Wealth Professionals

State Street Bank has staked out a strong market position among other North American financial institutions and with sophisticated investors by providing specialized offerings including custody, operations outsourcing and information services.

In January, Boston-based State Street took a minority interest in ByAllAccounts, a Boston-based provider of account aggregation and portfolio analysis tools. State Street will incorporate these tools into its offerings for institutional investors, particularly those who also manage funds on behalf of wealthy private clients.

Anne Tangen, after 15 years with Fidelity Investments, joined State Street Bank in 1996 to lead its Global Cash Management department. Now, she's responsible for developing new products and services for institutional investors as head of the recently-formed Wealth Manager Services group. Tangen spoke with senior associate editor Ivan Schneider about the new services available for institutional investors, the company's account aggregation strategy and its vision to capture a larger slice of the offshore wealth management business.

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BS&T: What kind of customers is the Wealth Manager Services group targeting?

TANGEN: Large, global, institutional money managers that manage money not just for pension funds and corporate mandates but also for high-net worth individuals. We're also looking at some private banking services, where they're really looking to expand their capabilities but don't have the infrastructure or technology to support that expansion. They leverage State Street's scale, our technology, our global reach, and our operational expertise to run that back office for them.

BS&T: How does account aggregation fit into State Street's strategy?

TANGEN: A key tenet at State Street is to really look at what that investment manager is trying to do and build our service around it. We kept hearing, across the board from all these investment managers, that they manage a "sleeve" of the investment strategy for high-net worth individuals.

They know they don't have the entire portfolio but they're trying to develop a comprehensive set of advisory services so that they can support individuals and build more loyal and trusted relationships. Individuals weren't coming to the investment managers just for a particular performance reason-they were coming because they had a trusted, valuable advisory relationship.

BS&T: Which trusted advisors-bankers, accountants, lawyers, money managers-might benefit the most from the availability of account aggregation services?

TANGEN: I see the industry really converging. People seek advice in people they're confident in. If taxes are your biggest concern, you'd look for financial advice from your tax advisor.

So many people choose and look to the different service providers out there depending on where they're comfortable. Money managers are recognizing that they aren't the only ones that people go to when concerned about their investments in their financial picture.

I see the industry really converging where everyone's looking for those same types of tools to help their clients and to really make a business out of advice. So I see a lot of new tools emerging to really help that business.

What I see as an interesting component to that is the certification process. The public really lacks an understanding of what is a Certified Public Accountant as opposed to a Certified Financial Planner. Where you would seek more financial planning advice from a CPA, are you in the right place? It's just like going to a doctor or a dentist without the proper degrees.

BS&T: What's your approach to the non-U.S. financial services market?

TANGEN: We've been spending a lot of time looking at the global aspects of the wealth management business. It's certainly a global business, and investment managers in the U.S. are recognizing that there's an awful lot of assets-and wealthy individuals-outside the U.S.

So we will move, as our investment managers actually move abroad to support them, with our infrastructure and our global technology. We have a multi-currency, multi-base accounting system, as well as a settlement system and sub-custodian network that's worldwide.

BS&T: How is the private banking market different overseas?

TANGEN: What we've recognized when we go outside of the U.S. is that the U.S. is technology-savvy. The advisor network that's outside of the U.S. is different from country to country. In the U.K., they look to their banker to be their financial advisor. We have to make sure that we can support that advisory function. And then you have the offshore assets for tax efficiency in the U.K., that you probably wouldn't see as prominently here in the U.S. So there are nuances that we're working on.