Salomon Brothers Inc. and Fidelity Investments have formed an alliance under which Fidelity's brokerage and mutual-fund clients will have access to Salomon-led stock offerings.
The alliance also allows Salomon to distribute its equity research among the 6.1 million retail-brokerage and mutual-fund clients of Fidelity, the companies said last month.The agreement makes Fidelity Brokerage Services Inc. the first discount broker to offer consistently new stock issues to its customers, the companies said.
Discounters typically offer neither investment advice nor access to securities offerings. Some, though, have edged toward both areas by, for example, giving clients referrals to investment advisers.
The alliance also gives Salomon distribution capabilities among individual investors, which the firm now lacks. The Salomon Inc. unit serves institutions almost exclusively. The ability to funnel stock issues to retail accounts is often a major factor considered by companies in choosing underwriters for their securities offerings.
The companies said Fidelity recently participated in distributing Salomon-led offerings for Berkshire Hathaway Inc. and Colt Telecom Group PLC.
Salomon has been aggressively strengthening its equity-underwriting franchise, which has typically lagged that of its bond operations. In 1996, the firm more than doubled the volume of stock underwritings from the previous year, raising its market share to 5 percent from 2.7 percent.
Fidelity is the nation's largest mutual-fund company.