PaineWebber Joins Fund ‘Supermarket’ Bandwagon
PaineWebber Group Inc. is the latest Wall Street firm planning to offer investors access to a range of mutual funds from different money management companies.
The New York-based brokerage joins several other firms in starting a fund “supermarket.”
It expects to begin offering the service to existing customers early next month and to new customers early in 1997.
Merrill Lynch & Co. and Prudential Securities Inc. are planning to offer similar services, and Smith Barney Inc., a subsidiary of Travelers Group Inc., already does.
In 1992, Charles Schwab Corp. was the first to begin selling hundreds of mutual funds at one store. Schwab calls its service OneSource.
Schwab charges fund companies at least 25 cents for each $100 of assets it attracts. Analysts said OneSource accounts for between 5% and 10% of Schwab’s profit, which last year totaled $172.6 million.
OneSource customers pay nothing to buy funds and can switch money from fund to fund at no cost.
Customers get one statement accounting for all of their funds instead of several.
Fidelity Investments, the nation’s biggest fund company, and Jack White & Co., a San Diego-based discount brokerage, were the first to follow in Schwab’s footsteps.
