Title: A Hands-Off Approach to Offering Investments; Too Small for an In-House Rep? Try Brokerage by Phone
Abstract: Too small for an in-house investment rep? Try brokerage by phone Some small banks want to offer investment products, yet realize they can't generate enough sales to support a full-time investment rep in the bank. An option for them is to offer customers a number to call to make their investments. Several third-party marketers offer this type of service to banks. This is our only option, says Herbert E. Heger, president of BayBank, a $38 million-assets institution in Gladstone, Mich. It's too expensive for a bank under $100 million to hire someone to do this, he says. The other bank in town, which is much bigger than BayBank, does have an in-house rep, as do much larger competitors in the other two Upper Peninsula communities BayBank has branches in. They obviously have seen some diamonds where I have not, Herger says. As for sharing an investment rep with other banks in the area, as some community banks do, Herger says, would be like sharing a fox. He doubts that someone with integrity would intentionally steal his customers, but in the town of Gladstone, population 4,500, everybody knows everybody and the two banks are very competitive. It would be difficult for us to advertise that we have an investment rep available and have our customers think, 'Didn't I just see him working at the other bank?' Heger says. BayBank provides investments by phone through a service called Wall Street Connection provided by Wall Street Investor Services, the firm ABA has endorsed. Interested customers are either given the Wall Street Connection phone number of agree to let Wanda Baniak, the investment counselor who primarily works with the bank, call them. Baniak feeds customers' financial information into a computer program that helps her make investment suggestions. She can offer mutual funds, annuities, stocks, bonds, and retirements plans. Wall Street Investor Service takes care of disclosures, suitability, account review, and other legal requirements. Customers don't seem to mind revealing their personal financies to a stranger over the phone, because the bank referred her. If they had received a cold call from Wanda, they woulde have hung up on her in a minute, Heger says. But because we've been involved, their perception is a little different. Referrals, not sales Everyone in the bank has received some training so that they can refer customers to the Wall Street Connection. We didn't try to give employees selling skills, because they're not sellers, Heger says. …
Publication Year: 1994
Publication Date: 1994-06-01
Language: en
Type: article
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