In an industry that’s been turned on its head, within a firm about to be swallowed by an acquirer, the leader of a financial services business targeting wealthy clients remains focused on the task at hand.   

“Everything is on the table for review,” says Stan Gregor, Wachovia Wealth Management Wealth Markets president – head of the business that advises clients with $5 million - $50 million of investable assets.

Under normal circumstances this uncertainly could be a serious concern coming from a strategist seeking to grow a client base among the extremely wealthy in North America, but these are not normal circumstances, and the majority of Wachovia’s wealth management competitors are in the same boat: either they are in the process of merging with another firm, cutting staff, or doing both.

Bank of America is merging with Merrill Lynch, meanwhile JP Morgan is in the process of swallowing Washington Mutual; the rest of the remaining largest banks in the country are shedding jobs after agreeing to receive government funds as the credit crisis has progressively taken hold of the industry.

In early October San Francisco headquartered Wells Fargo, the seventh-largest US bank by assets, agreed to take over North Carolina based Wachovia Corp in a deal that will go to a shareholder vote for final approval on December 23.

Until the vote is decided it remains difficult for Mr Gregor to start making concrete plans for the future. Even after the vote it will take a while for the absorption to take place and for the strategic focus of the combined entity to be defined.

“It’s been a humbling experience, everything has changed this year,” comments Mr Gregor in an interview with WealthBriefing.

But Mr Gregor has some reasons to be confident his leadership will be tapped under the new ownership once the dust settles into 2009.

Despite the fact Wachovia’s wealth management assets declined 13 per cent from year-end 2007 to $73.2 billion according to the group’s third quarter results, largely due to market depreciation as well as net outflows, Mr Gregor says Wealth Markets' assets have grown and not declined.

Mr Gregor has been focused on bringing new business into the Wealth Markets business.

Back in late 2007, Mr Gregor said he wanted every relationship manager in the business to bring on seven new clients in the high net worth category during the ensuing 12 months.

Wealth Markets has around 170 relationship managers in total spread across 25 teams mostly in states on the eastern seaboard.

At the start of this month Mr Gregor tweaked the remuneration structure to reward relationship managers in the business with a higher percentage of revenue on new sales, encouraging them to go out and get new business.

“I’m even surprised we’ve managed to grow our client base in this market,” he says.

Also reassuring for Mr Gregor is the appointment of David Carroll to head of the combined firm’s wealth management business.

Mr Carroll, currently Wachovia head of Capital Management Group, was the only Wachovia executive named to Wells Fargo’s leadership team reporting to the acquirer’s chief executive, John Stumpf, in a memo sent to staff recently.

While the heads of the respective divisions within wealth management under Mr Carroll will not be clarified until after December, Mr Gregor, who currently reports to Wachovia’s current head of Wealth Management, Stan Kelly, is running the Wealth Markets business as if he has a clear vision into the future.

He identifies Metropolitan New York, Texas and Florida as markets in which he wants to grow the group’s presence. There are also markets in the Mid-West region of the US – namely the state of Illinois – where Gregor says Wealth Markets currently does not have a presence but he believes it should.

Wealth Markets sits between Wachovia’s Private Bank – servicing clients with between $25,000 and $5 million of investable assets – and the group’s third party-branded family office, Calibre, catering to clients in the $50 million and above client category.

The other component of Wachovia’s wealth management business, Wachovia Securities, employs around 14,600 representatives who provide transactional-based advisory services.

The Wealth Markets business is structured around a “localised team” based approach, Mr Gregor describes.

Each one of the 25 teams comprises multiple relationship managers, trust advisors, financial planners, investment strategists, insurance advisors and banking (credit) experts.

Mr Gregor admits his business is an expensive model to support, but he says it is geared towards a holistic focus on the needs of the client.

“I’ve worked for other firms that say they have a team approach, but usually that means they draw on specialists from the broader group… This approach ensures teams draw on local support,” he says.

Mr Gregor is currently hiring specialists to populate Wealth Market teams in line with his growth strategy and he says the current market is filled with exceptional talent.

“I’ve recently spoken with the most impressive new class of hires I have ever seen with a breadth of knowledge among some that span 20-30 years of experience,” he says.

With rival firms Citigroup and Bank of America’s Merrill Lynch recently increasing their estimates for staff cuts, Mr Gregor sees Wachovia as well placed to benefit from the fallout of talent.

But whether the merger will lead to heavy job losses in Well Fargo’s merged Wealth Management business is still unclear.

Wells Fargo’s Private Bank focuses on providing personalised financial services in a similar category for customers in the $1 million and $50 million client category, but Mr Gregor says much of Wells’ existing advice business is based on the West Coast.

And though Mr Stumpf has said publicly Wells expects to take $5 billion in annual costs out of the combined company, Mr Gregor remains confident in Wachovia’s wealth management contribution to the broader group.

“I keep telling my team that wealth management did not cause Wachovia to be sold to Wells Fargo,” he says.

“I’m not stepping away from hiring and I don’t have a mandate to cut any jobs. We’re being strategic about how to invest shareholder dollars… I feel the wealth management space generally is in a growth phase.”