Allfirst Financial begins online trading

`We are competing for the customer relationship,' it says


February 01, 2000|By Bill Atkinson | Bill Atkinson,SUN STAFF

Allfirst Financial Inc. said yesterday that it has joined the growing number of banks and brokerage houses offering online stock trading.

The Baltimore-based banking company has launched Allfirst Internet Brokerage, which allows customers to trade stocks 24 hours a day over the Internet, access their brokerage account and conduct investment research.

Each trade costs $29.95 for up to 1,000 shares, and 3 cents per share thereafter.

"We are competing for the customer relationship," said Mark A. Mullican, president of Allfirst Brokerage Corp., a wholly owned subsidiary of Allfirst, which has $18 billion in assets and is a unit of Dublin-based Allied Irish Banks PLC. "We are hoping to draw not just customers of the bank, but new customers -- who we hope will become checking account customers."

Allfirst, like many other banks and brokerage firms, is being forced to offer online trading to gain and keep customers.

Scores of online trading firms have popped up in recent years, and they have shaken up the industry by letting investors buy and sell stocks at a fraction of the customary cost. They have also cut into the business dominated by traditional brokerage firms.

Last year, Merrill Lynch & Co., the country's largest brokerage house, began offering the service.

Locally, T. Rowe Price Associates Inc., Bank of America Corp., and First Union Corp. are among those offering online trading. Legg Mason Inc. has been testing an online system, and expects to have it fully operational this year. Provident Bankshares Corp. plans to unveil online trading in the second quarter, a spokeswoman at the Baltimore banking company said.

In addition, banks have known that they cannot simply make loans and offer checking accounts. Like giant Citigroup Inc., they must sell many different products, such as insurance, mutual funds, stocks and banking services, experts say.

"What you are seeing are institutions feeling very much -- that insurance, mutual funds and annuity sales, all of these things, are going to be standard products sold by the surviving financial services companies," said Arnold Danielson, chairman of Danielson Associates Inc., a Rockville-based bank consulting firm. "It is obvious Citigroup set the tone. It is going to be very hard for Allfirst to be just a traditional bank, which is pretty much what they are."

Allfirst, formerly First Maryland Bancorp, has offered brokerage services to customers since 1983. About five years ago, it started selling mutual funds and annuities through its branches, Mullican said. It also sells insurance through its 260 branches.

Allfirst has 400 brokers and it began testing the online product in December. Last month, it began offering it to customers.

Mullican said the site gives investors plenty of information.

Allfirst Internet has up-to-the minute stock quotes, charts and reports on companies' performance. It also has calculators to help investors gauge how much they need to save for retirement or college education, and reams of data on mutual funds provided by Morningstar Inc., the Chicago firm that tracks the industry.

One of the biggest advantages of the new online service, Mullican said, is that customers who have an Allfirst bank account can pay for their trades quickly by using money in their checking and savings accounts.

"If you have a bank account, it is one of the huge factors of convenience," he said.

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