Merrill Lynch's recent foray into providing online research via its "Ask Merrill" Internet service has prompted at least one competitor, Salomon Smith Barney, to consider doing something similar.
"Merrill's move is obviously going to open up a part of the business by offering a service that until now was pretty closely held. The question for us is should we respond and if so how?" says one SSB marketing vice president. The first note of concern was expressed at an industry forum in October on the impact of the Internet. At that gathering Frank Zammataro, Merrill's director and vice president for client technologies, laid forth his firm's plans to develop a "cyber-consultancy" approach--offering full service in conjunction with electronic delivery of information.
During the same panel presentation, Mark Loehr, SSB's managing director of research, said there was currently a "huge debate" within his firm about taking similar steps. That debate has grown in intensity, sources say, touching some core identity issues at the firm.
"I don't think anything is being discussed at Smith Barney that is different than that being discussed at firms across the country," says one veteran SSB marketing executive. "There's this tool [the Internet] that is revolutionizing the way business is conducted, and we have to figure out how it fits into our operations."
The Citibank merger has created more doubt, some executives say. "Probably the oddest part of all is that Citibank was one of the pioneers in electronic commerce and now, when it's the hottest topic in the business, there seems to be a sea change in attitude" toward emphasizing personal contact over technology, says the veteran marketing executive.
The new emphasis is evidenced by the firm's move in October to name Joseph Plumeri head of direct sales and distribution for the retail banking business, says another SSB sales and marketing executive. "The feeling at Smith Barney is that Plumeri is bringing Smith Barney [personal selling] culture to Citigroup, instead of the other way around."