Ameriprise Financial expects around $18 billion to move onto its balance sheet later this year under a new agreement to take over management of Comerica Bank's broker-dealer client assets.
Minneapolis-based Ameriprise
Comerica's wealth management division, with a team of nearly 800, manages approximately $195 billion in assets, of which $18 billion are managed by the securities business and will come under Ameriprise management. Ameriprise will have custody of Comerica's broker-dealer assets, an Ameriprise spokesperson confirmed in an email. Comerica Securities is the bank's broker-dealer subsidiary, according to a press release.
The move underscores the growing trend of big banks outsourcing certain wealth management business functions to industry firms with more sophisticated, specialized services. Players like Ameriprise, with resources at the ready, stand to benefit from this trend as they take over the client assets in question, while bank advisors benefit from offering better service to clients.
A Comerica spokesperson said in an email that the Comerica financial advisors would remain Comerica employees. But in wealth management, this is often seen as a form of recruiting, in which advisors transition from the bank's platforms to use the brokerage and RIA services of the new firm. With similar mega-recruiting moves in this vein,
For Ameriprise, the Comerica additions could be the largest yet of this kind and possibly the largest group of advisors recruited at one go. The firm did not respond immediately to a question asking to confirm if this was the case.
"Comerica and certain affiliates will transition support of specific insurance, brokerage and investment advisory activities currently conducted by Comerica's broker-dealer subsidiary to the Ameriprise Financial Institutions Group," the firms said in a joint statement.
Jay McAnelly, the group vice president at Ameriprise Financial Institutions Group, said in an interview that "as one of the larger banks in the county, Comerica Bank owns and operates a broker-dealer today." He added that many larger financial institutions own a broker-dealer, including Bank of America, the parent of Merrill Wealth Management, and Wells Fargo.
"With technology advancement and the need to scale to offer an elevated client experience, many of the banks that own their own broker-dealer have been evaluating opportunities to see what a partnership can do versus continuing to run their own broker-dealer," McAnelly said.
McAnelly's Ameriprise Financial Institutions Group program has positioned itself to take advantage of opportunities to profit from banks wanting a better edge in client experience, without the hassle and expense of doing the work themselves to keep up with the competition.
"I believe the trend of these type of partnerships will continue," McAnelly said. "Banks and credit unions are seeking to enhance their client experience and increase scale, efficiency, and cost savings."
McAnelly said his goal going forward was to pursue more partnerships of this nature — "as many as possible" — although he declined to state how many, adding that while he didn't have a specific number in mind, he was looking for openings among "the best financial institutions looking to elevate their program."
"We have capacity based on our size to expand in this market meaningfully," he said, noting that "there's not many competitors that are in this business, especially now that are of the size of Ameriprise."
As one of the largest regional firms in the country, Ameriprise invests heavily in client and advisor technology, advisor recruiting and resources for advisors to grow their practices. McAnelly said his firm offers customized dashboards, reporting, compliance, "support end-to-end and a lot of other functionality of integration to bring their programs life within their financial institutions."
"We have designed some proprietary software dashboards. coaching programs, service that we provide our institutions that they find very compelling, that allows them to run their programs," he said.
The transaction is expected to close by the end of 2022. While the joint statement called the move a "transaction," a person familiar with the matter confirmed in an interview that the assets would come off Comerica's balance sheet.
Asked how many firms had been considered for the opportunity and for terms of the deal, a Comerica spokesperson declined to comment.
