Five banks have signed up to use a Pershing Trading Corp. product designed to make buying and holding subscription products such as fixed- and variable-rate annuities less of a headache.
First Chicago NBD Corp. and Birmingham, Ala.-based Compass Bancshares are among the banks now using Subscribe, said Alton C. Jones, a managing director at Pershing. Subscribe was rolled out this month.
Twenty other financial institutions that clear through Pershing, a subsidiary of Donaldson, Lufkin & Jenrette, are also using the product, which allows correspondents to purchase, service, and maintain products electronically and for free.
Subscribe settles the purchase by debiting the cost from the brokerage account, pays the annuity company, and confirms the price. The asset is then recorded by Pershing's system "so that our brokers can see it on their screens, can see the underlying changes and values ... which change daily," said Mr. Jones.
Previously the broker sold the annuity to the customer and sent the application to the annuity company, which then sent the customer a confirmation, Mr. Jones said. However, the broker had no access to that information on a monthly or daily basis.