Wealth management subsidiary a bright spot for M&I

M&I Corp. had about $859 million in losses in 2009. M&I executives say they believe the company will return to profitability late this year or in early 2011.

But while M&I Corp. has dealt with large company-wide losses during the last two years, its money management subsidiary, M&I Wealth Management, saw growth in 2009. And the subsidiary’s growth appears to be continuing this year.

“We have the largest wealth management platform of any regional bank in America,” said Mark Furlong, M&I Corp.’s president and chief executive officer. “And it has performed incredibly well through this cycle.”

At the end of 2009, M&I Wealth Management had roughly $33 billion in assets under management and $122 billion in assets under administration. Both marks were all-time highs. M&I Wealth Management posted revenues of $68.1 million during the first quarter of 2010, compared to $62.7 million during the first quarter of 2009.

Although assets under management fell slightly, to $32.7 billion in the first quarter of 2009 from almost $33 billion in the fourth quarter of 2009, assets under administration rose to $124.6 billion in the first quarter from $122.3 billion in the fourth quarter of 2009.

The division’s growth was due to its continued focus on investment performance and diversification, said Ken Krei, president and CEO of M&I Wealth Management. Investment performance has been a key to growth at M&I Wealth Management, he said.

“We’ve got a very experienced and strong leader in Tommy Huie (president and chief investment officer of M&I Investment Management Corp.),” Krei said. “He’s added a great deal of consistency and stability in the way we manage money. We’ve tried to take a long term view of what our customers would want in terms of performance. And with our risk appetite, we’ve been somewhat risk averse, which has served us well.”

M&I Wealth Management has also diversified its services that it can provide to clients expanding its private banking, trust administration for individuals, institutional and nonprofit services, as well as its operations outsourcing.

“We grew in directions where we could capitalize on areas where we have strength and take something to the marketplace and develop a growing asset stream,” Krei said.

The wealth management division has also captured new clients in areas outside the bank’s traditional footprint, largely by connecting to advisors and consultants in other markets. It has also hired selected personnel in out-of-market areas to reach new clients, Krei said.

“We’ve been successful at attracting and retaining a number of people. We’ve brought some senior managers from outside the Wisconsin region into the organization and they’ve been really good contributors,” he said.

To continue its growth, M&I Wealth Management is now investing in advertising and marketing materials, as well as continuing its outreach efforts.

“We’re trying to leverage and use all of the resources we have in terms of sharing the positive performance and influence the positive things that come to us,” Krei said.

For 2009, M&I Wealth Management contributed 14 to 15 percent of the total revenue at M&I Corp. The division hopes to grow to 25 percent of the company’s total revenue in the future, Krei said.

“We’re doing the right things in terms of investments, the recognition of the organization, but also for the overall expansion as well,” he said.