MINNEAPOLIS -- After a successful trial run in two Minnesota branches, First Bank System plans to place certified financial planners in several more offices.
The Minneapolis-based banking company expects by yearend to roll out the program at branches in a mid-sized market, bank executives said. Under consideration are First Bank System branches in Fargo, N.D., and Colorado Springs, Colo.
This follows a pilot program begun in April with IDS Financial Services, a subsidiary of American Express Co.
The results of that venture, which placed financial planners in two branches, "have been very positive," said First Bank System vice chairman William F. Farley. He declined to disclose details on sales, however.
Ultimately, First Bank may very well extend the service from the couple of branches to a couple of hundred, he said.
The venture, in which IDS and First Bank split revenues down the middle, is the boldest foray yet by a bank into financial planning.
Customers will be able to call on financial planners in branches to create investment blueprints. The plans, which start at $530, will be implemented with products from IDS, First Bank, and other investment suppliers.
First Bank decided that the IDS-trained planners will be identified as employees of FBS Investment Services, the bank's investment product marketing arm.
First Bank chose this route after using an IDS-identified planner and a bank-identified planner during the pilot program.
Both planners had the same credentials, but customers took to the bank representative a bit better, Mr. Farley said.
If anything, IDS's name recognition was too strong, he said. "Customers would say, |I already know an IDS planner and if I wanted IDS I would go with him."
Mr. Farley declined to disclose how much business the program is doing, or what expectations the bank has for the future of the joint venture with IDS.
Dollar volume, he maintained, is just one consideration. "Our goal is to build a plan-based sales environment as opposed to a more transactional one," Mr. Farley said.
This means First Bank's brokers, who often offer guidance to customers, will be elbow-to-elbow with financial planners who prepare more comprehensive frameworks.
Industry experts say this may not be easy.
"Certainly there are opportunities," said Marcia Selz, president of Marketing Matrix, a Los Angeles firm that gauges bank customers' attitudes, "But there is that question. Will there be a duplication of efforts?"
Mr. Farley maintains that the groups can indeed coexist, since "different customers have different needs."