SMA provider and Mercer IC prepares compete for non-private-client assets. Third-party separately managed account (SMA) provider GlobalBridge has teamed with Mercer Investment Consulting to help trust banks compete for institutional assets in an initiative that GlobalBridge says can also help drive banks' wealth-management sales.

"Many of the issues that come into play in the institutional space apply equally to the high-net-worth segment," says GlobalBridge CEO Kelly Thomas Coughlin. "A trust bank that has developed its skills with respect to institutional investors will be that much more knowledgeable and impressive" to wealthy investors.

Another way

But GlobalBridge's new GlobalEdge institutional program is meant primarily to put middle-market banks in the running against larger players to help pension funds, foundations and endowments manage their assets -- much as SMA platforms are billed as ways for banks and other advisory channels to get hold of assets that might otherwise go to wirehouses and megabanks.

And it's clear that banks need help bringing in investment assets. 3C Financial Partners, a Los Angles-based investment bank and consulting firm, estimates that North American private banks and trust companies saw their share of professionally managed high-net-worth assets slide from 86% to 38% in the 10 years through 2004 -- a period that saw an approximate doubling of global high-net-worth assets.

"This situation is due in large part to banks' sole reliance on only two of the four essential 'p's in the marketing arsenal: 'price' and 'place,'" says Coughlin. "With GlobalBridge's open architecture SMA, bank trust advisors get the 'product' they need to compete. GlobalEdge, gives them the final 'p': enhanced 'promotion,' the most critical tool" to compete successfully. It does that, Coughlin says, by helping "trust banks leverage their local community presence, wealth management expertise and pricing advantage to attract and win institutional clients."

GlobalEdge works directly with institutional managers, consultants and investors to help banks understand request-for-proposal (RFP) criteria, including information on how individual institutions review and select advisors. GlobalBridge and Mercer work with bank advisors to sharpen their RFP and presentation skills and to make them familiar with multi-manager investment strategies and approaches to asset-and-liability solutions.

Mercer IC president Rich Nuzum says his firm's "substantial intellectual capital" gives trust banks an edge in the fight for institutional assets. "We believe GlobalBridge has created an excellent program and Mercer IC is excited to be a part of their team."

Coughlin adds that end result of GlobalEdge "is a group of highly competent institutional advisors who have learned and put to use best practices from buyers and sellers of services."

GlobalBridge SMA users Flint, Mich.-based Citizens Bank's and First American Bank in suburban Chicago have already signed on with GlobalEdge.

Alan Teraji, head of First American's wealth-management business, says he is "very comfortable competing for institutional assets on the product side"  because of First American's ongoing relationship with GlobalBridge as a private-client investment provider.

Minneapolis-based GlobalBridge works with 45 banks and expects to add another 40 organizations in 2006 and 2007. It has about $1 billion in assets under management. --FWR

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