Some banking companies have abandoned proprietary investment products in the past several years, but Diane L. Thormodsgard, U.S. Bancorp's new head of wealth management, said she is committed to helping her company maintain its position as both a product manufacturer and distributor.
"We use open architecture, but our fund company is an important part and will remain an important part of our wealth management business," she said in an interview Wednesday.
Ms. Thormodsgard was named a vice chairman and the head of wealth management Monday. Before that had been the interim manager of wealth management since February, when Andrew Cecere was named the $219 billion-asset Minneapolis company's chief financial officer.
She said assets under management in its 49 proprietary First American Funds rose 17.9% from a year earlier, to $66 billion as of March 31.
"We have made investments in our funds, and we continue to invest in the fund family," she said.
U.S. Bancorp hired Frank Wheeler from Merrill Lynch & Co. to be the head of distribution for FAF Advisors. He will join the company April 30 and will work to increase fund distribution through third-party retail channels, including retirement plans.
Geoffrey Bobroff, an analyst at Bobroff Consulting in East Greenwich, R.I., said U.S. Bancorp's fund family is "large enough, but not too large," so the company can tread the middle ground between fund manufacturer and distributor.
"Other banks, like Wachovia and Bank of America, are doing the same thing as they try to maintain their proprietary products," he said.
As the head of wealth management, Ms. Thormodsgard, 56, will be in charge of corporate trust, institutional trust and custody, private asset management, trust technology, and support services, along with the private client group, U.S. Bancorp Fund Services LLC, U.S. Bancorp Investments, U.S. Bancorp Insurance Services LLC, First American Funds, and FAF Advisors.
She has worked at U.S. Bancorp since 1978. Before becoming the interim manager of wealth management, she had been the president of the corporate trust and institutional trust and custody services business, which offers retirement, custody, and investment services and health savings accounts to institutional clients.
As the president of the corporate trust business, Ms. Thormodsgard expanded it through a series of acquisitions over the past two years.
In November 2005, U.S. Bancorp bought Wachovia Corp.'s corporate trust unit. In September it completed its acquisition of SunTrust Banks Inc.'s municipal and corporate trust business; that purchase added $123 billion of assets under administration. In November, U.S. Bancorp acquired an additional $30 billion of assets under administration when it bought the municipal bond trust business of ABN Amro Holding NV's LaSalle Bank Corp. in Chicago.
Ms. Thormodsgard will report to Richard K. Davis, the president and chief executive officer of U.S. Bancorp, and will be a member of the parent company's management committee. She said it is still too early for her to determine what role acquisitions will play in expanding the wealth management business.
"In our other businesses, we made significant acquisitions, but we also built those businesses by increasing sales to our existing customer base as well," she said.
Assets under management at U.S. Bancorp's wealth management business increased 13.9% from a year earlier, to $156 billion as of March 31. Ms. Thormodsgard said she is confident that her company can maintain that growth.
"We want to continue our growth and do the best we can to accelerate our position from there," she said.
