Uncertainty in Citizens Financial Group's wealth management arm since the British government's takeover of its parent, Royal Bank of Scotland Group PLC, was among the reasons a Rhode Island executive says he decided to leave the company to run a smaller book of business at a smaller New England rival.

"Citizens claims that wealth management is important, but if you look at the size of the wealth management business as compared to the scale of their enterprise, it is really tiny and insignificant," Kent W. Gladding said in an interview Tuesday. "It is not a secret that Royal Bank of Scotland is struggling with its balance sheet, and that forces you to ask the question, 'Are they really concerned with wealth management in the United States?' "

Gladding, who was a senior vice president and investment officer at Citizens, managed a portion of its investment division, which had $4.6 billion of assets under management. Washington Trust Wealth Management, a unit of Washington Trust Bancorp Inc. in Westerly, R.I., announced Monday that it had hired Gladding as a vice president and investment officer to oversee its investment portfolios, which have $3 billion under management.

"Washington Trust is extremely committed to wealth management," he said. "It is an extremely important part of their strategy, and right now that is important. Organizationally, Washington Trust is not in flux, and that is really important."

Mike Jones, a spokesman for Citizens, said that the company's wealth management business is expanding. It "plans to hire personnel that fit our customer service strategy and growth plans for this important business," he said in an interview Wednesday.

Providence, R.I.-based Citizens, which has about 500,000 wealth management customers, is in the process of making the hires this year, Jones said. The company plans to hire sales people and "senior" executives through this year and into next year, he said. The hirings will be a "significant investment that reflects the importance of this business to Citizens," he said.

The nationalization of Royal Bank of Scotland has not affected the Citizens wealth management business at all, Jones said.

Analysts said that Gladding is not alone. Wealth management executives at several large New England banking companies that are owned by foreign banks have left or are considering leaving for more stable companies, they said.

Executives like Gladding are worried, the analysts said, because some foreign-owned companies are already in the process of selling U.S. wealth management units. For example, Barclays PLC is in exclusive talks to sell its U.S. exchange-traded fund business, iShares, to CVC Capital Partners Ltd.

Geoffrey Bobroff, an analyst at Bobroff Consulting in East Greenwich, R.I., noted that two of Rhode Island's largest banks — Citizens and Sovereign Bancorp — are owned by foreign banks — Royal Bank of Scotland and Banco Santander SA, respectively — and "both are rethinking their wealth management models."

"It is easy to understand why someone would be inclined to leave when there is so much uncertainty right now," Bobroff said. "There are a lot of questions as to whether large banks, especially large, foreign-owned banks, are willing to provide the level of support that advisers need to retain and attract wealthy clients."

Gladding agreed.

"Bigger banks want to offer cookie-cutter products and services, and they are raising the threshold in order for customers to get truly individualized attention," he said. "That is going to alienate customers, and you are going to see customers and executives looking for alternatives."

Bobroff said that Rhode Island residents are interested in patronizing a banking company like Washington Trust because of its local presence.

Gladding, who is to be based in Washington Trust's Providence office, said he is confident that Washington Trust can increase its market share in New England by continuing to target ultra-wealthy individual investors.

Washington Trust plans to add a mid-cap investment portfolio to go with its multi-cap portfolio, Gladding said.

The company is also interested in adopting an open architecture model to offer nonproprietary investment products along with its proprietary offerings, he said.

"I think we can be a key alternative for clients in this market," he said. "The really big national banks want everyone in a model. They want to cut down the interactions between portfolio managers and clients. A lot of banks are expecting affluent folks to deal with an 800 number, and that is turning off these clients."

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