Last year, Foliofn gave up its own efforts to solicit retail customers directly, diverting resources to capture the institutional market and establish distribution partnerships. The relationship with Quick & Reilly represents the first major third-party distribution deal for the basket trader.
The new relationship was warmed by Foliofn executive Rich Hagen, VP of retail operations, who came to the firm from Quick & Reilly.
"We stayed in touch with Rich and once we started to get into the whole basket trading process, it was clear that Foliofn had the best product out there," said spokesman , Charles Salmans.
Between Hagens relationship with Quick & Reilly and his current position, Foliofn president Steve Wallman said that Hagens role in the deal was a given.
Unswayed by Foliofns October staffing cuts, Salmans said that the basket trader was the most robust and financially stable among its peers.
In a market where investors may be slimming down the number of brokerage accounts they decide to keep open, Quick & Reilly said it wanted to offer a competitive product that sets the firm aside from the field. "What we are trying to do is to move to more of an asset gathering approach to the brokerage business. Certainly, the basket trading arena is another avenue to serve our clients and therefore give them a reason to use us and to consolidate assets with us," said Salmans.
In offering Q Folio Investing, Quick & Reilly integrates the Foliofn services with its own existing set of services. "This is just another tool in the toolkit to make sure that Quick & Reilly is at the top of the list," Salmans said.
Unlike Foliofns own flat-fee service, Quick & Reilly charges an asset-based fee, according to the firms Web site. Quick & Reilly has 1.3 million customers, with average account assets of $90,000.
Foliofn is actively pursuing other relationships. "Its our strategy and will continue to be our strategy," said Wallman. While Foliofn signed a deal last December with
"The credit unions have been signing up at a torrid pace," said Wallman. "The number continues to grow and accelerate significantly."
Nonetheless, that enthusiasm represents relatively few customers so far, as the first stage of marketing at the credit unions has been focused on the education and enrollment of the credit unions themselves. This quarter, CUNA Mutual will begin a marketing campaign reaching out to investors.
