Two former executives of PrimeVest Financial Services Inc. are about to start an investment products marketing firm.
Fintegra LLC, Minneapolis, should be operating by mid- to late August, said president Doreen L. Strand. Michael G. Lenzmeier is chief executive.
"We see that the market among third-party marketers has really changed substantially," Ms. Strand said, referring to several insurance company purchases of firms. PrimeVest, for example, was swallowed up by ReliaStar Financial Corp., Minneapolis, in October 1996.
But with more than 100 firms catering to banks that want to offer brokerage services, competition is fierce. They are scrambling to maintain relationships as banks merge and pull brokerage operations in-house. To remain competitive, observers said, firms must offer better products, services, and prices.
"I think there's room for somebody who really wants to put together a top-notch organization," said Neil M. Fried, who manages brokerage operations at Ramapo Bank, Wayne, N.J. The $306 million-asset bank has used Invest Financial Corp., Tampa, for 10 years but surveys other companies regularly "to make sure we're getting the most for what we're paying for," Mr. Fried said.
Though Fintegra does not have any bank clients yet, the company has had a half-dozen preliminary talks with banks in Minnesota, Indiana, Illinois, and South Dakota, none of which is a PrimeVest client, said Mr. Lenzmeier, a former executive vice president.
Right now, he said, Fintegra is focusing on the quality, not the quantity, of clients. "It's not important, I suppose, whether there's 100 or 300," he said. "We want those that are committed."
The firm's founders-who together have 24 years of industry experience- resigned from PrimeVest, St. Cloud, Minn., in February, within a few days of the sudden departure of its president, Stephen Fischer. Both said they felt it was time to move on.
They each got calls from former clients, asking them to consider starting a marketing firm. "So we put our heads together and found some investors in Minneapolis that funded the company," said Ms. Strand, who had been executive vice president of sales and marketing at PrimeVest. She and Mr. Lenzmeier declined to elaborate on who funded the venture.
Fintegra-a name derived from "financial" and "integrity"-will work mostly with community banks having less than $2 billion of assets. It also plans to offer its proprietary software to banks lacking broker-dealers. This would let these banks' customers gain access to brokerage accounts and make trades over the Internet, among other functions.
"There's a huge wave of people moving to the Internet to place trades," Ms. Strand said. "So we'll be able to provide a bank that capability."
The firm has already submitted preliminary filings to the National Association of Securities Dealers and soon is to file additional documents. Two employees have been hired, and additional interviews are planned, Ms. Strand said.
But Stephen Angelis, president of CCB Investor Services, Durham, N.C., which uses Invest as its broker-dealer, wondered whether a start-up firm could offer, at a competitive price, the same services as large third-party firms. "And if they price it under the competition, are they going to be able to stay in business?"