Since joining UMB Financial Corp. 12 months ago to develop its wealth management business, Clyde Wendel has given clients access to outside money managers and added a midcap fund to UMB's proprietary family.
But even splashier changes may be on the way.
The St. Louis company wants to double its $10.2 billion of assets under management within five years and triple them within a decade, and will probably have to make acquisitions to achieve those goals, Mr. Wendel said. "I doubt we can get there organically."
The $8 billion-asset UMB has its eye on private trust companies, banks with trust companies or asset management divisions, and mutual fund families. It could announce the first buyout deal in the second half of the year, said Mr. Wendel, who worked at Bank of America for 23 years before joining UMB.
UMB's asset management business is already on a roll, boasting brisk inflows into its UMB Scout Funds, for instance. The wealth management business generated $17.5 million of noninterest income in the first quarter, up 17% from a year earlier.
The no-load Scout family had net long-term inflows of $684 million last year; the flows and investment gains lifted assets under management in the funds to $5 billion at the end of 2006 from $3.5 billion a year earlier. Assets stood at $5.1 billion on March 31.
Some of the credit for that increase goes to the Scout Mid-Cap Fund, which was launched in November and now has $21.2 million of assets under management. The midcap fund is run by a team led by Patrick Dunkerley, the former chief investment officer and managing director of Victory Capital Management Inc., the asset management arm of KeyCorp.
Mr. Wendel, the president of UMB's asset management business and the managing director of its private banking unit, said UMB does not want to sell the fund complex, even though it is relatively small.
"I know we are committed to it for the long run," he said. "UMB is fiercely independent. We want to enhance and grow it." More funds could be in the offing. UMB is asking itself, "What other spaces do we need to fill?" Mr. Wendel said.
It tried to fill one space in October by partnering with Prudential Securities Inc. to launch its open architecture platform for funds and separately managed accounts. Assets within that platform stand at about $300 million, he said.
Peyton Green, senior analyst with First Horizon National Corp.'s FTN Midwest Research Securities Corp., said that using outside managers, something a growing number of banks have started doing, will help UMB modernize its wealth management business.
"In the past they would have used Scout funds or would have built a portfolio from their investment officers' recommendations," Mr. Green said. "They're now bringing that part of the business into the 21st century."
UMB has also done some reorganizing. In August it merged private banking services into its asset management division to streamline the customer experience for its high-net-worth clients.
In March, another Bank of America veteran, Dana Abraham, was promoted to executive vice president for investment and wealth management and private banking.
She oversees the bank's team of wealth advisers, who deliver financial planning, trust, and fiduciary products, and investment services.
"One of the challenges of today's marketplace," Mr. Wendel said, "is how to bring products and services to the high-net-worth marketplace and integrate a team around clients' needs."
Another change under Mr. Wendel is an updated fee schedule that went into effect in January. The fees on products from trust accounts, to investment management to custody fees were increased "in general," he said.
As for new products, Mr. Wendel said he hopes to offer what he calls "hard asset management" — investments in farm, ranch, oil, and gas properties. "There is demand for that, particularly in our footprint," he said.
