Wilmington Trust knows exactly what it needs to do to grow its business: court the up-and-comers of tomorrow.
Fortunately, it now has the means to do so. The wealth advisor to some of the nations richest families is tapping the expansive commercial banking network of its new parent, M&T Bank, to connect with business owners and real estate developers, and it seems to be doing so to great effect.
Mark Graham, executive vice president of Wilmingtons Wealth Advisory group, estimates that roughly 60% to 65% of the firms growth is coming from privately held business owners, rather than its legacy, inherited, generational wealth clients.
Today we have an opportunity to grow that part of the business a lot more rapidly than we would have before because our banking footprint isnt just Delaware anymore, Graham said, referring to the firms acquisition by M&T Bank in May of 2011.
Before the merger, Wilmington had limited opportunities to gain business owners as clients because its commercial banking unit was small and confined to the Delaware market. We didnt have the support mechanism of a large commercial bank to basically go in and talk to a lot of commercial banking clients as future wealth clients, explained Bill Farrell, executive vice president and head of Wilmingtons Wealth and Institutional Services Division.
Now Wilmington has the commercial client base that it was looking for. M&T Bank has some 10,000 middle-market business owners and real estate developers as clients, making them great prospects for Wilmington. These clients, while very happy, never had an answer for how to deal with wealth management-related issues, such succession planning or how to sell their businesses, a service need that Wilmington is eager to fill, Graham noted. Were beginning to capture a bigger and bigger percentage of the wealth that sits in the clients of the bank, said Graham.
Nearly three years following the merger, Wilmington is beginning to take advantage of the opportunities presented by the union of the two organizations. In particular, Wilmingtons fee-based high-net-worth and ultra-high-net-worth businessalready strong prior to the mergeris picking up traction. We have in 2012 and 2013 had real big years in terms of not only retention of clients but a significant amount of client growth, said Graham.
Graham noted that last year the firms wealth advisory business grew about 8% but declined to say how much growth hes expecting going forward. Were pretty bullish as far as what we think the opportunity is for the business, said Farrell.
The merger of the two organizations came about amid much tumult in the market. Wilmington was pressured into selling itself to M&T Bank in the wake of the financial crisis. Notwithstanding the circumstances, the deal has been widely viewed as a good transaction, with each party complementing the others weaknesses. The acquisition allowed M&T bank to shore up its struggling wealth management business, while providing Wilmington with greater banking capabilities in a much wider footprint.
The integration of the two organizations, while challenging, has been moving along and making good progress, according to Farrell. While they worried about losing clients and staff before and immediately following the merger, those fears have slipped further and further into the rear-view mirror with each week and month that goes by, said Graham.
We retained the leadership and the client-facing staff that were important to our business pretty much without exception, Graham added.
Fortunately, there was not a lot of overlap in terms of types of clients and skill sets of staff, according to Graham. M&T Banks wealth management business focused primarily on the brokerage unit, which served mostly mass-affluent clients, while Wilmington Trust catered strictly to high-net-worth and ultra-high-net-worth clientele. With the Wilmington acquisition, M&T Bank was able to build out its business into the coveted high-net-worth and ultra-high-net-worth wealth management space. Wilmington, meanwhile, could now offer its clients greater banking capabilities in more places than it did before.
M&T Bank acknowledged the strength of Wilmingtons wealth advisory business. In a break from past practice, M&T Bank retained Wilmingtons brand name, the first time it kept the name of a company it acquired.
That in itself was a departure and speaks to what Wilmington Trust brings to the table, said Farrell.
M&T Banks wealth, corporate trust and retirement businesses were integrated into Wilmington, and its brokerage unit, which had hundreds of brokers, according to Farrell and Graham, moved under the Wilmington umbrella as M&T Securities.
As a result of the merger, Wilmington doubled the number of private client advisors serving wealthy clients to 50. Twenty-five professionals from M&T Bank joined Wilmingtons high-net-worth business, giving the high-margin fee-based wealth unit equal M&T Bank and Wilmington representation, an important factor in easing the integration of the organizations.
The cultures were more similar than dissimilar, Farrell said.
Wilmingtons wealth management division consists of four groups, with the wealth and institutional units the cornerstones of the business overall, producing some $500 million in revenue, said Farrell. In addition to the wealth and institutional units, the division has a brokerage unit (M&T Securities) and a property and casualty insurance business.
The ongoing integration of the two organizations is a top priority for Farrell. That doesnt happen overnight when bringing two businesses, two cultures together, he said.
Also high on his list of priorities is working with M&T Banks commercial bank and its clients to reel in new business and to grow not just within Delaware but nationally. But his biggest priorityaside from integrationis being back on offense after a period of time playing defense. From our perspective, it really is about being back on the offensive and growing these businesses, Farrell said.
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