Banks are working harder than everto earn your business, making iteasier for potential customers toswitch from other banks. But they'reworking just as hard to make certain thatonce they've got you, they keep you.
Today, banks are offering their customerseverything, from home mortgagesand credit cards with enticing awards todirect deposit and online banking. Allthese extras are an effort to be your oneand only stop for financial services.
The problems arise when you want tomake a switch. In one scenario, the reports, a woman living inBrooklyn, NY, took all her money out of alocal bank, closed her account, and calledher insurance company to reroute an automaticdebit from her checking accountwhen she moved to New Jersey. However,the bank never closed the account and theinsurance company never shut down theautomatic debit. It took 3 months, manyphone calls, and numerous $30 overdraftcharges before the problem was rectified.
Making the Switch
Of course, the new bank that wantsyour business is only too happy to assistyou in making the switch. According tothe article, Washington Mutualand Bank One both provide new customerswith switch kits, which include allof the forms needed to move automaticdeposits and bill payments over, as wellas a prewritten letter that asks your formerbank to close your accounts.
Want even more personalized service?Commerce Bancorp not only offers aswitch kit, but a bank employee will alsomanually enter all the pertinent informationnecessary for customers who want topay their bills online. FleetBoston helpscustomers read their bank statements andbalance their checkbooks. Bank staff willalso walk new customers through theprocess of activating an ATM card andonline banking.
Challenges of Switching
Despite the helpful services banksprovide in switching, there can still beproblems. In some cases, investors submita transfer form to their new broker butmust then wait for their old broker torelease the assets. This should take nolonger than a week, but in many casesmay end up taking several months ifpaperwork errors occur. Your old bankwill often reject a transfer request if thetransfer form is incomplete.
The article suggests that to avoid these problems, attach a copy ofyour most recent brokerage statement to the transfer form. If problems persist,file a complaint with the SEC (202-942-7040; www.sec.gov).
One fairly constant rule of thumb isthat the more money you have, the morehelp you will receive when switchinginstitutions. For example, JP MorganChase clients who have at least $100,000with the firm or $250,000 in other investment-worthy assets are assigned abanker and a financial advisor to helpclients fill out all the appropriate transferforms. Company officials will evenmake a house call to help clients completethe forms if they are unable to getto the branch office.
There's no questioning the convenienceof one-stop shopping when it comes tofinancial services. The key to remember isthat the more your finances are linked to aparticular bank or brokerage firm, theharder it is to break those chains, and themore services you utilize, the less likelyyou'll want to switch.