Bank of Montreal 2003 Annual Report Download - page 37

Business Environment and Outlook
Private Client Group operated in a conservative investment
envi ronment in 2003. While equity markets showed signs of a
recovery in the latter half of fiscal 2003, soft labour markets
continued to affect investor confidence. Despite the impact of
these challenges, PCG continued to balance cost management
with strategic investment to support our long-term client-focused
strategy. The result was stronger financial results for the year.
We anticipate 2004 GDP growth rates of more than 4% in the
United States and close to 3% in Canada. This bodes well in
the short term for our wealth management businesses. With
the expectation of more robust economic conditions, the wealth
management industry should see improvement. Higher levels of
investor confidence should lead to improved client trading vol-
umes, while stronger equity markets should increase managed
asset values and related fee-based revenues, such as mutual
fund and discretionary managed product fees. We believe the
long-term demographic trends continue to remain attractive, indi-
cating strong demand for wealth management services well into
the future. PCG continues to be well positioned to capitalize on
these short-term and long-term trends with our integrated client
service offerings.
Gilles G. Ouellette
President and Chief Executive Officer, Private Client Group, BMO Financial Group and Deputy Chair, BMO Nesbitt Burns
“We are continuously focused on satisfying the needs of our clients. We strive to provide the best, most
innovative and competitive wealth management products and services, and we believe our success comes
from superb execution and putting the needs of our clients first.”
Further leverage relationships within our group and with BMO partners by
providing an integrated sales approach and product offering to clients.
▪Improved referral activity within PCG and with our retail partner, Personal
and Commercial Client Group, through client-focused partnering initiatives.
▪Opened a new Chicago office, bringing newly acquired SBSB’s expertise in
comprehensive financial planning to high net worth clients in the Chicago
area, to complement Harris Private Bank’s existing offering.
Continue to refine our businesses to enhance productivity and align our
business units to ensure consistently successful results regardless of
the business environment.
▪ Achieved net income growth of 93% and productivity improvement of
500 basis points over the prior year, despite general market uncertainty
and the conservative investor climate throughout most of fiscal 2003.
▪ Focused on enhancing productivity through reorganizing and realigning
certain business units while successfully renegotiating various third-party
service agreements without compromising client service.
▪ Pursued initiatives across all lines of business, focusing on sales force
productivity, revenue generation and cost reductions to improve results,
while enhancing client service and product offerings.
Capitalize on our acquisitions to create synergies with existing businesses
in order to accelerate our future growth.
▪A chieved meaningful cost reductions at Harris direct by reducing staff
positions and optimizing call centre and branch sites.
▪Added 110 planners, advisors and consultants to assist our clients through
the acquisitions of myCFO and SBSB.
Private Client Group
Group Description and Strategy
Private Client Group (PCG) brings together all of BMO Financial Group’s wealth management businesses. Operating as BMO Private Client Group in Canada
and The Harris in the United States, PCG serves a full range of North American client segments, from mainstream to ultra-high net worth, as well as select
institutional market segments. We offer our clients a broad range of wealth management products and services, including full-service and direct investing,
private banking and investment products, providing the tools they need to accumulate, protect and grow their financial assets. Our goal is to fully leverage
our integrated North American wealth management businesses to provide clients with a full suite of advice-driven and guided offerings. PCG’s total assets
under management and administration, including term deposits, were $282 billion at October 31, 2003.
2003 Group Objectives and Achievements
Enhance our offering to retail and affluent clients through sales force
growth and development, technology enhancement and integrated
product and marketing initiatives.
▪Successfully enhanced client service levels through strategic investment
in building and training our experienced sales force, as evidenced by the
positive results of Full Service Investing’s national client survey completed
in May 2003.
▪Award-winning and recognized leadership in client service:
▪ BMO InvestorLine was ranked number one for the third consecutive time
in Gómez Canada’s Direct Investing Report and for the second straight
year as The Globe and Mail ’s selections as top choice in its online broker-
age ranking report and as best online broker for self-directed RRSPs.
▪Harris direct
®1was ranked in the top quartile in Gómez’s Internet Broker
Scorecard Survey of 20 U.S.-based discount brokers.
▪ Expanded range of offerings to Private Banking’s affluent clients by leverag -
ing the unique service offerings of recently acquired wealth management
businesses.
Expand U.S. wealth management businesses through both selective
acquisitions and organic growth while building on The Harris’ strong
reputation as we expand into targeted new markets.
▪ On November 1, 2002, we acquired select assets of myCFO, Inc., a
California-based provider of customized investment and advisory services
to ultra-high net worth clients, providing The Harris with entry to key
markets in California, Colorado and Georgia.
▪ On January 17, 2003, we acquired Sullivan, Bruyette, Speros & Blayney Inc.
(SBSB), a Virginia-based provider of open-access relationship-based finan-
cial planning, providing our affluent clients access to non-proprietary
products in a comprehensive solutions-based offering.
▪Focus on delivering the highest levels of service and integrated offerings
to our clients by leveraging partnerships within PCG and across BMO
Financial Group.
▪Improve our cash productivity ratio by 150 to 200 bps.
2004 Group Objectives
▪ Pursue opportunities that focus on deepening client relationships and
building momentum in the high-growth affluent market segment.
▪ Enhance our business models by continuing to improve productivity and
invest in our high-growth wealth management businesses.
BMO Financial Group 186th Annual Report 2003 33