Norwest Corp. is bringing discount brokerage to the masses.
In a pilot program launched last week, the Minneapolis-based banking company stationed two discount brokers in an unused teller cage in its headquarters building. Until now, the bank's discount brokerage services were available only by telephone.
Dubbed an "investor convenience center," the self-contained two-window teller counter faces one of the busy enclosed walkways that link buildings in downtown Minneapolis.
More than 50,000 people stroll by each workday, Norwest said, as they navigate a network of elevated "tunnels" that create a virtual mall and sanctuary from the city's notorious winters.
Norwest is testing whether the walk-up windows, which offer only brokerage services, attract enough business to replicate elsewhere. Like a supermarket branch, the walk-up center is cheap to operate and takes advantage of steady foot traffic to reach brokerage customers outside a traditional bank branch.
"We've got nets out, and we expect to get a little bit of everything," said David J. Kasper, executive vice president of Norwest Investment Services, the bank's broker-dealer. "I expect to get more nonNorwest than Norwest customers."
The discount brokerage unit's in-person location had its grand opening last Friday. One of its first customers was Norwest chief executive Richard M. Kovacevich, who stopped by for the grand opening and later asked how long it would take to reproduce the center elsewhere, Mr. Kasper said.
Richard Ross, an investment products sales consultant based in Glencoe, Ill., praised the bank for reaching out to customers who rarely visit branches with an outpost that broadcasts that Norwest is in the retail securities business.
"If you put a product that people aren't aware of in a high-traffic location, you're going to get some sales," he said.
In two weeks, the pair of Norwest brokers have opened 18 accounts. And a couple of them have been whoppers, including impulse transfers of some sizable individual retirement and brokerage accounts from other institutions, Mr. Kasper said.
"I don't think we'd have snagged those relationships if we weren't in plain view," Mr. Kasper said. "We're prompting them to act."
So far, Norwest has relied on free bagels in the morning, complimentary popcorn in the afternoon, and 4,000 coupons for 50% off securities trades to attract potential customers.
This fall, Mr. Kasper will tout the center in a direct-mail campaign. During slow times, the brokers will call customers who haven't traded recently to drum up more business, Mr. Kasper said.
At Norwest, the program may be small potatoes now, but it's just one piece of a company mission to have investment products and trust and insurance services contribute 25% of company profits by 2000, Mr. Kasper said.
"Just in Minneapolis alone," Mr. Kasper said, "we could add $1 million in revenue ... within a year from now."