the president of PrimeVest Financial Services, a unit of ING Group NV that provides investment products and services for banks including Columbia State, said the market disruption will create hiring opportunities for banks.
"Regardless of where someone has been in the industry, this could be an ideal time to join an investment program at a financial institution because of the natural referrals, the support of a bank environment, and the stability of being with a community-based institution," she said. "We see reps from everywhere — from other bank programs, insurance and independent broker-dealers, and even wire house representatives finding success within the financial institution channel."
Mr. McSweeney said he has found interest from "more mature financial consultants" who want to join a company taking a fee-based approach to wealth management.
Six years ago when Mr. McSweeney joined Columbia State Bank, he adopted an advisory-based approach to serve high-net-worth customers. Rather than pushing products, Columbia offers wealthy investors in Washington and Oregon the opportunity to create a financial plan with an adviser. These clients must have at least $500,000 of investable assets.
Columbia's wealth platform has grown 71.4%, to $300 million, in the past six years by taking a more "holistic" wealth management approach, Mr. McSweeney said.
He said he expects "significant" growth during the next three to five years as it adds advisers.
Ms. Bonneau said, "The trend toward fee-based advisory services is not new, and banks, specifically community banks, are a little late to the game, but suddenly the message has caught on."
Growth has been "extraordinary," she said, among smaller banks interested in using the Minneapolis firm's platform. "The demand for training and converting bank reps into advisers and the need to offer a more sophisticated investment platform is overwhelming. … Banks want to be able to take a more holistic look at their customers, and fee-based advisory services are a perfect fit."
PrimeVest is looking to enhance its service menu, Ms. Bonneau said. For example, to deal with the liquidity crisis, it has introduced a money-market-like savings product that will offer expanded FDIC coverage to wealthy clients.
PrimeVest's FlexInsured Accounts let clients with large cash balances receive FDIC protection by sweeping assets into FDIC-insured money market accounts at multiple banks. Typically, the FDIC protects the first $100,000 of deposits in a bank account, but more can be insured if assets are spread across multiple banks.
Ms. Bonneau said PrimeVest has established relationships with more than 60 banking companies into which it can sweep cash. The product has been in development for two-and-a-half years, and PrimeVest began beta-testing it with a select group of banking customers this month. It will be available to all 600 of PrimeVest's bank customers in the next few months.
"Eleven banks have collapsed this year already, and there is client concern out there," she said. "There is a lot of interest in FDIC insurance. People want to be sure that their wealth is protected during turbulent times."
