Birmingham, Alabama-based Regions Bank has contracted PrimeVest Financial Services to provide investment and financial advisory services to customers in the 16 states in which it does business, the bank announced today. The agreement with PrimeVest will help the bank fill the service gap that was left after it sold its brokerage unit, Morgan Keegan, to Raymond James earlier this year.
Through the agreement, Regions Bank customers will have access to a full range of financial advisory services provided by licensed financial consultants based in Regions Bank branches. The services include managed accounts, mutual funds, annuities, insurance, and financial and retirement planning tools, the bank said.
The agreement gives Regions Bank the opportunity to keep its mass market and mass-affluent customers with the bank, said Jim Nonnengard, executive vice president for Regions Investment Services, in a telephone interview. The other pieces in the banks wealth continuum namely trust and private banking services for wealthy customers have always been in place, he explained.
Choosing PrimeVest allows Regions to expedite our investment offerings for mass market customers and deliver financial planning services under the Regions brand that our customers know and trust, Nonnengard said.
Sophie Schmitt, a senior analyst with research and advisory firm Aite Group, concurred that without an in-house broker-dealer, the bank had no investment advisory option for customers who walked into the branches, creating a hole in the banks mass-affluent strategy.
The program, which will be private labeled under the Regions Investment Solutions brand, will begin to be implemented in 2013 in select bank branches.
The announcement comes on the heels of a major reorganization in September of the banks wealth management group, which brought all of the banks investment-related businesses under one roof.
Regions Bank opted to go with the third-party marketing firm, rather than build its own broker-dealer operation, because its compliance, due diligence and other back-shop services had gone to Raymond James as part of the Morgan Keegan sale in April. It made sense to strike an agreement with PrimeVest because of the firms speed-to-market and its experience in working with more than 500 banks, said Nonnengard.
Regions is uniquely positioned to create the program of the future and be customers trusted financial guide, said PrimeVest President and CEO Catherine Bonneau. By working with PrimeVest, they can focus on building a high-performance, service-oriented team while leaving the broker-dealer operations to us.
Bonneau believes the win may herald the start of a trend within the industry. The greater costs of compliance may well generate interest from regional institutions that historically would have done it on their own, she said, noting that Zions Bancorp, a regional bank based in Salt Lake City, also engaged PrimeVest as its third-party marketer earlier this year.
Schmitt agreed. In this environment, building entire businesses seems cost prohibitive. It makes sense to partner with a third-party marketer, she said.
Schmitt added that having a third-party marketer puts Regions Financial on a more equal footing with other banks in the space, such as SunTrust, which does have brokerage operations.
Regions Bank is actively recruiting financial consultants and plans to hire up to 100 consultants by the end of 2013. Job openings will be posted on PrimeVests career opportunities website in the coming weeks.
Regions Bank is a subsidiary of Regions Financial Corporation, a bank holding company with $122 billion in assets.