Natwest trims its ties to outside broker-dealer.

National Westminster Bank is ending its reliance on an outside broker-dealer to run the banks's retail mutual fund and annuity sales program.

The Jersey City bank said Tuesday it will transfer to its own broker-dealer 125 sales representatives who are now employed MDS Bankmark and operate in Natwest branches.

Natwest hired Bankmark, a Morris Plains, N.J., financial services company, to get the $2 billion-asset bank into the retail investment products business.

After three years, Natwest is comportable enough with the program to bring it in house.

More Control, More Income

Natwest will gain greater control over the investment program and presumably more fee income by making the sales representatives employees of its own broker-dealer, said executive vice president Roger Goldman.

Natwest earns a share of the commissions that mutual fund and annuity sales generate.

This translated into $6.5 million of fee income during the first nine months of this year, Mr. Goldman said. That figure is up $1.3 million from 1992.

Part of a Plan

This year, Natwest is on pace to sell more than $350 million of mutual funds and annuities through its 26 branches in New York and New Jersey, said BankMark senior vice president Bette Crosby.

Indeed, Natwest is Bankmark's largest retail client. But Bankmark characterizes Natwest's shift as part of a plan, and not a blow to the company.

Well-Traveled Road

"The Bankmark program is designed to establish a comprehensive financial services marketing environment, which can ultimately be internalized by the bank," said Bankmark president Robert C. Leonard.

Bankmark adds that its ties to Natwest, which has praised the job the company did, are not being completely severed. Bankmark expects to continue supplying marketing support, Ms. Crosby said.

Natwest is going down a path other banks have taken.

Wells Fargo & Co. recently revealed plans to use its own broker-dear to operate a program that was overseen by Marketing One.

And, it Natwest's own backyard, Dime Savings Bank of New York cut its ties with Invest Financial Corp.,a company that supplied the thrift with brokerage services.

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