Salomon Smith Barney Inc. is seeking to increase its presence in banks as a third-party provider of investment services.
Salomon plans to assign another 30 financial consultants to banks by the middle of the year, bringing its total to 47, said Jeffrey H. Champlin, the director of the Salomon Smith Barney Bank Investment Centers program.
The company wants to have 300 financial consultants in banks within three years, Mr. Champlin said. "We haven't wanted to grow very fast until now," he added.
He said Salomon's growth in the third-party marketing business has not been hampered by its new banking parent, Citigroup. Most of Salomon's clients are small banks that do not directly compete with Citibank, Mr. Champlin said, and there are no plans to put Salomon investment centers in Citibank offices.
Salomon, which launched its bank brokerage program in November 1997, runs investment centers for 15 banks in 12 states and in Guam and Puerto Rico. And it has contracts with a handful of banks to begin providing brokerage services in the near future, Mr. Champlin said.
Salomon cherry-picks most of its clients using a range of criteria and plans to promote itself primarily through internal channels. The company does not advertise extensively. "We're very selective about the banks that we work with," Mr. Champlin said, "but if a bank has an interest in us, we would certainly like to hear from them."
He declined to outline the criteria but said Salomon examines whether a bank's client base can support an investment product program.
In mid-March, Salomon began relying on its 450 branch managers to determine each region's potential for growth through banks. Salomon then would analyze the market and select a partner.
"We're going to look at each market area separately and determine whether we're better off having one or two or three brokers in small, community banks or whether we're better off aligning with a larger bank where there may be 20 financial consultants throughout their whole system," Mr. Champlin said.
To find the right partner, Salomon may approach two or three banks in an area. "Many times it's a close call," Mr. Champlin said.
Los Alamos (N.M.) National Bank, which heard about Salomon through word of mouth, converted its brokerage in July from PrimeVest Financial Services Inc. of St. Cloud, Minn.
Salomon offered better technology and local back-office support, said Sharon H. Watson, a vice president who heads the trust department.
The bank is pleased with the choice, but it does not believe one broker is enough to serve customers adequately, she said.
"I think they underestimated the traffic, the extent to which people want to stop in at lunch to say 'hi' to their broker," she said.