Contango Capital Advisors, the wealth management subsidiary of Salt Lake City-based Zions Bancorp, is ready for a growth spurt.
We could be 10 times the size we are today within five to seven years, said Contangos COO Julie Castle of the firms projected assets under management in a recent telephone interview.
Castle, who will assume leadership of the business from the current CEO George Feiger on June 3, expects to do more than grow the firms AUM, which today stands at nearly $4 billion. She aims to increase its profitability and boost its contribution to Zions bottom line. She also wants to improve the firms penetration of Zions banking clients, which she says is a lot lower than it should be.
Its in very good hands, Feiger said of the 10-year-old business he built from scratch and its successor. The former professor will return to his roots in academia upon his retirement from Contango. He will become the dean of Aston Business School at Aston University in Birmingham, England.
Feiger was upbeat about Contango and it upcoming transition to Castle, who is a well-regarded leader in the bank wealth management space. We have worked together very closely for the last couple of years, Feiger said in the joint interview with Castle. Its been a pretty clearly worked-through process, and I dont see any discontinuities.
Ever since Castle joined Contango as chief operating officer two years ago, she and Feiger and the leadership team have been prepping the business for its second growth phase. They developed a goal statement and strategy for the firm and defined the target market as clients doing business with the bank, with the sweet spot being those with $1 million to $10 million in investable assets. Zions has a heavy concentration of small business ownersmany of them owners of family- and multigenerational-family-owned businessesas customers, said Castle.
With a goal statement in hand and a clear picture of the firms target client, Castle was able to begin the process of culling businesses that did not fit Contangos new strategic focus. Contango, for example, discontinued the family office business because ultra high-net-worth families were not customers of the bank, Castle explained.
In addition to rationalizing the business, Castle spent a great deal of time and effort tackling the issue of integrating the wealth management group into Zions. The banks organizational structure made it particularly challenging as it owns eight bank affiliates, each operating under different names.
Organizationally, its a challenge, said Sophie Schmitt, an analyst with independent research firm Aite Group. She noted that interacting with eight different banks and eight bank executives was much more difficult than interacting with just one.
The banks culture further complicated matters, added James Abbott, director of investor relations at Zions. It was a significant cultural shift for bankers to start thinking about wealth management products and services when for years or decades they hadnt done so, he said.
While Castle admitted that bringing banks closer together in terms of their connection to wealth management was her biggest challenge, it wasnt anything she didnt expect. Ive been in the business about 30 years and Ive seen a lot of things over that period of time, she said. I wasnt surprised by the need to continue our efforts to integrate the bankers and the advisors and to build those partnerships.
Prior to joining Contango, Castle oversaw the Wealth Management Division of First Interstate BancSystem in Billings, Mont. Her 30 years in the business included senior level posts in the Premier Banking & Investments unit of Bank of Americas Global Wealth and Investment Management Division, where she encountered the same integration issues shes now facing at Zions, according to Aite Groups Schmitt.
Shes a great leader who is well used to working with bank management culture, Schmitt said of Castle.
To bring bankers and advisors closer together, Castle oversaw structural realignments that made wealth advisors part of the banks leadership structure, which they were not in the past. In addition, Contango held many training, client review and partnering sessions to encourage the integration Castle was striving to foster. In a typical partnering session, advisors would be grouped with commercial and private bankers and other bank professionals to brainstorm how they can more fully serve their clients.
Now within an affiliate, you have a team thats all integrated, so that the wealth people and the bank people are working together on a day-to-day basis. Theyre vested in one anothers success or failure, and thats really helped us to get some terrific traction in the wealth management business in the last couple of years, Castle said.