A.G. Edwards has come up with an innovative way to extend the capabilities it built for its managed account business. The St. Louis-based broker-dealer has created an asset management subsidiary that will provide subadvisory services to third party institutions.

A stand-alone entity, Gallatin Asset Management is composed of A.G. Edwards' investment and advisory research team, and will serve both retail clients and outside institutions, according to a news release.

"We view this as a growth platform for us," Peter M. Miller, chairman of Gallatin, told the MFWire. "We want to leverage our asset management expertise and use it to manage outside assets in a subadvisory function."

Gallatin derived its name from that of its parent company’s founder, Albert Gallatin Edwards. "It's likely we will be getting a better reception using a brand different from the AG Edwards name," Miller explained.

Gallatin will earn management fees for asset management and advisory services, such as overseeing investments within programs offered by outside companies by managing portfolios, providing asset allocation models or choosing portfolio managers.

It already has an existing subadvisory relationship with MetLife Investors LLC, an offering through MetLife Investors to supply investment advisory services for two of the exchange-traded fund portfolios within one of MetLife’s variable annuity products.

Miller said Gallatin is currently in talks with a number of institutions about the service, but he declined to go into specifics on those mandates. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE