Quick & Reilly, one of the biggest names in discount brokerage, has struck a deal to market its wares through a tiny Florida bank.

The arrangement with $40 million-asset Admiralty Bank marks the first time that the nation's third-largest brokerage firm has housed an office in a bank branch.

Till now, Quick & Reilly has had limited dealings with banks. It handles securities clearing for about 75 banks through its U.S. Clearing Corp. subsidiary, and it bought brokerages from two regional banks in 1990.

Quick & Reilly, which has 825,000 clients nationwide, said Tuesday's opening in the Palm Beach Gardens headquarters of Admiralty Bank increases its branch network in a strategically important market at minimal cost.

"It's really the best of both worlds," said Thomas Quick, president of the New York-based firm. "We can grow our franchise and not get involved with bricks and mortar, which the bank is providing as part of the deal."

Though Quick & Reilly executives insist they have no grand plan for expanding through banks, the move nevertheless signals new territory for discount brokerage firms. It also underscores the importance of brand names in investment product marketing.

"Their name is known, sort of like a Charles Schwab," said Keith Duffy, president of Admiralty Bank. Quick & Reilly ranks just behind Charles Schwab & Co. and Fidelity Investments in the business.

The pairing of Quick & Reilly with the community bank startled some industry analysts.

"Most banking clients want advice, so it's a bit surprising that a discount broker like Quick & Reilly would be the choice for this service," said Ed Mungenast, president of SCI/Dover, a Boca Raton, Fla., consulting firm to bank broker-dealers.

But, he added, "a smaller bank provides the opportunities to put an infrastructure into place or to be used as a prototype."

In contrast to Quick & Reilly, Charles Schwab hasn't had an office inside a bank since it was owned by Bank of America in the mid-1980s. At that time, it maintained a branch in the bank's headquarters, said Tom Taggart, spokesman for Charles Schwab.

Schwab has since concentrated on stand-alone and mall locations. "There's no reason to dilute our brand name by being in the lobby of a bank," Mr. Taggart said.

Admiralty approached Quick & Reilly in June, after severing its brokerage relationship with Bankers Financial Partners, Baltimore. Mr. Duffy cited Quick & Reilly's reputation for quality and its name- recognition among consumers as key reasons for the partnership.

Having a Quick & Reilly office in the bank lobby should pull in new clients for Admiralty, Mr. Duffy said. "When they have to walk through the lobby, hopefully, they'll find it's convenient to open up an account (with us) and do everything in one location."

In a nod to the bank's concerns that the broker not cannibalize existing deposits, Quick & Reilly will limit its sales efforts of money funds.

Mr. Duffy says he is confident the brokerage business will provide Quick & Reilly with adequate income without treading on the bank's turf.

But whether business volume in a community bank will support more than an experiment remains to be seen. "There will always be little old ladies who want T-bills," said Glen Casey, consultant at Cerulli Associates, Boston. "But as far as generating larger transaction volumes, at this point, it's very unclear."

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