Vying with Banks, Cigna Brokerage Hits the Streets

Cigna Financial Services, the year-old discount brokerage subsidiary of insurer Cigna Corp., is reaching out to the investor on the street.

The unit today is to open its first storefront outlet right in its backyard of Hartford, Conn. The investment center, which augments service available by phone, is targeting middle-income investors, including those who now favor banks.

"We can give them CDs plus a lot more," Will Bashin, president of Cigna Financial, said in an interview. The center, he said, will offer one-stop shopping for stocks, Treasury bonds, mutual funds, and deposit accounts.

The effort, which Cigna eventually may expand to other sites, is another sign of the hot competition among banks and brokerages for the allegiance of retail consumers.

There's a growing convergence in the roles played by banks and brokerages, from the consumer's standpoint, Mr. Bashin said.

Despite its relative youth in the business, Cigna seems to be going in the right direction, said Les Dinkin, a consultant at NBW Consulting Group, Westport, Conn.

"Most of the major discount brokerage firms have established a level of retail presence," said Mr. Dinkin, who cited the Big Three discounters- Fidelity Investments, Charles Schwab & Co., and Quick & Reilly-as examples.

Of Cigna's efforts, he said, "it will be very interesting to watch them and see how they do."

Mr. Bashin said Cigna's decision to target the middle-income investors working in downtown Hartford came after extensive research. An in-house study showed that "people with moderate income levels still have a pretty substantial investable asset base," he said.

The firm will target investors with annual household incomes of $40,000 to $100,000, he said.

Before today, Cigna investors could reach the firm only through a toll- free number at its Hartford call center, where the fledgling brokerage operation employs 100 people. But the insurer, taking its cue from many competitors, is expanding its distribution system.

For instance, the brokerage has launched a Web site. For now, it only provides information, but the firm plans to add interactive trading capabilities in the first quarter.

Cigna also offers more than 4,000 mutual funds from more than 70 fund families and has its own version, called CignaSource, of Charles Schwab's OneSource, a no-load fund supermarket. There, investors can choose among 350 no-load, no-transaction-fee funds.

Last April, Cigna rolled out its Asset Maximizer account, which offers customers check-writing and a gold card through United Missouri Bank. The account requires a minimum $5,000 deposit but charges no annual fee and offers free check-writing.

"They have a lot of good models to follow in the marketplace from experience that's worked for other people," NBW's Mr. Dinkin said.

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