CHICAGO - FleetBoston Financial Corp. wants more assets from wealthy investors and is turning to its Quick & Reilly brokerage unit to get them.
On Dec. 1, Quick & Reilly will roll out the first phase of an aggressive campaign to woo high-income, investment-oriented families, said Thomas C. Quick, president and chief operating officer of the Fleet Securities Inc. division.
"This is probably one of the biggest initiatives at FleetBoston this year," Mr. Quick said in an interview Wednesday after his keynote address at American Banker's Financial Services in Cyberspace conference.
The lucrative market of self-directed investors is at the top of the list for most banks. FleetBoston says the expertise it gained when it acquired Quick & Reilly three years ago will give it an edge.
FleetBoston has brought the four broker-dealer units of the pre-merger Fleet Financial Group and BankBoston Corp. into a single division managed by Quick & Reilly. In addition, Quick & Reilly's SureTrade unit, which targets very active investors by offering them low-cost trades, will join the new group.
The combined operation is in charge of a meaty target market: people with $150,000 to $1 million to invest. FleetBoston estimates that 23% of U.S. households meet its definition of "investment-oriented." Only 2% of those households are now FleetBoston customers, Mr. Quick said.
In a departure from its usual practice of pushing the Fleet brand, FleetBoston will keep the Quick & Reilly name front and center. With other Quick & Reilly businesses it acquired, such as the clearing and market-making units, FleetBoston acted quickly to remove the name.
FleetBoston discovered through its own research that "consumers want to work with a broker, not a bank, when making investment transactions," Mr. Quick said.
Nevertheless, Fleet's online banking and brokerage services are fully integrated. Users need log on only once to gain access to their FleetBoston and Quick & Reilly accounts and can move funds between them, pay bills from either, and use combined balances to avoid fees.
Among other points Mr. Quick made in the interview:
- FleetBoston "came through" in providing electronic bill payment and presentment, the features that brokerage customers who were polled said they wanted most. Its online banking service, HomeLink, has become its "single largest source of new brokerage customers," , Mr. Quick said.
- Combining banking and brokerage services online is the first step in FleetBoston's plan to excel in what Mr. Quick said will be "the next competitive battlefield" - the building of Internet portals that integrate a full range of financial services. "The race is on to be the first place clients visit for all financial services," he said.
- FleetBoston plans to tap its Robertson Stephens investment bank to provide access to initial public offerings as well as research and advice. "Investors can't get enough of third-party research," Mr. Quick said.
(Nor can they get enough of the Internet, according to statistics Mr. Quick cited. In 1998, he said, just one-fourth of Quick & Reilly's 14,500 daily trades were conducted over the Internet. During the first six months of 2000 the ratio was reversed, with 70% of the average day's 38,000 trades completed through the Internet.)
- About 40% of Quick & Reilly customers who normally trade through brokers now also trade on the Internet, compared with 23% a year ago.