To Attract Investors, PNC May Rename Brokerage Unit

Hoping to burnish its image among investors, PNC Corp.'s broker-dealer subsidiary is considering dropping "PNC" from its name.

Bank broker-dealer units "still have a credibility gap with the investing public," said Joel Calvo, president and chief executive officer of PNC Brokerage Corp., Pittsburgh. Mr. Calvo is not sure what the unit should be called, he said, but he does not think the PNC moniker is appropriate.

Mr. Calvo lamented bank broker-dealers' reputation with investors during a panel discussion Monday at the Bank Securities Association's national investment products conference. His remarks come as bankers across the country rethink what they should they call themselves to be taken seriously in the investment world.

Indeed, Allen L. Lastinger Jr., president and chief operating officer of Barnett Banks Inc., said in a recent interview with American Banker that Barnett executives are considering dropping the word 'bank' from their company's name because they do not want to be known only for their banking services.

Investment product vendors who heard Mr. Calvo's remarks largely agreed that banks have a credibility problem with the investing public. But the head of another bank brokerage said it benefits from his bank's name.

John W. Hogge, president of Northern Trust Securities Inc., Chicago, said that the bank's stellar reputation in personal banking and trust helps the broker-dealer gain respect among potential customers. In fact, he said the hardest sell is to the personal bankers who refer their clients to the brokerage unit.

"All of our marketing efforts are internal," Mr. Hogge said. "We want to take advantage of the relationships the bank has built up in the last 100 years. That's hard."

If Northern's personal bankers do not think their clients will receive good service from the brokerage, the bankers will not refer customers there, Mr. Hogge said. Referrals from inside the bank are the lifeblood of Northern Trust's brokerage, so maintaining credibility within the bank is vital, he said.

Mr. Hogge said the brokerage will probably field 2,000 referrals from Northern Trust personal bankers this year and refer 500 to 600 customers to the bank.

The two-way referrals help smooth over the turf battles that typically arise between bankers and brokers when the bankers are doing the bulk of the referring.

"I have 34 reps, and they know this is how the game has to be played," Mr. Hogge said. "If they don't, they won't get referrals and business."

He said that though Northern Trust's reputation with trust and personal banking has helped the brokerage, many other banks have not figured out how to position themselves in this market.

It is not wise, he said, for bank brokerages to sever their ties to their bank parents.

"Why give up the franchise?" he said.

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