Former Paine Webber CEO bullish on small brokers
NEW YORK (Reuters) - Former Paine Webber CEO Donald Marron said smaller wealth advisory firms will emerge from the economic crisis as the big winners.
Marron, now chief executive of private equity firm Lightyear Capital, said on Monday the next decade represents a new boom for wealth advisers as largely self-directed investors burned by the financial crisis seek professional advice.
Speaking at the Reuters Global Finance Summit in New York, he said investors have stopped being spectators to financial crises and, as a result, represent a potentially untapped market.
"There's a big opportunity over the next 10 to 15 years," he said, particularly among investors who "have a limited ability to manage their resources."
Marron said that while the biggest U.S. wealth managers have consolidated "through strength," smaller firms have an opportunity to court those investors.
"You don't need to work at the biggest firms to have access to the best products, people and services," he said.
Marron called the economic crisis the first "401(k) crash," referring to the battered retirement accounts of many American workers.
"There is a broadening number of people who are much more sensitive to the fact they need professional advice," he said.
And Marron is betting Lightyear's money on the push.
On November 3 Lightyear agreed to purchase ING Group's (ING.AS) U.S. retail investment adviser operation, which includes 5,700 advisers and $80 billion in assets. Terms of the deal, scheduled to close in the 2010 first quarter, were not disclosed.
The move is a reentry for Marron into the wealth industry.
He was Paine Webber's chairman and CEO when it was acquired by Swiss bank UBS AG in 2000. He then served as chairman of UBS America, leaving in 2003 to start Lightyear Capital.
(Reporting by Joe Rauch; editing by John Wallace)
