Imagine that a bank owned a brokerage firm. Like Bank of America and Merrill Lynch or a number of other major banks. The bank would like the customer of the brokerage firm to get a mortgage from the bank, and would like the bank’s customers to open investment accounts with their brokers. So the banks incentivize their employees to encourage their customers to do business with each other. That’s called “cross selling” and it has worked well for some firms, less well for others.
But there’s a problem. Cross-selling creates a conflict of interest. The bank may not have the best loan deal for the brokerage client, and the bank’s customer may not be getting the best deal from the brokerage firm.
Cross selling is more common now that major brokerage firms were merged into banks after the crash of 2008. Be cautious about cross sales pitches because there’s a financial incentive on the part of the banker or broker to do so.
The independent RIA who’s not affiliated with a bank will probably provide the most unbiased advice.