Union Bank of California, a subsidiary of San Francisco's UnionBanCal Corp., says the recent realignment of its wealth management business is meant to prompt double-digit growth of assets under management.
To achieve this growth, the company will consider making acquisitions, but it also plans to go after specific wealthy "niches" organically, including professionals, executives, and business owners.
"We want to meaningfully grow our assets under management subsidiaries, but really we want to do more than that," Johannes Worsoe, a senior executive vice president and the head of its global markets division, said during an interview last week. "We want to own the client. We want to be there to provide banking, trust services, asset management services, and brokerage solutions."
The $55.7 billion-asset UnionBanCal, which is mostly owned by Mitsubishi UFJ Financial Group Inc., announced last week that it folded its wealth management business into its global markets group, which also houses the company's asset management and brokerage units.
Mr. Worsoe said the realignment can help UnionBanCal develop market share among wealthy clients in California, Oregon, and Washington. The company wants to become the "primary financial services provider" for its affluent and high-net-worth customers.
"In our view, if we want to really dedicate ourselves to the wealth management market, we really have to put all the pieces together," he said. "We have to break down the walls and operate as a team, from the client-facing advisers all the way up to the executive offices."
As a result of the realignment, Mary Curran, a UnionBanCal executive vice president and the head of its wealth management group, will report to Mr. Worsoe. His management team also includes Earle Malm, the chief executive of its asset management arm, HighMark Capital Management; Steven Short, the CEO of the investment brokerage subsidiary, UnionBanc Investment Services LLC; and Michael Janes, the CEO of its insurance subsidiary, UnionBanc Insurance Services Inc.
"Historically, banks have done a poor job at aligning themselves when it comes to wealth management," Mr. Worsoe said. "We have the ability to get it right now."
Like others in the industry, UnionBanCal has been relatively "fragmented" when it comes to wealth management, he said. Its asset and investment management businesses have existed for more than 20 years but have not gained significant share in California and the Pacific Northwest.
"We have done a pretty good job, but we can do a much better job by putting everyone on the same team," Mr. Worsoe said.
Union Bank has 330 branches in California, Oregon, and Washington. He said he is confident that wealth management "is one of the businesses that we really can grow [by] double digits, despite the market volatility."
Analysts said that UnionBanCal is trying to keep up with other financial services companies, including Wells Fargo & Co. and Wachovia Corp., that are developing their wealth management services to capitalize on the growing population of wealthy individuals in California.
Union Bank has 13 private banking and personal trust offices in California and the Pacific Northwest. Its HighMark unit has more than $21 billion of assets under management. (He would not disclose how much the company has in total assets under management or its specific market share.)
The decision to realign was "not defensive," but instead was "a totally offensive play," Mr. Worsoe said. "There are a lot of companies in California, and a lot more of them are coming in de novo. We have an advantage because we have deep, long-standing relationships here from the footprint we have spent decades developing. We have to do a better job of capturing our customers' private banking and wealth management businesses."
UnionBanCal also will use its traditional banking products to expand its relationships with wealthy customers, he said. "We have deep relationships in the bank on the commercial banking and retail banking sides, but now we have to leverage those relationships to develop our wealth management business. We will dedicate the necessary resources to make this happen."
The company wants to develop "specific niches" to target wealthy professionals, executives, and business owners.
"We already have clusters of wealthy clients spread out in our different business segments, but I think if we can develop these clusters into specific niches in different individually managed businesses we can grow in more meaningful way," he said.
"We want to do this organically, but we are also open to developing this through nonorganic means."
Other companies have used a similar strategy. SunTrust Banks Inc. of Atlanta has introduced units over the past five years that target doctors and lawyers, professional athletes, country music performers, and race car drivers. The units offer private banking, lending, and investment management services to each group.
Mr. Worsoe would not specify which niches UnionBanCal planned to target. But he did say that now that his company has conducted the realignment, the next step is to get the different arms to work as a team.
"We have a lot going for us here, but in order to effectively make it work, we have to refine how we interface with clients and make it all completely seamless," he said. "It sounds easier than it is. … But now that we all have our heads together on one team, we will knock down the walls and face the client with everything we have together."
