South and western regional adds third RIA affiliate, looks to extend UMAs. In its third wealth-firm acquisition in five years, Birmingham, Ala.-based holding company Compass Bancshares has purchased Denver-based Capital Investment Counsel (CIC). The addition of CIC, which has an office in Scottsdale, Ariz., gives Compass the chance to offer investment-consulting services to private clients in its Colorado and Arizona retail- and commercial-banking imprints. It also opens up another distribution avenue for the bank's growing unified managed account (UMA) platform.

Financial terms of the deal weren't disclosed.

CIC "further enhances our ability to provide customers with first-class wealth management and investment advice," says Compass' chairman and CEO D. Paul Jones Jr.. "As our primary investment-advisory arm in Denver and Phoenix, [CIC] will enable us to more effectively serve customers in these key western markets."

As a subsidiary of Compass Bank, CIC is to keep its name. Its management team, led by chairman and CEO Chris Johnson and president Clark Johnson, will continue in their present roles.

Homegrown

Clark Johnson characterizes the merger with Compass as "a sound business decision designed to enhance our existing client's experience." He adds that the combination provides CIC with "opportunities for growth as we offer a wide range of services to Compass' customers and gain access for our clients to Compass' banking products."

Compass' acquisition of CIC comes just as the bank's Wealth Management group gets set to extend its SmartPath UMA program to its wealth-management affiliates, Jacksonville, Fla.-based St Johns Investment Management and Houston-based Stavis Margolis Advisory Services.

"We're looking for opportunities to integrate our investment offering across our affiliates," says Compass Wealth Management's CIO John Sawyer.

By the most generally accepted definition, UMAs blend separately managed accounts, ETFs and mutual funds in a single account. The bulk of UMA assets -- expected to hit the $500-billion mark by 2011 -- are distributed by the five wirehouses. Increasingly though, regional and independent broker-dealers, banks and RIAs are getting in on the act.

Most non-wirehouse distributors get hold of UMAs through third-party investment-platform providers like BNP Paribas' FundQuest, PFPC's Advisorport, Pershing's Lockwood, Lydian's Fortigent and independents such as Envestnet, GlobalBridge and Clearbrook.

Compass -- eager to keep its fiduciary obligations in house and equally keen to make its own fixed-income offerings part of the mix where appropriate -- takes a more do-it-yourself approach to UMAs using overlay-management technology from Boston-based Smartleaf and investment-manager research from Denver-based Prima Capital.

Overlay management is the process of aligning trading activity, managing cash flow and enhancing the overall tax efficiency of multiple-sleeve investment portfolios.

Right now Compass' Houston-based wealth-management division manages about $2.5 billion. St Johns, which Compass acquired in 2002, manages about $400 million. Stavis Margolis, which Compass added in 2005, manages about $800 million. CIC manages around $1.3 billion, but most of its clients are individuals who don't qualify for "high-net-worth" status. -FWR

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