If you want to open a checking or savings account or obtain a loan, you visit a bank. If you want to invest in annuities, bonds or other securities, you call a brokerage firm. It's as simple as that.
Or at least, it used to be. In recent years, the line between these businesses has become increasingly blurred as they encroach on each other's territory in an effort to boost profits and to preserve and expand their customer base.
Nowadays if you need credit, you can probably count on your broker to provide it. And banks have begun offering everything from mutual funds to stocks and bonds to insurance.
BANKING ON STOCKS AND BONDS
The banking industry led the charge across the boundary about a decade ago when deteriorating economic conditions began affecting its institutions' bottom lines. As Robert Harris, president of the Texas Bankers Association, explains, "In Texas, two of the big credit consumers were oil and gas and real estate. Nobody in this state has to be told that we've seen substantial declines in both industries. As a net result, we're consuming far less credit than before, so banks aren't seeing as much income from loans."
Furthermore, competition for credit customers began to increase. For example, companies ranging from General Motors Corp. to American Telephone & Telegraph Co. started offering credit cards, which had been one of the banking industry's cash cows. And …