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Community Wealth Management Services benefits from growth strategy

By Traci DeLore

Date:

DeWITT — A year after outlining strategies to grow Community Bank System, Inc.’s (NYSE: CBU) wealth-management division, the banking company is reaping the dividends of implementing those efforts.

Community Bank System saw its total revenue grow $4.3 million, or 4.8 percent, to $92.5 million for the third quarter, according to its Oct. 20 earnings report. It reported revenue growth of $2.2 million, or 16.3 percent, from its wealth-management and employee-benefits businesses, collectively known as Community Bank Wealth Management (CBWM).

The growth comes from both new clients and boosting business with existing clients, says Paul Restante, managing director of CBWM. Over the past year, CBWM has focused on sharpening its focus on its advisory, fee-based planning, increasing its sales force, and enabling its top financial representatives to cultivate better client relationships.

CBWM is set to end 2014 with $3.99 billion in assets under management, up from $3.75 billion, and $19 million in revenue, up from $16.3 million last year. A large part of that increase comes from Community Investment Services, Inc., a full-service brokerage and wealth-management firm that is one of the four subsidiaries that operate collectively as CBWM. Community Investment Services should see about 23 percent growth this year with projected revenue of $8.6 million, up from $7.1 million last year.

Restante credits a new strategy for much of that growth. “We reduced the number of branches each financial representative covered,” he says. The firm’s more traditional model was to have representatives assigned to Community Bank branches and they would focus on finding clients within the branch’s client base. Now, he says, a number of senior representatives have been pulled from the branches and freed up to focus on building a network outside of the branch locations. The company added three full-time financial consultants, bringing its total to 34, and three junior brokers this year, 

On top of that, CBWM has focused efforts on opening freestanding wealth-management offices. “We actually did that in 2013,” Restante says. “We opened and established three stand-alone wealth-management offices, and we have plans to do a few more going forward.” The current offices are located in Wellsville, Watertown, and Scranton, Pa. Over the next three to six months, Restante hopes to open additional offices in Plattsburgh, Canton, and DeWitt along with Wilkes-Barre, Pa. and southwest Florida. The branches give CBWM more exposure in non-bank markets, he says, and also provide a more professional setting for representatives to meet with their clients.

Nottingham Advisors, Inc., CBWM’s national boutique investment firm based in Buffalo, has logged several noteworthy accomplishments in the last year, including reaching $1 billion in assets under management. In June, the firm was rated one of the top 300 financial advisors in the country by The Financial Times. Nottingham Advisors also received several favorable ratings from Morningstar.

“Our growth for Nottingham is probably going to have a large spike in 2015 because we are getting large enough,” Restante says. “We could potentially be asked to be on other broker-dealer portfolios.”

The Community Bank Trust Services subsidiary will end the year with 8 percent growth, as will CBNA Insurance Agency, Inc. And, the Benefit Plan Administrative Services, Inc. unit has revenue of $41.7 million and $18 billion in assets under management.

Headquartered in DeWitt, Community Bank System (www.communitybankna.com) operates more than 190 bank branches across upstate New York and northeastern Pennsylvania through its Community Bank, N.A. subsidiary and has total assets of $7.5 billion.        

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