Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.misc From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Bank, brokerage join to sell funds Date: Tue, 27 Oct 92 13:27:07 EST Message-ID: \SE C;MONEY \HD Bank, brokerage join to sell funds \BY David R. Sands \CR THE WASHINGTON TIMES In the biggest alliance of its kind to date, NationsBank Corp. and brokerage house Dean Witter Financial Services yesterday announced a new partnership to sell mutual funds and other investment products to bank customers. Under the proposed agreement, the Charlotte, N.C.-based NationsBank will fold its existing NationsBanc Securities Inc. into a new joint venture equally owned by the two partners, to be called Nations Securities. The new company plans to sell its products and services through NationsBank branches in Washington and other cities, through freestanding offices, and even through other banks that buy into syndication deals. For NationsBank and its aggressive chairman, Hugh McColl, the partnership will offer a quick way to acquire expertise and investment banking know-how. "We're building national businesses in many different areas of the financial market," he said at a New York news conference yesterday. "We were limited in the money we could allocate to the securities division to help it grow." He said Dean Witter has a much broader array of securities products, more sophisticated software and an established training and recruitment program for account executives. "This moves us forward about 10 or 20 years in this business," he said. Dean Witter Chairman and Chief Executive Officer Philip Purcell said he did not think the new joint venture will steal business away from Dean Witter. "We gave that issue great thought," he said. But he said the company's market research found that more than 80 percent of mututal-fund shoppers at brokerage houses never think of buying securities at a bank, while 75 percent of bank customers buying mutual funds consider only their bank when making the purchase. Mr. McColl said the two companies project the venture will probably break even next year and turn a profit of about $104 million by 1997. NationsBank's stand-alone securities subsidiary made about $15 million last year. The joint venture must be approved by federal regulators, but both sides said the partnership is structured to avoid running afoul of current restrictions on banks underwriting securities. Nations Securities expects to be operating by the first quarter of 1993. This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM