"Asset management is just one service our clients use," says CEO T. Cecala. Wilmington Trust is in the process of separating Wilmington Trust Investment Management, its asset-management business, from its Wealth Advisory Services (WAS) division.

But where other firms have traded away their investment-management units altogether -- most notably Citigroup in 2005 and Merrill Lynch in 2006 -- Wilmington Trust plans to keep its money-management business in house, even as it plays down the importance of asset management to its overall wealth-management offering and acknowledges growing demand from corporate clients.

"It makes sense to separate WTIM from WAS for two reasons," says Ted Cecala, chairman and CEO of Wilmington, Del.-based Wilmington Trust. "First, in the WAS business, we specialize in advising on a full range of wealth management, protection, and transfer strategies, and asset management is just one of the services our clients use. Second, we are increasingly leveraging our investment management capabilities on behalf of institutional clients and those we serve in our Corporate Client Services business."

WTIM managed almost $35 billion and administered another $87 billion on 30 September 2007.

Dispelling a myth

Wilmington Trust's Corporate Client Services unit counts a number of Delaware-based Fortune 500 companies among its clients. It serves mainly to provide corporations with capital-markets, trust-entity and retirement-plan services.

WTIM comes into play for Corporate Client Services when companies call on it to manage residual cash or funds held in escrow accounts, debt-service-reserve accounts, and other accounts associated with trusts and special-purpose entities. In addition, WTIM manages retirement-plan assets for some of Wilmington Trust's corporate clients.

At last tally, Wilmington's corporate-client business accounted for about 20% of WTIM's assets under management and administration. WTIM expects to see little increase in that proportion even as its corporate-client business grows, thanks to projected growth on the private-client side.

In addition to emphasizing its role as an institutional manager, taking WTIM out of WAS will spotlight its performance and so help "dispel the myth that banks can't manage money," says WTIM's CEO Robert Balentine.

A bank that manages assets adroitly is a formidable competitor because banks generally well regarded by their customers, according to Balentine. Wall Street firms are seen as competent investment managers or consultants but aren't especially liked or trusted by their customers. Banks, by and large, are thought more trustworthy but considered stodgy and fettered when it comes to investments.

Necessary autonomy

Atlanta-based Balentine has headed Wilmington Trust's asset-management business since the trust company purchased his investment-counseling firm Balentine & Company in 2002. The integration of Balentine & Company with Wilmington Trust's all-proprietary investment program has resulted in a hybrid approach to investment management featuring a blend of in-house and non-proprietary products and strategies.

Making WTIM a standalone unit Wilmington Trust could help it compete for talent by tying performance-based compensation to its own results rather than those of a broader and -- quite probably -- more marginally constrained wealth-management division.

"Our focus is on maintaining an entrepreneurial culture," says Balentine. "The most successful investment-management firms have autonomy."

Many banks have trouble with the idea that successful portfolio managers and wholesalers can demand compensation packages that rival or surpass those of their bosses.

Balentine says that WTIM is also exploring the possibility of providing customized investment services to investors -- especially family offices, endowments and foundations in the $20-million-to-$100-million range -- through investment consultants.

WTIM isn't thinking of distributing investment products through retail sponsors, however.

Multifamily office

The restructuring at Wilmington Trust coincides with the promotion of Mark Graham, formerly head of wealth management and commercial banking in its mid-Atlantic region, to the number-one slot at WAS.

Graham is replacing Rodney Wood, who left Wilmington Trust late last year to lead Ford Estates, the Detroit-based single-family office of the Ford family.

Cecala describes Graham, who joined Wilmington Trust in 1983, as "a proven leader" with "in-depth knowledge of our company, our clients, and our strategies for revenue growth and expansion."

Wilmington Trust says Graham helped make its name as a wealth manager and commercial banker in Pennsylvania, New Jersey and the Baltimore-Washington, D.C., area over the past 10 years. He pioneered an approach in which wealth advisors and commercial lenders work in teams to support privately held and family-owned businesses.

Catering to individuals and families with at least $10 million in liquid assets, WAS provides financial planning, asset management, and fiduciary services for high-net-worth individuals and families.

The acquisition six years ago of Balentine & Company helped transform Wilmington Trust's approach the managing money. Similarly, the trust company's approach to wealth management got a shot in the arm when it acquired Beverly Hills, Calif.-based Grant Tani Barash & Altman in 2004. Though at the time some questioned Wilmington Trust's ability to translate the family-office capabilities of a single firm into a national platform for ultra-high-net-worth clients, it has since expanded its Wilmington Family Office business in the U.S. Northeast.

In addition to the states already mentioned, WAS has offices in Connecticut, Florida, Georgia, Maryland, New Jersey and New York.

The Du Pont de Nemours family founded Wilmington Trust in 1903 to manage its affairs. The Du Pont family fortune is based on a chemical manufacturing business established in 1802. -FWR

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