Small businesses have always been a lucrative niche for banks, but until recently few have taken steps to cross-sell investment products to them.

Now some banking companies are looking to reach the small-business market with their investment sales units by developing products and services for needs such as retirement and succession planning.

In the second quarter Huntington Bancshares of Columbus, Ohio, plans to introduce two dedicated investment sales forces in its brokerage unit. One will work with companies with sales of $10 million or less, the other with clients with more than $10 million.

Huntington's 120,000 small-business customer base is simply too big to leave untapped, said Rob Comfort, who heads the brokerage unit. "We're not getting a lot of the business from these customers that we should be."

The company is still working out the details, but it plans to hire a number of investment salespeople who will be assigned to work with business lending officers. The officers already have relationships with the small-business clients, so they would be the logical contact for clients, Mr. Comfort said.

Huntington also plans to offer business insurance for small businesses, including proprietary insurance products that are still under development, he said.

Huntington is not the first institution to cross-sell investment products for retirement and other needs to its small-business customers.

PNC Advisors, the wealth management arm of Pittsburgh's PNC Financial Services Group Inc., has been doing so for over three years, and Chase Manhattan Corp., now part of J.P. Morgan Chase & Co., has been doing so for just under a year.

Chase's small-business officers refer customers to the small-business investment services division, where dedicated teams of in-house investment specialists, including financial managers, stock brokers, and retirement sales specialists, work with clients on their personal and business investing needs.

However, K.S. Ramdas, the senior vice president who heads the unit, said it has not had an easy time cross-selling such products to small-business clients. "It's been a learning experience."

The biggest challenge has been convincing Chase's small-business clients - owners of companies with annual revenues of less than $3 million - that its small-business investment services are as good as its banking services, he said.

Mr. Ramdas said that newer business owners tend to be more open to hearing about all of Chase's services, including the investment services, but he is hopeful he can change the thinking of some of the older, more established clients.

The unit's goal is to sell investments to 25% of Chase's small-business clients by the end of next year. While investments and retirement products have both drawn business, penetration among the company's small-business clients is in the single digits so far, Mr. Ramdas said.

Kenneth R. Hoffman, president of Optima Group Inc., a Fairfield, Conn., financial services consulting firm, said that making such a cross-sell has not been a priority for many banks, which simply have not concentrated on the small-business market when it comes to investment product sales.

Optima typically dissuades its bank clients from offering 401(k) plans to small-business clients, because it tends to be very difficult and expensive to make money in that market, Mr. Hoffman said.

Ronald L. Bush, a principal of Brightwork Partners LLC, a financial services consulting firm in Greenwich, Conn., said that because the small-business market is so large - there are about eight billion small-business owners in the United States - investment products have the potential to be one of the more lucrative cross-sell opportunities.

But small-business owners don't tend to look at a bank-affiliated financial adviser as a first choice for their business investment needs, Mr. Bush said. They are more accustomed to working with stock brokers and independent financial advisers for their personal investment needs, he said.

Research by Brightwork and Greenfield Online Inc., a market research firm in Wilton, Conn., found that owners of small businesses are unlikely to turn to a bank - even the one that takes care of their other needs - for help in choosing a retirement plan for the business.

Brightwork and Greenfield Online polled 1,400 owners of businesses with between one and 100 employees and found that they strongly prefer to work with independent financial advisers for their individual investments and for their employees' retirement needs.

Only 10% of those polled said they preferred to work with a financial planner who works for a bank, brokerage firm, or insurance provider, while 37% preferred to work with an unaffiliated financial planner, and 20% a benefits consultant.

Gail C. Graham, managing executive of PNC Advisors' private client group, said it trains its banking and investment professionals who work with small-business clients to focus on situations such as succession planning or liquidating business assets, rather than on selling products, and they make their referrals accordingly.

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