The Denver investment management firm, a subsidiary of Prudential PLC in London, is to be the preferred provider of separately managed accounts to 4,700 community and regional banks through ICBA Financial Services Corp., the trade groups broker/dealer.
Bill Reid, president of the community bankers asociation, said he expects 500 banks to begin offering Curians managed account platform.
"Many of our community banks don't have trust departments, or a trust department that is active, to take advantage of the trust powers that the bank has," he said. "Small banks are searching for a managed account product to effectively compete."
Curian, which was started in March, has developed a reputation as the first managed account provider to offer diversified managed accounts for a minimum investment of $25,000 at a time that most banks' investment arms required at least $100,000. Curian creates a stock portfolio for each investor. Each portfolio includes 10 to 20 style-specific money managers and typically holds positions in up to 500 securities.
The company, which says its average account is worth $300,000, distributes through broker/dealers, including some that distribute through banks.
Curian's fee-advance program lets financial professionals transfer from commission-based business to fee-based business more easily by paying fees up-front. This is a big incentive for small banks to initiate managed account programs, according to Curian, and more companies are offering fee-based products to banks.