As banking companies expand their asset management businesses, some are feeling more comfortable giving them the parent companys brand name or something similar.
Also last week, Wachovia Corp. renamed the unit it formed in a similar merger late last year. But of the three, only Mellon and PNC gave their own names to the new, combined units.
Their doing so contradicts the conventional wisdom that people generally do not want to give their investment business to banking companies, according to W. Christopher Maxwell, the managing partner of Conestoga Capital Advisors in Philadelphia.
But some analysts said that the far-reaching changes Mellon and Wachovia went through last year made it an opportune time to reevaluate their branding strategies.
Bryan Garlock, an executive vice president of PNC Advisors which said last week that it had combined its investment advisory, trust, financial planning, and private-client business into a single group said the parent PNC Financial Services Group Inc. does not want to distance its asset management business.
"When we see competitors brand separately, its usually because they want to focus singularly on investment management," Garlock said. "Were not looking to position [the wealth management group] solely as an investment manager, but as one of many services."
PNC is also making substantive changes to the business. It plans to hire a few wealth managers and is installing software to help planners map out a clients goals and risk tolerance. Garlock said he hopes that the unit will grow 30% this year.
Last week Mellon combined its asset management, private banking, and private mortgage divisions into a single unit, Mellon Private Wealth Management. It kept its Dreyfus Corp. separate, under its own brand name and with its own asset management services.
A spokesman pointed out that the Mellon brand was already closely associated with wealth management. "Dreyfus is a powerful name, but Mellon has been in wealth management for 130 years," the spokesman said.
Mellon is also a special case in that it has changed from a traditional banking company to an asset manager. Last year the Pittsburgh company sold its retail and small-business banking divisions to Royal Bank of Scotlands Citizens Financial Group in Providence, R.I. The last remnant of Mellons retail banking division was the private banking unit, which has now been folded into the wealth management unit, the spokesman said.
Wachovia went with Evergreen, its well-known investment brand, for its newly merged wealth-management unit.
First Union bought Wachovia last summer and took its name. Late last year Evergreen Investments of Richmond, Va., the old Wachovias mutual fund subsidiary, absorbed First Union Investment Advisors Group.
Last week that units old First Investment Advisors which had been First Union Corp.s wealth management group was renamed Evergreen Private Asset Management.
The newly merged Evergreen Investments manages $217 billion of assets, said Dennis Ferro, its chief investment officer.
Maxwell said that there is no single right way to brand a banking companys asset management business. However, PNCs decision to stick with its own name instead of using that of BlackRock Inc., its mutual fund subsidiary, is surprising, he said, since "PNC does not have a noteworthy investment name."
William Whitt, the practice manager at VIP Forum, a financial research and consulting firm focused on wealth management, said most banking companies use mergers and divestitures to rethink their branding strategies. However: "what makes sense for one bank doesnt necessarily make sense for another," Whitt said.
Indeed, Wachovias decision to brand First Unions wealth management group Evergreen is puzzling, said Geoff Bobroff, a Providence, R.I., mutual fund analyst, since Wachovia is considered a strong name in the high-net-worth business.
Maxwell said that how a banking company ultimately markets its asset management subsidiary does not change the fact that wealth management services are generally difficult to mass-market. These products and services are by their nature private, he said, and a company is going to rely much more on networking than advertising to get clients.
Garlock said his unit is adept at that kind of networking, working with many attorneys and consultants through direct mail, seminars and other means.
As of Sept. 30, PNC Advisers managed about $58 billion of assets for 320,000 clients, he said.