First Union Corp. is introducing its successful CAP account, which combines banking and brokerage services, to Wheat First Union, one of its retail brokerages.

Wheat First Union, a unit of Wheat First Securities Inc., started offering the CAP account Dec. 7 to 800,000 clients in Washington, D.C., as well as in 12 states where it is already available through the banking company and 12 states where only the brokerage operates.

First Union, based in Charlotte, N.C., bought Wheat First in February.

"It gives First Union the chance to get checking accounts and deposit accounts that are currently at a different banking institution," said John C. Walters, president of the First Union financial services group, which designs products and marketing for Wheat First and the bank's existing retail brokerage.

"If you're a Wheat client and have a CAP account, you can go to any of the green First Union signs and get your money," he said.

In a similar cross-selling vein, Wheat First brokers in Washington began promoting the bank's lending in May under a pilot program that has been expanded to include 350 brokers there and in Maryland and Virginia. This drew applications for $300 million of loans.

First Union plans to maintain separate brokerages, though Richmond, Va.- based Wheat First and the banking company overlap in much of the Southeast. Wheat First Union is for traditional brokerage house clients, and First Union Brokerage Services is for the bank's customers.

An internal study found an overlap of only 4,500 customers among the one million First Union brokerage account holders and 600,000 Wheat First customers. States where only Wheat First operates include California, Massachusetts, and Texas.

Before the CAP account, Wheat First offered limited asset management accounts, called Capital Resource Account and CRA Gold, which included check writing and credit cards.

"No traditional brokerage firms have ever been able to fully implement a banking-equivalent" asset management account, Mr. Walters said.

The annual $85 fee on a CAP account is waived for accounts with balances exceeding $250,000 in any combination of cash, stock, bonds, and mutual funds. A $15 monthly fee is imposed on accounts that dip below $15,000. The account offers sweeps to money market mutual funds from demand deposits as well as no-fee Visa credit and debit cards.

This year First Union has been opening about 20,000 CAP accounts a month, raising its totals as of Nov. 30 to 400,000 account holders and $35 billion-a 42% rise in 12 months.

The CAP program was launched in 1985, but demand heated up after heavy promotion in 1997 during the banking company's rapid geographic expansion.

Several banks-inspired by the CAP account, some observers have said-have been rolling out asset management accounts to attract investment business. Similar accounts were introduced this year by Crestar Financial Corp. and NationsBank Corp., now BankAmerica Corp.

And during the summer, Fleet Financial Group started to bring its combination account to customers of Quick & Reilly, a discount brokerage it bought in January. The account was renamed Fleet One Gold after brokerage services were added.

Fleet's brokerage customers got mailed promotions for Fleet One Gold when their accounts were converted recently to Quick & Reilly, which operates in 38 states.

Customers of Quick & Reilly who live in the Northeast, where Fleet operates retail branches, are getting statement stuffers about Fleet One Gold, said Kirk Stumpp, vice president of marketing for the brokerage.

"Our plans are to become much more active," he said, adding that next year "we intend to use a lot more data base technology to aggressively cross-market."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.