Here's my advice.

• Author: O'Rourke, Timothy J.
• Position: Fundamentals - Investment services

Banks have traditionally depended on the business model of collecting deposits and lending money. Only a few have expanded into investment services. With the leveling of the regulatory playing field through the passage of the Gramm-Leach-Bliley Act, banks today are starting to enter the competitive fight for investment dollars, capitalizing on existing relationships to increase their share of client financial assets.

Banks originally started contracting with investment and brokerage services through small third-party providers in the 1980s. That action was taken mostly for defensive purposes. Today, banks are contracting to provide their customers with much more comprehensive services through full-service security firms. This new move is more for long-term business preservation. Major Wall Street firms like Merrill Lynch, Smith Barney and Morgan Stanley-Dean Witter combine traditional banking and brokerage services in one package. These brokers are aiming to capture their clients' complete financial relationship. Consider the advantages these organizations are pitching to the consumer: convenience, better pricing (less overhead) and flexibility.

Questions, concerns and challenges abound in this new competitive environment, but so do opportunities. Let's look at what you need to know to start offering retail financial advice and investments, as well as the steps to ensure the success of existing programs.

The $10 trillion opportunity

Everyone today is discussing the unique event taking place in our country. As baby boomers age, they will inherit an estimated $10 trillion from their parents' estates. This event will make the baby boomer generation the wealthiest in history and, at the same time, it will create an incredible opportunity for those institutions poised to provide financial expertise.

Combined with their entrance into retirement (at the current rate of three boomers per minute), baby boomers have an unprecedented need for financial guidance. The stock market malaise since the turn of the century has left few people confident in making vital investment decisions without the counsel of a financial adviser.

Most consumers utilize multiple service providers to fulfill their varied financial needs, with few institutions offering a truly comprehensive menu of financial services. In order for banks to capitalize on this opportunity and compete for a growing asset base, they need to offer a full array of investment products and services...