"Over the years, incremental changes in both the way services are delivered and products are priced has greatly changed the financial landscape," says Chris Valentine, a chartered mutual fund counselor and financial advisor with First Securities Investments, Inc. in Raleigh.
The blending of available services from product specific providers, including banks offering mutual funds or brokerage firms offering banking products, further complicates the financial swimming pool, he
"Let's face it, as with any business, people are constantly looking for new revenue streams and ways to increase their profits," says Valentine
."This evolving marketplace and the repealed provisions led to a significant shift in the way the industry conducted business over the last two decades."
In the early '90s, the relaxation of the GSA, the very Act that separated commercial and investment banking, came under the greatest debate.Central to this debate is the potential risk reduction of commercial banks due to continued diversification.*
Banks who have been highly structured and ruled by regulation are becoming more market responsive and market driven, Valentine
And, financial services have become big business to BB&T
"It can and you have to be careful," warns Valentine
, who hosts a radio show called the Financial Power Hour on 620AM and 570AM every Monday at 4pm."Remember, you're the master of your own fate, you're ultimately responsible for your own financial future.It's important not to relinquish the power or responsibility."
"Every customer doesn't want full-service financial planning," he
adds."And, every entity out there is not qualified to provide those services."
, too, recommends that consumers understand how the provider handles information.Document control and sharing of information is crucial to the relationship."With single consolidation, the institution has knowledge of your entire financial life, and all of your spending habits.Plus, they have history of deposit and investment accounts," he
On the flip side, Valentine
says, there are some clear benefits including:
- Convenience and ease of access: In many ways, it's nice to deal with one entity.If all consumer loans, insurance, automobile financing, investments, mortgage services, and checking accounts are with one entity, statements will be consolidated and you have a better snapshot of where you stand financially. - Lower fees: If you do aggregate your financial business, most of the time you get lower interest and smaller fees. - Better customer service: "The provider, whether it's a bank or broker, wants high asset retention," says Valentine
. "There's a vested interest in pleasing the customer if that company has everything from stocks to retirement accounts.
No shortage of solutions
Financial convergence is, by all means, here to stay and the industry is growing, Valentine
says.Likewise, there doesn't seem to be a shortage of financial planners and independent advisors out there, volleying for the available dollars.
Banks will continue to purchase other banks and brokerage houses will continue to consolidate and advocate full-service banking products, explains Valentine
"All in all, your financial life is interactive, don't just put your future on autopilot," summarizes Valentine
."And, as with anything, do your homework."
*source: Journal of Financial and Strategic Decisions
, Fall 1994.
...Chris Valentine, a chartered mutual fund counselor at First Securities Investments, Inc., 919.719-0400 x 24;