A new product that targets affluent prospects can take banks a step closer to their nonbank competition, according to its distributor.
CDA/Investnet, a company that has been tracking securities transactions of prominent corporate insiders for a dozen years, has just come out with a data base that lets banks tap some 330,000 affluent shareholders and key corporate employees.
Information made available through the new software, Wealth Pinpoint, is culled from securities transactions - sales of securities, exercise of options, and securities holdings - and updated daily, according to John H. Wright, vice president of CDA/Investnet, Rockville, Md.
CDA is owned by Thomson Financial Services Co., which also owns American Banker.
Some skeptics, however, say the product may not work for many banks.
Paul Groncki, a vice president at Payment Systems Inc., a Tampa-based firm that tracks the affluent market, said the leads found through Wealth Pinpoint are "independent-minded" investors.
Those investors, he said, are savvy and may not be persuaded to buy services from a bank.
According to Mr. Wright, Wealth Pinpoint users can categorize affluent prospects in the following ways: name, address, total net worth, sales activity, total equity holdings, and dollar value of options.
"A lot of people get wealthy from stock options," said Mr. Wright, adding that the average security sale recorded by Wealth Pinpoint exceeds $600,000.
Mr. Wright has shopped his company's product to the private banking and trust departments of several banks. He declined to name them but said one, a major Northeast bank, has signed on.
Mr. Wright said his company had developed Wealth Pinpoint after being approached by several banks that wanted to find out how to increase their leads.
Nonbanks have used information from securities transactions to prospect affluent investors for years, according to Mr. Wright.
Major brokerage firms, for example, have been able to buy, also from CDA Investnet, a monthly list of insider securities transactions.
And besides brokerages, Mr. Wright's company has also done similar transaction searches for nonprofit organizations, matching them with affluent potential contributors.
The cost of Wealth Pinpoint, according to Mr. Wright, can be as low as $2,500 a month per computer terminal for a smaller bank, to $5,000 for a larger bank. The fee includes unlimited searches.