In part thanks to its 2021 acquisition of East Boston Savings Bank, Rockland Trust grew its assets under administration despite choppy economic waters that dinged other banks’ performance.

While market volatility and changing investor priorities created a challenging environment for some wealth management groups last year, Rockland Trust Co.’s wealth division saw its second straight year of record new business.  

Helping to drive some of that growth was the bank’s November 2021 acquisition of East Boston Savings Bank, one of two recent mergers that could bring still more business opportunities to Rockland Trust’s wealth division. Known as the investment management group, the wealth division plans to rely in part on acquired branches to uncover these growth opportunities. 

“The banks that we’ve acquired most recently, that being East Boston [Savings Bank] and Blue Hills [Bank] prior, I would say we’ve barely even scratched the surface of the opportunities that exist there,” said David Smith, managing director and chief investment officer at Rockland Trust. “I suspect those two alone will drive growth within the investment management group here at Rockland Trust for years to come.” 

The Markets’ Difficult Year 

Last year saw wealth management businesses facing a “perfect storm,” with assets under management and assets under administration affected by both the flow of customer money and the performance of the assets, said Mark Fitzgibbon, a managing director and research analyst at Piper Sandler.  

In a year when stocks declined, bond markets faced pressures and other types of assets struggled, he said, some customers also moved money to invest on their own. 

“2022 was an extraordinarily difficult year for the wealth business,” Fitzgibbon said. “Wealth management businesses across the country were under tremendous pressure from performance issues, and there was also kind of a movement afoot in the space where wealthy people, in many instances, decided to move some of their assets directly into Treasury securities, because the yield started to look attractive, and they were low-risk ways to kind of hide out.” 

But Rockland Trust, Fitzgibbon said, had relatively good performance compared to its peer institutions while also bringing in new business.  

“They had positive flows of $1.1 billion,” said Fitzgibbon, who covers the Hanover-based bank. “That’s extraordinary in a difficult market.” 

Rockland Trust ended 2022 with $5.79 billion in assets under administration up from $5.7 billion at the end of 2021 and up 17 percent since the end of 2020. The investment management group’s nearly $1.2 billion in new business in 2022 followed a previous record of $675 million. The fourth quarter of 2022 alone saw $469 million in new business.  

Some other banks with wealth management businesses saw assets under management or administration fall in 2022, including Cambridge Trust, which saw wealth assets fall by about 20 percent to $4.06 billion. Rhode Island-based Washington Trust, which has a wealth office in Wellesley, saw assets under administration drop 30 percent to $6 billion. 

Rockland Trust’s new business came from a variety of sources, Smith said, including retirement plans brought over from competitors and money the group manages for municipalities. A significant source of business, Smith said, involved bank customers who liquidated assets, such as the sale of businesses or real estate portfolios, and needed help investing the proceeds. 

In addition to referrals from Rockland Trust’s own staff, Smith said new business often comes to the investment management group from centers of influence, including attorneys and accountants, and requests to bid on opportunities, such as for charitable organizations. 

Opportunities in Region 

Rockland Trust’s investment management group has 10 offices throughout its Eastern Massachusetts footprint out to Worcester County and an office in Providence, Rhode Island. Smith said the bank has a variety of competitors, from stock and mutual banks to registered investment advisers and broker dealers. 

Fitzgibbon expects the region to continue to offer growth opportunities for wealth businesses. 

“[Rockland Trust] is blessed by the geography that they operate in,” Fitzgibbon said. “That Eastern Mass. market is growing rapidly … and there’s been a fair amount of consolidation of some of the other wealth managers up in that market.” 

Banks like Rockland Trust, Cambridge Trust and Washington Trust compete successfully in the wealth management space, Fitzgibbon said, in part because of the breadth of services offered, including tax and estate planning, and the product offerings, which include investments managed in-house and access to outside options. These banks have also made significant technology investments for their wealth businesses. 

Growth in the wealth space also depends on whether staff members, including wealth advisers and portfolio managers, remain with a company or bring clients to a competitor. 

“Some of the other players in the space have had a little bit more turnover, and in the wealth business, continuity is particularly important,” Fitzgibbon said. “The fact that [Rockland Trust hasn’t] had a lot of turnover, like some of the other players, has served them well.” 

Washington Trust in its fourth quarter earnings statement attributed a loss of more than $600 million in assets under management to the departure of four advisers.  

Diane McLaughlin

Internal Referrals Key 

While Rockland Trust expected to find wealth management opportunities with new customers from the East Boston Savings Bank acquisition, Smith said these opportunities exceeded expectations. The investment management group brought in new business from about 275 former East Boston Savings Bank customers in 2022. Nearly 100 customers associated with the former Blue Hills Bank, Rockland Trust’s previous acquisition, closed on new wealth business in 2022.  

Referrals from customer-facing staff, such as branch staff and commercial lenders, represent a key source for new wealth business, Smith said. 

With 10 bank acquisitions since 2008, Rockland Trust has developed a training program to help staff in acquired branches and loan centers recognize potential leads for the wealth team. The wealth offices often share office space with commercial loan centers, and every employee who interacts with customers has been assigned a contact in the investment management group.  

“The investment management group at Rockland Trust is a huge beneficiary of referrals from our colleagues around the bank, and I believe that is due in great part to the culture of Rockland Trust Co., which puts clients first,” Smith said. “Our colleagues – when they hear a client has a need and they know it’s a need that the investment management group can fill – we get referrals pretty consistently, and that’s an incredibly powerful tool to help a wealth management firm grow its asset base.”