TORONTO Toronto-Dominion Bank hopes to expand its U.S. wealth management business, targeting a million people with at least $100,000 in liquid assets who already are customers of its growing U.S. retail bank, said a senior executive of Canada's second-largest lender.
Banks globally are battling to win both high-net worth clients, typically defined as those with at least $1 million in investable assets. Investors with at least $100,000 in assets are referred to as the "mass affluent."
While TD Wealth already has 2 million customers and C$544 billion ($492 billion) in total assets, most of that is in Canada, where the bank has a strong direct investing and full-service business.
Now it is looking to utilize the retail presence of TD Bank in 14 states from Maine to Florida, the investing services of online broker TD Ameritrade, and the asset management capabilities it gained by acquiring Epoch Investment Partners Inc in 2013, to turn the bank's clients into wealth management clients - both high net worth and mass affluent.
"The last few years have provided TD with the ability to seed what is a very significant U.S. presence," Leo Salom, the bank's executive vice president of wealth management, told Reuters this week.
TD and rival Canadian banks are looking to wealth management for income growth as aging baby boomers focus on boosting retirement savings. This could help offset the drag on profits at the banks' traditional loan business caused by record high consumer indebtedness and a cooling mortgage market.
As part of the plan, TD aims to increase the number of private-wealth advisers in the United States to 300 in the next two years, from 150 today.
"Just in the (first) quarter (of 2014) we have 15 additional advisors on the high net worth side. We're targeting to be able to run at that clip every quarter," Salom said.
Salom, who joined TD in 2011 and took over their wealth division in 2013, has an up-close view of the U.S. business, regularly commuting from a home in Florida to Toronto.
His previous work with Barclays and Citi including managing retail and private banking operations in Europe, Latin America and the United States.
As TD Bank deepens its U.S. footprint beyond its current 1,300 branches and almost 8 million retail clients, Salom's job is to shift the wealthiest of those clients into TD's wealth offerings, from retirement and trading accounts to investment products and family office needs.
TD Bank owns about 40 percent of TD Ameritrade.
As with U.S. banking, U.S. wealth management is far more fractured and diversified than in Canada, where the six largest banks hold a near oligopoly in investment services.
That means TD is competing against the big U.S. banks like Citi or smaller players like Charles Schwab in wealth management. But Salom said simply taking TD's base of 8 million U.S. clients is a good place to start.
"A little over 1 million (of those) would be mass affluent in nature, (and) the biggest opportunity for us," Salom said.
While rivals including Royal Bank of Canada and Canadian Imperial Bank of Commerce have explicitly said they want to grow their wealth management businesses globally through acquisition, Salom said TD believes organic growth can get the bank where it needs to be.
"We will be opportunistic if the right acquisition comes along, but the strategy isn't built on necessarily growing through acquisition," he said.
($1 = 1.1057 Canadian Dollars)
(Editing by Jeffrey Hodgson and David Gregorio)