Five months after buying Jack White & Co., Waterhouse Securities will combine Jack White's Advisor Services division with the Waterhouse Investment Adviser Services unit. The two will officially join on January 1, 1999 and be known as Waterhouse Institutional Services.
The new division will have offices in both San Diego and New York. Both units provide back office, technology and custody services to cater to independent financial advisers, a growing distribution channel for mutual funds.
Peter Mangan, formerly executive vice president of Jack White's mutual funds and institutional services unit, will become executive vice president of the newly combined division. He will remain in San Diego and report directly to John Chapel, president of Waterhouse Securities.
J. Thomas Bradley, who previously led Waterhouse's Investment Advisor Services division, will serve as managing director of retail investment products for Waterhouse Securities. Bradley will manage investment product distribution to retail investors.
The two firms have very similar cultures, Mangan said. But they bring complementary strengths to the advisory community. According to Mangan, Waterhouse has a great reputation for high quality servicing while Jack White brings technology and marketing savvy.
Waterhouse's investment advisory division currently services about 1,300 advisers. Jack White's unit provides services to an equal number, with an estimated five percent overlap, said Mangan.
Both firms also have their own proprietary software programs. Jack White's is AdvisorPath, Waterhouse's is Waterhouse Online for Advisers. The two programs will be merged into one and revised, Mangan said.
"Technology is the critical feature of the advisers' relationship with us," he said. "Creating an enhanced capability is vital."
It will also be important for the two firms to use the same clearing company in the future. Currently, Jack White clears through Pershing. Waterhouse clears through its subsidiary, National Investment Services Corp. (NISC). White's system will migrate to NISC in a conversion expected to be completed in March of 1999, Mangan said.
Once consolidated, the new unit will increase its conferences for advisers. Five conferences -- one national and four regional -- are planned for 1999. Topics to be discussed will include compliance and marketing.
Waterhouse is also considering introducing a referral program to pair advisers with individual investors who need guidance. It is also developing a managed assets network that will make institutional managers available to investors through separate accounts.