The new president of Fifth Third Bancorp’s investment advisory business says he expects the unit to expand its assets under management by deepening relationships with existing customers in its private-client group.
“There are so many opportunities with our clients within our existing footprint for us to generate some real revenue growth,” said David Pittman, who became president of Fifth Third Investment Advisors at the end of October.
The unit had $32 billion of assets under management at Sept. 30. And the private-client group, which targets people with more than $1 million of investable assets, managed about $20.2 billion. “The private-client group controls the biggest chunk of our business,” Mr. Pittman said, “and represents the greatest opportunity to grow rapidly.”
Mr. Pittman, 41, said the Cincinnati investment adviser wants to cross-sell asset management and lending products to its private banking customers. This would include using both proprietary and nonproprietary products, he said.
“We want to increase the pace of the adoption of an open architecture strategy here,” he said. “We have rolled out products on the brokerage side and expanded the number of managers we are working with.”
Though the company wants to continue developing an open architecture approach, Mr. Pittman said, there is no plan to divest its proprietary fund family, the Fifth Third Funds, which have $6.76 billion under management.
“Our goal is to grow our overall business,” he said. “In order to execute that, we need more people, and we need to bring additional contacts in each market.”
Mr. Pittman, who was an executive vice president and regional managing director in Wells Fargo & Co.’s Midwest region before being hired by Fifth Third, said the Cincinnati company wants to grow by expanding its capabilities in private banking and developing its open architecture platform.
“We are not going to be able to reach the kind of goals we have by exclusively growing with our internal clients, but we believe that there is a huge opportunity here,” he said. “These are wonderful, warm pieces of business from customers that have already selected Fifth Third. This is a great opportunity for us to capitalize on.”
Fifth Third also plans to increase planning as a tool to expand its access to customers. Jaleigh White, a senior vice president of wealth planning, said planning would be a crucial component of Fifth Third’s strategy for reaching customers.
The company has spent two years developing different planning platforms for each customer segment, she said, from mass-affluent to ultra-wealthy (those with more than $25 million of investable assets).
Ms. White said Fifth Third will roll out its financial planning strategy next year to all its customers. “We want to touch as many clients as possible,” she said. “This is really at the heart of our strategy to broaden the services we are offering to existing clients.”
Mr. Pittman said the company expects to aggressively increase assets under management in its private-client group. The $20.2 billion total at Sept. 30 was just a 1% increase from the $20 billion under management last Dec. 31.
“We have high expectations for growth throughout the Midwest from here,” he added. “We believe that the investment adviser group can be a real growth engine for organic growth and a real revenue driver for the company.”
