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Beneficial Wealth Unit Sees Opportunity in Crisis


The top wealth management executive at Beneficial Bank in Philadelphia said his unit aims to take advantage of its rivals' "distractions."

"We have fairly aggressive goals given the market," said Robert Bush, the chairman and chief executive of Beneficial Advisors LLC and Beneficial Insurance Services LLC. "But we feel we're in a better position to be more responsive than our competitors"-in particular larger companies wrestling with the financial crisis.

Executives want Beneficial Advisors LLC, its wealth management, investment brokerage and retirement services subsidiary, to increase its revenue and earnings by 30% this year. The keys will be continued hiring of advisers and cross-selling to customers in retail and commercial banking, lending and insurance, according to Bush and James Quinlan, the president of Beneficial Advisors.

The $4 billion-asset Beneficial Bank, the banking unit of Beneficial Mutual Bancorp, is starting from a small base. With $150 million of assets under management, its nine-year-old wealth unit is still relatively small.

Beneficial had 10 advisers as of February and plans to gradually increase that until it has one adviser for every five to seven of its 72 branches, Bush said. The recruiting environment is strong, and Beneficial will patiently seek out the best candidates, with an emphasis on their retirement business credentials, he said.

In the past 14 months, Beneficial hired seven advisers. They came from a global bank, a big insurance company and an independent adviser shop, Quinlan said.

Beneficial fine-tuned its wealth unit's business model two years ago. At that time, the bank broadened its offerings to include everything from access to 401(k) plans to mutual funds to estate planning and retirement analysis. Quinlan was hired in June 2007 to help expand.

Beneficial plans to take the retirement plan business in-house to have more control over the sales process and client relationships, the executives said. Beneficial's retirement assets make up 40% of its assets under management.

The executives said Beneficial expects 10% growth in revenue and earnings this year from Beneficial Insurance Services, its property, casualty, life, health and benefits subsidiary. The insurance arm, which has 65 employees, has made "an excellent" contribution to the bank's bottom line, said Michael White, president of the research firm Michael White Associates. The insurance unit accounted for 6.7% of Beneficial's net operating revenue last year, White's data said.

Beneficial Bank ramped up its insurance operation with its 2005 acquisition of the brokerage firm Paul Hertel & Co. Bush, who had been the brokerage's president, remained with Beneficial and eventually became an executive vice president of the bank.

In the fourth quarter of 2007, Beneficial Insurance Services bought CLA Agency Inc. in Newtown Square, Pa., a move it said was part of a plan to increase noninterest income and lure more business.

Thanks largely to the CLA acquisition, Beneficial's insurance brokerage income rose 80.7% in 2008, to $9.28 million, according to Michael White Associates.

Among banks with assets of $1 billion to $10 billion, Beneficial ranked 28th in insurance brokerage. Its insurance brokerage income is 35.7% of its noninterest income, seventh in its asset class.

Annuity sales also rose sharply in 2008, with commissions rising 217%, to $814,000. The success allowed Beneficial to leapfrog 59 banks in its asset class and take the 41st position. Annuity commissions accounted for 3.1% of its noninterest income in 2008. Securities brokerage income rose 51.5%, to $303,000. Securities brokerage contributed 1.2% of noninterest income, and Beneficial ranks 152nd in the category among banks its size. Bush said Beneficial plans to enter the trust business, possibly via acquisition

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