Cut-rate SMA vendor says it’s feeling expansive again. Curian Capital plans to hire nine new wholesalers by the end of June. The Denver-based third-party separately managed account (SMA) platform provider says it’s ramping up to support new opportunities to push its low-minimum, models-based SMA platform into the independent brokerage channel.

News from Curian, an upstart platform that continues to turn heads with SMA minimums starting at $25,000 in an industry where the going hurdle is closer to $100,000, has been scant since late in 2004. That’s when the Jackson National Life Insurance affiliate shed about 10% of its 200-strong workforce, including two of its three top managers and 15 of its 40 wholesalers.

Big team

The latest hiring round is meant “to take full advantage of the enormous opportunities that exist in the managed accounts industry,” says Michael Bell, Denver-based Curian’s president and CEO. “By expanding our wholesaling force, we are demonstrating our commitment to providing superior client service for financial professionals as they seek out new and innovative investment opportunities for their clients.”

Bell says the nine new wholesalers Curian plans to hire this year will re-align the external and internal sales teams – now split 15 to 10 in favor of the road warriors – to a one-to-one ratio. In other words seven of the new wholesalers will be providing in-house support.

With two-person wholesale teams back in place, Bell says Curian is looking forward to upgrading the support it offers advisors who use its SMAs. Though that support boils down to education on the role of SMAs in investment consulting processes, Bell says it also runs to business-practice consulting – a familiar enough refrain from investment-product wholesalers.

Even without the nine new wholesalers Curian has an outsized sales force. One of its more established competitors, with about 12 times Curian’s assets under management, says it has only 12 wholesalers; another, slightly smaller, one fields eight wholesalers.

But Bell says Curian’s large sales team allows it to penetrate its 17 U.S. markets more effectively than its rivals. “We’re out there in every one of our markets really trying to help our advisors build their businesses.”

Brief recap

Bell has been running Curian since late 2004, when, as the firm’s chief legal officer, he survived a purge that rid the firm of James Vitalie, executive v.p. for strategic planning, and Kevin Garrow, v.p. for business development. At the time Vitalie, Garrow and Bell were Curian’s top executives.

Like Vitalie, Bell is a former employee of FOLIOfn, a Vienna, Va.-based fractional-share trading platform. Vitalie now heads SMA wholesaling for Old Mutual Investment Partners, a subsidiary of Old Mutual Capital.

With Vitalie and Garrow gone, Jackson National named Mitch Waters and Dan Maurer to top slots at its SMA distribution unit late in 2004. Both had been with Curian since before its 2003 launch. Waters is in charge of Curian's sales efforts. Maurer is responsible for outreach to client institutions and advisor training.

Jan Hanshaft, who manages Curian’s trade processing, clearance and settlements, and Steven Young, head of strategic asset allocation and capital market analysis, round out Curian’s five-man management team.

Curian’s assets under management have grown from $781 million at the end of September 2004 to $1.7 billion across about 16,000 acounts at the end of 2005. The SMA provider has nearly 300 selling agreements touching about 18,000 brokers and advisors.

The bulk of Curian’s business is in the independent-broker space. “That’s where we see the most opportunity for growth and that’s the area we’re concentrating on,” says Bell.

Curian has been focused on independent brokers since it went live. Bell says its models-based accounts are comparatively easy for intermediaries to administer, and its low minimums make it a less intimidating step up from mutual funds than big-ticket SMAs.

But in the early days Curian was also keen to reach small banks through their brokerage and personal-trust platforms. Late in 2003 it forged a preferred-provider agreement with the Independent Community Bankers of America, an industry association for small banks and thrifts. It also has a couple of selling agreements with investment-product adjuncts to credit unions. Meanwhile, managed-account providers to the trust space say they don’t run into Curian all that much.

Curian’s parent Lansing, Mich.-based Jackson National Life Insurance is a subsidiary of Prudential plc, a U.K..-based insurance and banking company that has nothing to do with Prudential Financial, a U.S.-based insurance and banking company. –FWR

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