Mitchell Caplan, the chief executive of E-Trade Financial Corp., has the air of someone who has finally accomplished a long-held ambition.
Five years ago Mr. Caplan sold the online bank Telebanc Financial to E-Trade because he believed it could not succeed as a monoline. He wanted to offer an integrated product that would combine trading, investment, and bank services, and E-Trade was looking for a way to get into banking.
With the launch of E-Trade Complete last week, he seems to have achieved his mission.
"What I love about Complete is that … in many respects it is the embodiment of my career," Mr. Caplan said.
But the best way to cross-sell such integrated accounts is to start with retail trading clients rather than banking customers, he said, so E-Trade's new advertising campaign, launched last week, targets those core customers.
"The power is in true integration, and that power comes with the retail investing customer," Mr. Caplan said.
E-Trade Complete combines a customer's trading, investing, cash, and debt accounts. He said customers can manage, on one page, all of their assets to get the maximum yield from the array of products his company offers.
Others have launched such bundled services, and this is not E-Trade's first attempt, but Mr. Caplan is hopeful that it will stand out with self-directed customers.
A lot is riding on Complete. The New York company realigned its business units - focusing on retail and institutional customers rather than brokerage and banking - reshuffled management responsibilities, and raised its advertising and marketing budget 75% from last year, to $146 million, to pay for a blow-out campaign.
Complete is aimed at 46 million households with $50,000 to $500,000 of investable assets - "serious investors" who Mr. Caplan says are largely ignored by Wall Street brokerages.
E-Trade has about 3 million customers, most of whom fall into that category, he said. The company wants these traders' checking and savings accounts, mortgages, and home equity lines. (Only about 600,000 of its customers currently bank with E-Trade - though nearly half of them are also brokerage customers.)
Though E-Trade may lose some revenue in the short run - if a customer using Complete's "cash optimizer" function moves funds to a higher-interest-bearing product, for instance - Mr. Caplan said the product will pay off in three years, when the company has more of customers' assets.
E-Trade is not a pioneer in trying to sell banking and trading. In 2003, Charles Schwab Corp. built a bank from scratch to capture more share of customers' wallets. Richard Musci, the chief marketing officer for the Reno-based Charles Schwab Bank, says it has been "hugely successful."
Last fall Schwab rolled out a product, called Pledge Asset Mortgage, that lets certain high-net-worth customers pledge securities with the San Francisco broker-dealer as collateral for a down-payment loan.
Mr. Musci would not discuss E-Trade Complete but said consumers like the idea of combining their brokerage and banking business. However, he said, companies like his, which offer branch-based as well as online services, have an edge.
Merrill Lynch & Co., which introduced the cash management account in 1978, expanded its retail bank in January 2003. The New York firm has since rolled out several products, such as a Visa credit card and a loan management account offering different types of securities-based loans, including line-of-credit and term loans.
Bank-owned brokerages are also getting into the cross-selling game. Last month, Citigroup Inc.'s Smith Barney Inc. began letting customers conduct bank transactions at Citibank branches and automated teller machines through their brokerage accounts.
But Mr. Caplan said E-Trade Complete is as innovative for investors today as Merrill's cash management account was decades ago. That account "shifted the marketplace," he said. "I believe what we have is equally unique and interesting."
Unlimited refunds of ATM fees, free checkbooks, and ease of transactions are just some of the perks that E-Trade hopes will entice serious investors and active traders (those who trade at least five times a month) to switch more of their money management business.
The firm aims to appeal to customers' willingness to be hands-on in managing their money, a trait that Mr. Caplan says characterizes this generation of investors.
At an industry gathering early last month, Lou Klobuchar, then the president of E-Trade's newly formed retail division, criticized competitors that he said had built their business models on "customers' fragmented attention" - having accounts in different places. That is not a good strategy for long-term growth, he said. (Mr. Klobuchar has since left E-Trade, for personal reasons, the company said.)
Setting the tone for the investors E-Trade hopes to attract, the new marketing campaign differs from those of the 1990s, when it used a monkey in some commercials.
"Irreverence has been replaced by intelligence," said Nick Utton, E-Trade's chief marketing officer and the campaign's main architect, who also designed MasterCard International's "Priceless" campaign in 1997. The tag line, "be e-traordinary," is meant to appeal to the desire to excel while touting E-Trade Complete competitive price and rebates, he said.
Though Mr. Utton said he did not design the campaign to disparage rivals, one of the ads still manages to take a swipe. "If you want ordinary," it says, "go to Wall Street."
But an executive in a rival company, who asked not to be named, said he was not impressed with the product. E-Trade Complete is more hype than groundbreaking, he said; anyone can read a newspaper to find out where to get the best rates.
Wall Street analysts have viewed the product more favorably.
Campbell Chaney of Sanders Morris Harris said E-Trade has defined an integrated solution for the self-directed consumer. Schwab has all the tools, he said, but is still trying to restructure itself, and E-Trade has a fairly large head start.
Richard Repetto of Sandler O'Neill & Partners LP said Complete should strengthen E-Trade's ability to retain investors and their assets.
It is also a way to offer bundled pricing, Mr. Repetto said - to let a profitable mortgage customer, for example, get trading discounts that would otherwise not be available. Whether customers will take to the new platform is the big question, he said.
But Mr. Caplan insists that they are ready, and that the opportunity is huge.
