U.S Banks Promote Cross-selling But Brokers Resist
Given the revenue decreases created by crackdowns on credit card fees and falling brokerage commissions, big U.S. banks are promoting the cross-selling of products.
The strategy is to generate revenue from the sale of mortgages, other loans and insurance to wealthy investors, while pressuring their lending officers to market investment products to yield-hungry customers.
According to the president of Morgan Stanley’s wealth management division, more than half of Morgan Stanley’s brokers have marketed loans to their clients. At rival Merrill Lynch, more than half of the firm’s almost 15,000 brokers have helped sell a mortgage.
However, the move to cross-sell products has raised regulators’ concerns. And many brokers respond that they are uncomfortable selling unfamiliar products. That is because they don’t want to refer their clients to unknown colleagues who may offer poor service or even steal the referral.
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