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," says Contango's COO Julie Castle of the firm's projected assets under management.
Castle, who will assume leadership of the business from the current CEO George Feiger on June 3, expects to do more than grow the firm's 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 firm's penetration of Zions' banking clients, which she says is "a lot lower than it should be."
"It's in very good hands," Feiger says 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, a well-regarded leader in the bank wealth management space. "We have worked together very closely for the last couple of years," Feiger says in a joint interview with Castle. "It's been a pretty clearly worked-through process, and I don't 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 owners-many of them owners of family- and multigenerational family-owned businesses-as customers, says Castle.
With a goal statement in hand and a clear picture of the firm's target client, Castle was able to begin the process of culling businesses that did not fit Contango's new strategic focus. Contango, for example, discontinued the family-office business because ultrahigh-net-worth families were not customers of the bank, Castle said.
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 bank's organizational structure made it particularly challenging as it owns eight bank affiliates, each operating under different names.
"Organizationally, it's a challenge," says 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 bank's culture further complicated matters, adds 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 hadn't done so," he notes.
While Castle admits that "bringing banks closer together in terms of their connection to wealth management" was her biggest challenge, it wasn't anything she didn't expect. "I've been in the business about 30 years and I've seen a lot of things over that period of time," she says. "I wasn't 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 America's Global Wealth and Investment Management Division, where she encountered the same integration issues she's now facing at Zions, according to Aite Group's Schmitt.
"She's a great leader who is well used to working with bank management culture," Schmitt says of Castle.
To bring bankers and advisors closer together, Castle oversaw structural realignments that made wealth advisors part of the bank's 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 that's all integrated so that the wealth people and the bank people are working closely together on a day-to-day basis. They're vested in one another's success or failure, and that has really helped us to get some terrific traction in the wealth management business in the last couple of years," Castle observes.