While State Street Corp. is planning to eliminate 1,800 people, the firm is also looking to expand its back-office services beyond it existing customer base of seven. Hiring new people to achieve that growth is a possibility, executives of the firm said.
Meg McGrory Kelleher, a senior vice president and head of global business development and relationship management for the companys wealth manager services unit, said State Street serves seven financial company clients, including three in Canada and the United Kingdom.
- "This is a $27 trillion market that there is a lot of potential in," Kelleher said. "It is a very fragmented market, and a lot of customers are looking for these services. Everyone is under pressure from tightening profit margins. Fees are down; it is critical to manage expenses."
State Street Wealth Manager Service offers custody, performance and analytics, accounting, private-label statements, and tax services to wealth managers. The parent company has been supplying back- and middle-office services for 20 years. The unit, which has $70 billion of assets under custody, was started in 2001.
Kelleher said that in a bear market it is crucial for financial firms to outsource some things but stick to their strengths.
"Firms are trying to execute new strategies around maintaining their current client base," she said. "They want to attract more clients, but that requires new technology and new products. People want to create partnerships rather than investing capital to do it on their own."
Anne P. Tangen, an executive vice president and the division head of wealth manager services, said the unit is targeting mutual fund companies and other asset managers, banks, bank trust companies and regional broker/dealers. To build this scale, Tangen said. State Street will expand its business organically by hiring.
Last month, for example, State Streets managed account group hired Vincent J. Lepore from ING Investment Management as VP, global operations.