Onbancorp, a bank holding company based in Syracuse, N.Y., has signed up with Liberty Securities Corp. to market mutual funds and annuities.
Boston-based Liberty is a registered broker-dealer that specializes in setting up brokerage programs in banks. Over 100 banking institutions throughout the United States use its services.
With $5.1 billion in assets, Onbancorp operates two banks with 61 branches in New York State. It is preparing to acquire Franklin First Financial Corp. in Wilkes Barre, Pa., in a deal that will add 18 branches.
Effective Oct. 1, Onbancorp will offer brokerage services throughout its branch network. It is the last large bank in the Syracuse market to offer the services.
"Onbancorp dominates their marketplace. They are well run and well capitalized," said Robert Spadafora, senior vice president of Liberly Securities. "They know they are competing with the Chases and Fleets of this world, so they had to come in with a package comparable or better than what the competition is offering."
Although the Liberty Securities relationship represents an initiative, Onbancorp is not a newcomer to the world of investment services. Two institutions that Onbancorp acquired from Midlantic Corp. - Merchants National Bank and Trust Co. and Union National Bank - have offered investments since the 1920s as part of their trust operations.
Discount Brokerage Service
In addition, Onbancorp has offered discount brokerage services to its customers since 1988.
"Competitive pressures have put us in this business. All of our competitors are offering mutual fund services," said Robert J. Bennett, chairman, president and CEO of Onbancorp. "We think that offering investment products directly to our customers completes our array of service offerings."
To determine what kind of program the bank should put in place, Mr. Bennett said that he and his staff consulted with branch managers, supervisors, and line staff members.
"Branch talent was our sounding board," he said. "We determined that there was a real need out there in our marketplace."
Mr. Bennett said Onbancorp chose Liberty because the two companies have similar philosophies and corporate cultures. At this stage, Liberty is working closely with the Onbancorp on staffing issues.
"Liberty is currently interviewing investment executives. We have a sign-off process on every potential hire to make sure that the chemistry is right," said Mr. Bennett.
The two institutions will also be introducing new technology at Onbancorp branches to support this program. A PC-based program called Envision will be used to help investment executives create financial profiles of individual customers.
"Envision will look at the different needs of each person and work out a solution, whether it be for retirement planning, college savings, or income maximization," said Mr. Spadafora.
Liberty has also contracted with ADP Systems to provide Onbancorp customers with monthly statements. Mr. Spadafora said that by the end of next year. Liberty and Onbancorp will be sending out combined statements. This will prevent outside mutual fund providers from having access to the names and addresses of Onbancorp customers.
Ms. Sullivan is a freelance writer based in New York.