Regions Bank is building its new brokerage unit almost as fast as Chinese real estate developers are putting up skyscrapers. Since it began building the unit earlier this year, the Birmingham, Ala.-based bank already has hired 102 financial consultants and is aiming for 125 by year-end. Its ultimate goal is to build an advisor force of 160 to 170 by the end of 2014.
Our recruiting is a good bit ahead of pace, said Jim Nonnengard, head of Regions Investment Services, one of four divisions that make up the Regions Wealth Management Group.
Regionsrapid pace of hiring and expedited build-out of investment services are due in part to its partnership with Cetera Financial Institutions, the third-party marketer that it selected to help build and support the business, said Nonnengard.
The new unit is not a rebuild of Morgan Keegan, which Regions sold to Raymond James in a highly-publicized deal last year. It is an entirely different business, Nonnengard said.
The new brokerage unit focuses on the needs of the mass affluent consumer, unlike Morgan Keegan, which catered to high-net-worth clientele. Another significant difference: advisors in the new program work in branches, whereas Morgan Keegan advisors by and large did not, according to Nonnengard.
Theyre giving the mass affluent more direct contact with advisors, Sophie Schmitt, an analyst with independent research firm Aite Group, said of Regions new investment services unit.
Most significantly, the new unit, unlike Morgan Keegan, is integrated into the bank, so much so that Regions consumer bankers helped interview candidates for advisor positions and referred people who were eventually hired for the jobs.
We are integrated as part of doing business at Regions, said Nonnengard. We are not an accommodation. We are part of what happens in the branch at Regions.
The new mentality is driven from the top. Scott Peters, a former Fidelity executive who heads up Regions consumer banking division, understands the importance of brokerage and banking units working together to bring a richer gamut of services to clients, Nonnengard said. He gets it, he said, referring to Peters.
The fact that the unit is integrated has been a huge draw in the recruitment of advisors. What tipped the scale for them [advisors] is the integration and partnership we have with the consumer bank, Nonnengard said. The consumer banker looks at the financial advisor as someone who can help retain customers and someone who can help them grow the customer base and cross-sell within Regions. That kind of attitude, he went on, is the gold standard for advisors, more so than the banks deposit base and even compensation.
Another big draw is the generous size of the territories that Regions is offering advisors. Regions has been able to nab several advisors from mature bank programs because they werent getting many branches or getting the deposit base, Nonnengard said.
Regions referral program and world-class trading systems and products and services are other reasons that have lured advisors to Regions not only from competing bank programs but from broker-dealers, independents and planning firms, Nonnengard said.
Less competition for talent in the mass-affluent segment has likely worked to Regions advantage, observed Aite Groups Schmitt. Its easier to find advisors in that segment than in high-net-worth space, she said.
Schmitt noted that banks in the mass-affluent market have a good chance of picking up advisors from the wirehouses as they tend to shed advisors annually. Advisors who didnt make it in the wirehouses are available and probably more willing to work with lower-end clients, Schmitt said.
Still, competition for advisors remains a top concern for many banks, said Catherine Bonneau, president and CEO of Cetera. Many firms are struggling right now in moving talent, but Regions has bucked the industry trend, she said. We hit the market at a right time, and so while many other firms are significantly behind their recruiting goals, with Regions help and other work that were doing with some of our other programs, were actually ahead of our plan.
Regions has received close to 1,000 applications, according to Nonnengard. It has relied primarily on word-of-mouth to recruit advisors, as well as Ceteras and its own website.
Even at its rapid hiring pace, Regions still has quite a way to go. We now cover about 640 of the 1,500 Regions branches, so were not even half covered at Regions at this point, Nonnengard said.