Summary of Session 3 panel discussion

Economic Policy Review - Federal Reserve Bank of New York, Oct 2000 by Stiroh, Kevin J

Merrill Lynch's long-term strategy was summed up by Castellano as a desire to be "all things to some people." By developing broader, deeper relationships with its core clients in the most attractive market segments, he said, Merrill Lynch is making this diversification strategy an integral part of its view of a successful future.

QUESTIONS AND ANSWERS

The comments from the audience centered on information technology. In response to a question about the role that technology plays in the distribution process-particularly with regard to increased synergies with affluent customers-- Castellano replied that Merrill Lynch now maintains an important presence. Nonetheless, he said that the firm's primary value-added still results from a strong financial relationship with its clients. Information is currently available from many sources, ranging from CNBC to general worldwide web portals, so customers-particularly affluent ones-rely on Merrill Lynch to supply useful information and advice. As the Internet provides commoditized information, Merrill Lynch hopes to focus on the high-end value services that high-networth customers desire from a full-service firm.

Candito emphasized that the Internet was primarily a means of "e-service," and not an "e-sale" tool in MetLife's individual insurance markets. He said that the Internet is not particularly conducive to the sale of insurance products; rather, the primary advantage it offers is in the form of distribution and the ability to view account information.

Kevin J. Stiroh, an economist at the Federal Reserve Bank of New York, prepared this summary.

The views summarized are those of the presenters and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System.