BNY Mellon ripe for wealth management expansion

Thriving unit plans to add 100 workers to operation by end of 2014; largest staff hike under new CEO
FEB 25, 2013
Bank of New York Mellon Corp., the world's largest custody bank, is hiring as many as 100 people in its wealth-management unit as it seeks to counter lackluster earnings in other businesses. BNY Mellon Wealth Management will increase its sales force by 50 percent to about 150 people by the end of 2014, according to a statement to be released today. The New York-based company also plans to add 10 private bankers and mortgage bankers combined, plus additional support staff and portfolio managers. “The company is supporting a business which is doing well,” Lawrence Hughes, the unit's chief executive officer, said in a telephone interview. “It's an opportunity for me to get more people in the markets where wealthy people are.” Banks including BNY Mellon, JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS) have focused on wealthy clients since the 2008 financial crisis after new regulations reduced revenues from investment banking and trading. Managing money for high-net-worth investors offers the potential for steadier fees and the chance to take market share in an expanding business. Growth in the investment and asset-management industries over the next decade is expected to come from individual consumers rather than institutions, said Hughes, who is based in Boston. More new wealth is being created as the economy strengthens and BNY Mellon is investing in its unit to capture those assets, he said. Revenue Decline Custody banks such as BNY Mellon have been hurt by interest rates that have hovered near zero since December 2008, which force them to waive fees on money funds, hold down revenues from securities lending and cut yields on their investment portfolios. Revenue at BNY Mellon fell 1 percent in the first quarter to $3.6 billion from a year earlier, driven mainly by a 6 percent decline in net interest revenue, the company said in a statement last month. Fees for investment management and performance increased 10 percent year-over-year to $822 million as of March 31. (BK) The bank had $26.3 trillion in assets under custody and administration and $1.4 trillion in assets under management as of March 31. The wealth-management unit oversaw more than $188 billion at the end of the first quarter, the company reported. The hiring plan, which would represent the biggest staff increase in Hughes' three years as CEO, contrasts with BNY Mellon's job cuts in 2011 and its target to save as much as $700 million in costs by 2015. Finding Clients BNY Mellon shares rose 17 percent this year through yesterday, compared with a 29 percent gain for the Standard & Poor's Index of asset managers and custody banks. The wealth unit has expanded through acquisitions in the past. Its focus now is on adding staff and entering new markets to find clients such as retiring executives or those selling businesses, Hughes said. BNY Mellon Wealth Management has opened offices in cities including Dallas and Washington, and in the Cayman Islands, in the past two years. The unit has been studying what high-net-worth families seek from wealth advisers. Tracy Nickl, executive director of sales, co-wrote a report released May 1 that outlines how advisers can outperform peers and companies can acquire top talent. The hiring goal equals about 5 percent of the wealth unit's 1,900 employees and is already being implemented. Three people were hired for new sales positions in Southern California last week, Hughes said. --Bloomberg News--

Latest News

Advisor moves: Wells Fargo FiNet lands $580M Ameriprise team
Advisor moves: Wells Fargo FiNet lands $580M Ameriprise team

LPL Financial and Raymond James also add independent advisors from Osaic and Edward Jones in Michigan and Arizona.

M1 Advisor bets AI can serve clients wealth managers turn away
M1 Advisor bets AI can serve clients wealth managers turn away

The SEC-registered RIA advises on more than $1 billion in client assets, with no advisory fee through 2027 and no human financial advisors.

Wirehouses losing more advisors so far in 2026: Report
Wirehouses losing more advisors so far in 2026: Report

The four wirehouse firms lost 1,449 experienced advisors and recruited 932 in the first six months of the year, according to Diamond Consultants.

RIA moves: Merit, Hightower and Trilogy announce billion-dollar additions
RIA moves: Merit, Hightower and Trilogy announce billion-dollar additions

Merit's 10th Commonwealth addition deepens its Western New York reach, while another Hightower partner joins its Signature Wealth platform in Michigan.

SEC spares fund giants charges but warns on Exxon climate campaign
SEC spares fund giants charges but warns on Exxon climate campaign

Report on Climate Action 100+ signals risk for passive managers' 13G status heading into the 2027 proxy season.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor