After a little more than a year at the helm of Umpqua Bank's wealth management business, Kelly Johnson can point to some big accomplishments — but also to all the work he has left to do.
Johnson arrived in January 2009 to head the newly created wealth management business. Since then, the bank, a unit of Umpqua Holdings Corp., has created a private bank. And its retail brokerage unit has gone on a hiring spree that has helped bring in more than $1 billion of new assets under management. The wealth management division is now approaching $2 billion under management overall.
But Johnson, an executive vice president who was a senior managing director in Royal Bank of Canada's RBC Wealth Management unit, still must shepherd a new trust unit into existence. And he is to oversee an expansion of wealth management sites in Washington, Oregon and California.
The expansion, which is part of a two-year-old effort by Umpqua to enlarge its nontraditional business lines, could get the business to $10 billion of assets under management within five years, Johnson said in an interview last week. Umpqua's effort was begun in the midst of the financial crisis, he added, and has required building aggressively even in a time of market turmoil.
"At that time, frankly, there was panic in the streets," he said. "When there's panic, there's usually opportunity."
In August, Umpqua, a regional banking company in Portland, Ore., hired Donna Huntsman, who was previously an executive at Key Private Bank, to oversee development of the newly formed private bank. It sells tailored services and products to customers with more than $1 million of investable assets.
The next month, Umpqua reached a referral agreement with the financial advisers at Ferguson Wellman Capital Management. Under its terms, clients with at least $2 million of assets to invest are referred to Ferguson Wellman, which is in Portland. "That doesn't mean they will all go there," said Johnson. "What it does is give us an institutional product from a pricing standpoint."
Ferguson Wellman is an ideal fit for the institutional corporate trustee business that Umpqua is seeking, he added. The advisory firm, meanwhile, is to refer private banking prospects to Umpqua.
Because the bank has investment platforms available through its retail broker-dealer, Umpqua Investments, and Ferguson Wellman, its new trust and private bank units do not need investment platforms of their own, said Johnson.
Umpqua's wealth management hiring spree brought in 44 professionals, about 28 of them advisers who joined Umpqua Investments in the midst of turmoil in the brokerage industry. Before last July, Umpqua Investments was known as Strand Atkinson Williams & York, a brokerage company that the bank bought in 1999.
Asked to name a challenge to the growth of Umpqua wealth management, Johnson singled out the "war for talent" between his business and its rivals. "Because of our aggressive hiring last year, I do think we got a jump on many organizations," he said. "But I'd bet the war for talent is going to get a little stronger."
However, if competition for brokers does heat up again, it would probably center around those with the largest books of business, said Howard Diamond, managing director of Diamond Consultants, an executive search firm in Chester, N.J. If Umpqua and others limit themselves to advisers with annual commissions in the more modest $300,000 to $400,000 range, they should have less trouble recruiting, he said — provided they make respectable offers.
