U.S. Bancorp Investments, the brokerage affiliate of U.S. Bank, is reaping the benefits of a major makeover that began soon after William Benjamin joined the firm as its CEO almost five years ago.
The business morphed from an annuity and transaction-focused shop to one that thinks much more holistically about client needs. "The [product] mix today is much more broad and is aligned with what you would expect in terms of delivering comprehensive services to clients," Benjamin said in a recent interview.
The transformation resulted in sharp increase in fee-based business and revenue for USBI. "Our fee-based business is our fastest-growing business," Benjamin said. "We have added about $3 billion in fee-based assets over the past few years," noting that sales went up about 74%.
Benjamin went on an aggressive hiring and firing spree to refashion the business. He hired 460 advisors since the middle of 2009 as part of a strategy to grow business with mass-affluent investors with $100,000 to $3 million in investable assets. But he eliminated almost as many advisors as he hired. Today the unit employs 530 advisors, up from 480 when he joined U.S. Bank.
"The goal really was to give everyone a chance to become a lot more comprehensive in what they delivered to clients," he said. "We spent a lot of time training people to get them there, but if they wanted to stay transactional, that wasn't our vision. And so we focused more on more on people who wanted to deliver comprehensively to clients."
The advisors were trained in a new process and service approach that was advice-based and focused on planning. The advisors, for example, were provided with planning modules and were trained on how to leverage them, Benjamin said.
Benjamin joined U.S. Bank in July 2008 to grow the brokerage and insurance businesses and provide strategic direction and leadership across the bank's 24-state footprint. He was previously the co-head of the project office that reorganized UBS' wealth management business in the U.S.
The brokerage unit manages $110 billion of client assets, according to Benjamin. While it provides brokerage services to all wealth management units of the U.S. Bank, including ultra-high-net-worth and high-net-worth clients, most of the advisors work with the mass-affluent segment, which Benjamin says is the "core focus" of the business.
To promote the transition to an advice-based business and encourage cross-selling and partnering with other groups within the bank, USBI changed advisors' compensation system to include quarterly bonuses based on referrals they make to bank partners, such as mortgage and private bankers.
"Our partners are referring to us ... and we're incenting our FAs to refer to partners," Benjamin said.