Six months after the May 1 effective date of U.S. Bancorp's purchase of Minneapolis-based Piper Jaffray, Piper reps are optimistic about the new firm.
In December 1997 when the acquisition was announced, "everyone was cautious, " says Bob Wolter, branch manager of the Phoenix U.S. Bancorp Piper Jaffray office. Reps wondered "whether there would be a culture gap between a bank and Piper Jaffray," but they have "thrown their caution out the window" after seeing concrete examples of how the union is going to work, Wolter claims.
The bank set up Piper Jaffray as an independent subsidiary. "We have the same senior management making decisions," Wolter says. "Tad Piper is still the chairman of Piper Jaffray."
"It's business as usual," adds Scott Larson, a U.S. Bancorp Piper Jaffray broker in Waterloo, Iowa.
Not all reps see it that way, however. A U.S. Bancorp Piper Jaffray broker in the Midwest says: "We were originally told that Piper would retain its identity. But Piper funds and the Piper trust have been absorbed into U.S. Bancorp." Combining the two firms is "like gas and water; it doesn't mix."
One difference: U.S. Bancorp's lack of expediency. "Bankers are paid a salary, so it doesn't matter how quickly they do something," the Midwest rep says. "Brokers aren't. We put calls into the trust department and never get a call back."
Some reps are more upbeat about the combination. "The bank is strong in trust services and liability products such as mortgages and lines of credit, " says Brad Fisher, a U.S. Bancorp Piper Jaffray branch manager in Kennewick, Wash. And Larson says he's gotten good referrals from the bank.
The firm is starting to roll out "pretty attractive" referral fees for 401(k) and trust business, Wolter says. The firm also is test marketing a mortgage program in Portland, Ore., and it will be introduced firm-wide next year, he says.
However, the Midwest rep says he hasn't seen any referral fees. And when he tried to establish a trust for a client through U.S. Bancorp, the client was told the rep could no longer handle the account. In addition, he says the firm sent letters to his clients about bank services, which he found out from his clients. "It has not been an easy fit," he adds.
There has been a "mass exodus" of Piper Jaffray operations staff, the Midwest broker says. "But they dangled carrots" in the form of bonuses to "hold the brokers" at the firm.
The bonuses were not intended as a retention package, Wolter says. "It was a wealth-building package. It wasn't enough money to keep people around; it was more of a thank you."
Reps' concerns about another compensation issue--their retirement plan--have been settled, Wolter says. "We had an ESOP that was a high percentage of annual compensation. That disappeared with the merger. But they rolled out the new plan in August, and there was an even greater contribution. It sends a good message that the bank wants to take care of its people."