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Canadian money manager pursues U.S. high-end market


The U.S. subsidiary of a Canadian financial services company has joined with a mutual fund firm to seek the assets of high net-worth investors here and in Canada.

RWB Advisory Services of San Jose, Calif., a U.S. subsidiary of Assante Corp. of Winnipeg, Canada, this spring expects to introduce a family of mutual funds and services designed for registered investment advisers serving high net-worth investors. The effort marks Assante's third move in the last three months to increase its presence in the U.S. high net-worth market. Earlier this month and in November, Assante announced plans to acquire firms which manage the financial needs of prominent sports and entertainment figures.

Those announcements followed a transaction in September in which Assante, which is privately held, acquired RWB. The acquisition is helping to provide capital for RWB to expand its 24-year-old business, which now has about $2 billion in assets under management and 60 employees.

Assante "saw RWB as a beachhead for the U.S. market," said John J. Bowen, Jr., the RWB Funds' president and chief executive officer.

To expand that beachhead, RWB has joined with Dimensional Fund Advisors (DFA) of Santa Monica, Calif. - the money management firm whose index-oriented style of passive investing is popular with advisers - to offer a series of new products. DFA will serve as the sub-adviser for six new RWB mutual funds intended to offer the core financial holdings for investors, Bowen said.

The funds include: the U.S. Bond Fund; the U.S. Total Market Fund; the U.S. High Book to Market Fund; the International High Book to Market Fund; the U.S. Small Companies Fund and the International Small Company Fund. The minimum initial investment is $100,000.

In addition to the funds, RWB will offer operations and advisory support for registered investment advisers serving wealthy investors. RWB will offer advisers special support for investors who have at least $1 million to invest.

The package of mutual funds and services provide "a turnkey program for advisers," Bowen said.

Financial services firms are particularly intent upon capturing assets in the high net-worth market. The firms hope to provide advice and sell products and services ranging from insurance and mutual funds to tax and estate planning to this market.

A report last year from the Spectrem Group, a financial services consulting firm, projected that the number of households with investable assets in excess of $1 million would increase by 7.3 percent through 2002, to a total of about 3.6 million households. Affluent households, those with a net worth of more than $500,000 or incomes in excess of $100,000, are expected to grow at an inflation-adjusted rate of 4.12 percent, Spectrem said.

Assante, a holding company, specializes in providing so-called "wealth management" services to the affluent through its affiliates. The company has its own sports and entertainment division.

Earlier this month, Assante announced plans to acquire Philpott, Bills & Stoll, a financial management and accounting firm in Encino, Calif. whose clients include the actor Michael J. Fox. In November, Assante announced plans to acquire NKS Business Management of Los Angeles, another firm which serves as business manager to Hollywood stars. Both deals are expected to close in the first quarter of this year. Officials did not announce terms of the deals.

Assante's effort to reach the affluent market squares with the target audience of RWB, which encourages advisers who use RWB's services to work as "personal chief financial officers" for their high-net-worth clients.

Customized financial planning appears to be what the wealthy want from their advisers, according to Brent Brodeski, a partner in SAVANT Capital Management in Rockford, Ill., whose firm specializes in the affluent market. The clients his firm services are less interested in short-term investment returns than they are in estate planning and so-called "objective planning," investing and saving for a particular event such as retirement, Brokeski says. Those clients also want one-stop shopping for their money management, financial and estate planning, said Brodeski.

DFA's mutual fund offerings are popular among advisers. SAVANT, for example, has roughly $80 million of its $170 million in assets in DFA funds, Brodeski said. DFA, along with firms such as the Vanguard Group, Bankers Trust and Charles Schwab, provide low-cost index products popular with investment advisers who rely on asset allocation strategies for their clients, Brodeski said.

DFA officials did not return a call seeking comment.

The RWB-DFA combination will not be confined to the U.S. The firms plan later this year to create a similar line of funds which will be offered in Canada.