The head of UMB Financial Corp.'s asset management arm says he hopes to develop assets by breaking down its silo structures and selling advice rather than products to its customers.
Joe Gazzoli, who joined UMB from TIAA-CREF in January 2004 to run the asset management business, said the Kansas City, Mo., banking company wants to focus on delivering solutions. The brokerage services unit, UMB Scout Brokerage Services, and the private-client services division were trying to reach the same customers, he said, so from an operations perspective, merging the two made sense, and the bank announced last week it was doing so.
UMB also hired an executive from J.P. Morgan Asset Management to lead the new unit.
"We have been organized this way for some time, with brokerage separate from private-client services," Mr. Gazzoli said, and "we were going to the wealth market in a really fractured way. We want to approach our wealthy customers in a seamless manner."
Analysts said most regional banks have found that the only way they can compete with larger players for a bigger share of customers' wallets is with a more focused, open architecture approach.
"Customers don't want to be reached at five or six times by an organization," said Burton Greenwald, an analyst at BJ Greenwald Associates in Philadelphia. "At the end of the day, the biggest advantage midsize banks have is their proximity to their customers. They have to become the adviser of choice who can offer a lot of options."
Mr. Gazzoli said UMB offers a mix of proprietary and nonproprietary investment products, including its Scout Funds. The new unit will focus on becoming a wealth manager rather than just a product provider, he said.
"We are working to understand our clients' needs and objectives and finding the right solution for them," he said.
Analysts said they saw an expense-cutting motivation for the combination of the UMB Asset Management units, but Mr. Gazzoli disagreed.
"This is not about reducing staff or expenses," he said. "We want to provide the best services that we can provide. As the business grows, we hope to add staff."
Indeed, the $7.9 billion-asset company has added DeAnna Basler to be the executive vice president of private-client services and president and chief executive officer of UMB Scout Brokerage Services.
Ms. Basler was a managing director and had national account management responsibility in the broker-dealer division at J.P. Morgan Asset Management in New York.
Mr. Gazzoli said UMB wants to provide asset management services to customers of the bank "from emerging wealth all the way to family wealth." Merging the brokerage and private-client units can improve UMB's existing relationships and create new ones, he said.
"We want to be one UMB to our clients," he said. "By putting these together we can do more for our clients and help in a wide variety of ways."
Mr. Gazzoli said he plans to focus on heightening UMB Asset Management's profile with the bank's customers. UMB's banks in Colorado, Kansas, Missouri, Nebraska, and Oklahoma have 153 branches in all. The company is Missouri's second-largest, trailing only $14.2 billion-asset Commerce Bancshares Inc., also in Kansas City.
In April 2004, UMB opened a loan office in Phoenix in an attempt to move into new markets, but the company has focused on improving performance in its existing markets since J. Mariner Kemper was promoted in May 2004 to chairman and chief executive officer.
Mr. Gazzoli said the initial focus would remain on UMB's customer base. The company had $8 billion of assets under management at July 31, up from $7.2 billion the year earlier.
"For the near term, our focus is on the UMB footprint," he said. "Specifically, we are focused on Kansas City, St. Louis, Denver, and Phoenix. But I think there are areas beyond the footprint we hope to explore eventually."
