![]() “Choosing its predominant retail strategy has removed itself from the fray,” says Michael Flanagan, an analyst at Financial Analytic Services Inc. What some see as deficiencies, others see as strengths. household’s investable assets have been growing 8% a year, assets under PaineWebber’s control have swelled at twice that rate. Mutual fund assets continue to grow - they were up 17% in the first-quarter - and investment banking is better than people think, he says, noting that PaineWebber is the top underwriter of municipal bonds. Marron defends the firm’s record in its core businesses. It’s also completing an $80 million computer project to meet potential millennium bug challenges by the end of this year. PaineWebber recently rolled out a $100 million upgrade for broker workstations dubbed ConsultWorks, which allows brokers to execute orders and look at a client’s statement while the client looks on from a home computer. And some of you will become asset managers.” “What we tell our brokers is you’ve got to become asset gatherers, and then asset allocators. To do that, he’s hoping to add 1,200 brokers this year, and have nearly 8,000 by 2000, from more than 6,200 today.įor years, PaineWebber has been selling its brokers on the virtues of charging fees over commissions today, about 25% of the average broker’s revenues comes from fees. Only about a third of the country has enough savings to make a broker’s time worthwhile, he says, and PaineWebber is trying to reach only the top third of that group. There aren’t 1 billion people on the planet who are potential clients for us.” “Citibank’s announced goal before the (Travelers) deal was to go to 1 billion clients worldwide. “We are looking at acquisitions from time to time,” he adds, “but the prices for these things are so high.” and Citicorp, which announced plans in April to merge into what would be the largest financial services firm in the world, PaineWebber is seeking to generate most of its growth internally. ![]() Marron also hopes to generate $1 billion of recurring fee income, from a projected $800 million at the end of 1998. $52.3 billion today, and his legions of brokers to oversee $500 billion, up from $320 billion. Marron painstakingly lays out the firm’s strategy: to build the PaineWebber brand image and offer investment advice to affluent Americans.īy 2000, he wants assets under management to hit $80 billion, vs. He’ll be the last guy standing.”įrom his posh midtown Manhattan offices adorned with works by Roy Lichtenstein, Willem de Kooning and Jasper Johns, Mr. Bruce McEver, now president of New York investment bank Berkshire Capital Corp. “He’s done a brilliant job of merging a company and ending out on top,” says former colleague H. ![]() He quickly became chief executive and in 1977 sold Mitchell Hutchins to PaineWebber, becoming chairman there in 1980. in 1959 and ran it until 1965, when he sold it to fund manager Mitchell Hutchins & Co. Meantime, asset management fees grew 31.2% in the quarter to $158.7 million because of increased efforts to sell trust services and investment portfolios called wrap accounts. And first-quarter net income was a record $120.7 million, up 20% from the year-earlier period. Last year’s net income was $415.5 million on revenues of $6.66 billion. Whatever the outcome, Paine-Webber, now the country’s fourth-largest brokerage, certainly is an attractive target for someone. of America, has popped up again recently. And talk of merger discussions with Prudential Securities Inc., the brokerage unit of Prudential Insurance Co. His company’s stock has soared over 130% the past 18 months, to about $42, amid sniffing by the likes of BankAmerica Corp. Marron’s vision for an independent PaineWebber isn’t quite what Wall Street sees. ![]() Our strategy is to be a major national brand name dealing with the affluent end of the market.”īut Mr. “All the competition reinforces the fact that consumers will go more and more to a brand name. “While the view is that the industry is consolidating, the fact is there are 300 more firms than there were five years ago,” he says, pointing to online discount operations and bank brokerages. Somebody’s merged - and I can give them all my business’? I haven’t,” says Donald Marron. ![]() “Have you met anybody yet who says: ‘This is great. ![]()
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