BMO taps Wells Fargo executive to lead asset management unit
TORONTO Bank of Montreal sent another signal Wednesday that it is serious about building its asset management operations in the United States, announcing that an outgoing executive of California-based Wells Fargo & Co. would be taking over as CEO of BMO Global Asset Management.
The appointment of Kristi Mitchem is effective March 18, BMO said. She will succeed Richard Wilson, who had been in the role since 2014 and who is retiring.
“Kristi is highly respected across the industry,” said Darryl White, CEO of BMO, in a press release. “I look forward to her joining our team and building on Richard’s success in leading BMO’s asset management business to drive exceptional performance and service for our clients.”
Mitchem, who also has experience at State Street Corp., BlackRock Inc. and Goldman Sachs Group, Inc., was head of Wells Fargo Asset Management, where she oversaw approximately US$500 billion in assets under management. BMO GAM has more than $320 billion in assets.
The move comes a few months after BMO said it was aiming to double its wealth management-related earnings over the next five years.
At an October investor day, the head of BMO Asset Management noted that the bank had 19 per cent of its assets under management in the U.S., but that the U.S. market represented 50 per cent of a $100-trillion global asset pool.
“And so clearly in the U.S. we’re undersize,” an executive said at the time.
BMO said Mitchem will report to Joanna Rotenberg, the group head of BMO Wealth Management.
“Her (Mitchem’s) asset management expertise, creativity, and technological acumen will be a strong catalyst in our next chapter of growth,” Rotenberg said in the release.
The appointment of Mitchem speaks to the “growing international flavour” of asset management among Canadian banks, which have “absolutely dominated” that space within Canada over the last 10 to 15 years, Barclays Capital analyst John Aiken said.
“We’ve hit what one might call a saturation point, where you’re going to continue have growth, because Canadians are going to continue to save. And the banks, given their influence over distribution, are going to … presumably continue (to) get the lion’s share of sales,” Aiken said.
“But, if you’re going to look to continue to grow the platform at a stronger clip, you have to look for larger markets, and the U.S. remains the largest wealth management sector in the globe.”
The U.S. asset management industry has been hit harder by the passive-investing trend than Canada’s thus far, Aiken said, which is experience Mitchem could bring to BMO.
She is at least the second Wells Fargo veteran the bank has recruited for a high profile role in recent years; Brett Pitts was named chief digital officer in November 2017.
Mitchem will step into her new role as other big Canadian banks have made moves to enhance their own wealth businesses, adding to their slates of investment products and looking outside Canada’s borders for growth.