Wachovia Securities LLC says its recent hiring of a MetLife Inc. executive is part of an initiative aimed at better selling the parent bank's credit, deposit, and lending services to their roster of investment customers.
"If you take a look at it, Wachovia and other banks have done a good job cross-selling investments to their bank clients, but no one has done a good job going the other way," Brand Meyer, the president of Wachovia Securities' financial services group, said in an interview last week. "We want to approach the client in our brokerage group and approach customers that walk into one of our brokerage offices. We want to be able to create a package of products that solves their noninvestment needs."
The Richmond, Va., unit of Wachovia Corp. announced this month that it hired Dorian Hansen to fill the new position of director of banking services and to lead the initiative. Ms. Hansen was vice president of individual products and strategy in MetLife's institutional brokerage group.
Mr. Meyer said Wachovia Securities, which is targeting individual investors with $250,000 to $5 million of investable assets that use its financial advisers, has been working to cross-sell traditional banking products to its customers for two years.
Wachovia Securities originated $4 billion of loans last year and $2 billion in 2005.
Mr. Meyer said that he hopes to double originations again this year, and that Ms. Hansen's hiring is the next step toward offering more Wachovia loan, deposit, mortgage, and credit card products to Wachovia Securities' customers.
"When Wachovia completes its integration with Golden West [Financial Corp.], we'll have banking offices in 85% of the country," Mr. Meyer said. "Wachovia has gone from a Southeast regional bank to a national bank with a national footprint. Because of our association with the Wachovia brand, there is an opportunity for us to grow."
Analysts said Wachovia Securities' cross-selling strategy has worked at firms like Merrill Lynch & Co. Inc., which launched its Total Merrill retail account in January 2003. The Total Merrill account, which offers cash management and mortgage services, is designed to offer additional banking services to the New York firm's customers.
"Merrill Lynch has developed a pretty big book of banking business by cross-selling banking services to their existing brokerage clients," said Geoffrey Bobroff, the president of Bobroff Consulting in East Greenwich, R.I.
"What Wachovia Securities is doing is well-tested by the wire houses," Mr. Bobroff said in an interview Wednesday. "Wachovia Securities has an opportunity to introduce a breadth of products and services to their brokerage customers that they otherwise might not reach to a brokerage company for."
Some analysts remain skeptical of the idea that investors would move their assets away from what are typically well-established banking relationships and into a new investment company.
However, Mr. Meyer said if an investor has a well-established, trusted relationship with a financial adviser, there is an opportunity to gather additional share, even if customers retain their banking accounts.
"Working with us doesn't require an investor to get out of an existing banking relationship," he said. "We want to help investors get everything under one umbrella as they approach retirement. As we give more advice there will just be a natural proclivity to gather additional assets."
Most individuals, including affluent and high-net-worth investors, consider their relationship with a bank more of an institutional relationship than a personal one, Mr. Meyer said.
"People bank somewhere because it is where their parents banked or because they have been there for 25 years and really there is no reason to change," he said. "Today our clients are interested in consolidating with one trusted provider."
The financial services group plans to continue to add people to develop this initiative nationally, Mr. Meyer said.
"We want to be one Wachovia and bring all of the capabilities and resources that this company has to bear and make it available to financial advisers and for their customers," Mr. Meyer said.
