Magazine article American Banker

Primevest Buys Oregon Rival to Expand Westward

Magazine article American Banker

Primevest Buys Oregon Rival to Expand Westward

Article excerpt

Primevest Financial Services. a leading provider of investment products for banks, has acquired Prime Financial Group, a small rival that specializes in fixed annuities.

Under the deal, Primevest, based in St. Cloud, Minn., takes over service contracts that Prime Financial, Portland, Ore., held with a 15 banks. Terms weren't disclosed.

Primevest hopes to add mutual funds and individual securities to annuity programs at the 15 banks, said Primevest president Stephen H. Fischer.

The purchase also positions Primevest to beef up the modest annuity business it does with existing clients, Mr. Fischer said.

Consolidation Trend

The deal is the latest example of a consolidation sweeping "third-party marketers" of investment products. These companies provide products and other marketing support to banks, receiving in return a share of the commissions that banks earn.

Smaller marketers, lacking the resources or product mix to compete, are increasingly being absorbed by bigger companies, said Kenneth Hoffman, president of Optima Group, a Milford, Conn., consulting firm.

Just last month, CoreLink Resources of Northern California bought out crosstown rival Chandler/Burdt.

The latest deal is the second in six months for Primevest. Earlier, it bought Heartland Banking Services, a smaller Minneapolis-based investment product provider.

Push in Annuities

Primevest, owned by Minneapolis-based Kinnard Investors, currently does business with more than 600 banks. Assets of the clients range from $15 million to $10 billion.

In acquiring Prime Financial, Primevest clearly was drawn by the opportunity to boost its presence in annuities.

"We've wanted to do more with annuities for some time," Mr. Fischer said.

Right now, annuities account for less than 15% of Primevest's sales, with individual securities and mutual funds making up the rest. …

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