In an attempt to snare investors from nonbank competitors, KeyCorp plans to open five storefront brokerage offices.
The offices, called Key's Investment Centers, will be reminiscent of discount brokerages, with running tickers and television monitors offering up-to-date stock and business information. They will be in all of KeyCorp's existing markets.
"People are demanding more out of investment products than traditional (bank) products," said Jack Kopnisky, president of Key Investments Inc., Cleveland.
Industry consultants say KeyCorp's approach is a novel one, but its success will depend largely on the execution and resources the bank commits to the project.
Bruce Wheeler, vice chairman and a partner at Omega Performance, Sausalito, Calif., said the plan should help KeyCorp take advantage of its physical distribution - the advantage banks have over discount brokerages.
"Schwab and Fidelity have used the mail and phones better than banks, and now have a physical presence as well," Mr. Wheeler said. "Banks would be making a mistake if they didn't use their physical advantage."
KeyCorp's Mr. Kopnisky said the offices will be modeled after those of Charles Schwab & Co. and Fidelity Investments rather than similar efforts by banks. That's because KeyCorp considers the brokerages, rather than banks, its competition. The first office is scheduled to open in Seattle in November.
The program's timing is good, said Mr. Wheeler, because baby boomers, who are sending their children to college and are concerned about their own retirement, have investing on their minds.
"With the evolution of 401(k) plans and mass education in the investment world, it's no longer just high net worth individuals looking to build a nest egg," he said.
Richard Ross, an investment products sales consultant in Glencoe, Ill., said that while KeyCorp's venture has potential, "the brokers in their offices will have to be significantly aggressive at generating their own business, and they will probably need to have a consistent communications campaign in local markets to build local awareness of the office's existence."
By putting the offices in its existing markets, Mr. Ross said, KeyCorp will be able to take advantage of its name recognition, which should bring in foot-traffic that an unknown brokerage would not get. He likened this to Schwab, which has built up enough name recognition that people now look for its offices.