Dreyfus Corp. has begun offering discount brokerage accounts to its customers.
The accounts, which were first made available in a handful of Dreyfus offices earlier this month, are intended to broaden the kinds of investments the New York-based mutual fund company can sell.
Previously Dreyfus sold only its own mutual funds. By teaming with a discount brokerage subsidiary of Mellon Bank Corp., which bought Dreyfus earlier this year, the mutual fund giant is able to deal in other securities.
"We're very enthusiastic about this opportunity," said Henry D. Gottmann, executive vice president of Dreyfus' marketing unit.
"We see it as a way to really penetrate the customer relationship and provide additional services to our [mutual fund] shareholders," he added.
For example, with the service Dreyfus can help customers sell securities to raise cash to buy Dreyfus funds. Previously, the customers had to deal with other brokers to do this.
The arrangement also could help Dreyfus compete with other mutual fund companies, said Geoffrey H. Bobroff, a mutual fund consultant in East Greenwich, R.I.
This is because many brokerage firms sell mutual funds that rival Dreyfus funds. Similarly, some big mutual fund companies -- including Fidelity Investments -- offer brokerage services.
Dreyfus began test-marketing discount brokerage services two weeks ago in financial centers in midtown Manhattan, and in Florida at offices in Coral Gables and Boca Raton, Mr. Gottmann said.
If the tests go well, Dreyfus plans to make the discount brokerage service available in all of its financial centers by the end of January. At that time, Dreyfus expects to operate 26 financial centers in major cities around the country, up from 24 now.
Dreyfus is also considering making the brokerage service available through other outlets, including personal advisers who deal with high-net-worth investors by telephone.
Investors who use the discount brokerage service in the financial centers will be hooked up by telephone with Mellon's InvestNet brokerage subsidiary, which employs 60 brokers. The brokers will execute customer orders but not recommend investments, Mr. Gottmann said.
