I received a message from one of our Customer Service Managers. A customer told her that a well known brokerage firm is offering insurance on deposits up to $500,000 for a cost of $150/year.

Has anyone heard of this? I know this has to be some type of "private" or self-insurance, but of course the customer only hears "Insured up to $500,00!!!" and wants to know why WE can't do that!!!!

I told the CSM that when she calls the customer back, she should tell the customer to ask a lot of questions as to who is providing the insurance, etc.

At any rate, I went on this companies website, and they sure do seem to offer a whole lot more than banks can. Anyone out there have experience in losing customers to these brokers?

Buying brokered CD's on the internet was a big topic at a former employer. When I looked at the "disclosures" that they were providing, we asked them a lot of questions which they never bothered to make much of an attempt to answer. We walked from the deal - it was way too scary. You might want to pose as a potential customer yourself to see how they handle things.