NationsSecurities is adding sales representatives at a faster pace than initially anticipated to meet investor demand for mutual funds, according to executives heading the program.
The company, a joint venture between NationsBank of North Carolina and Dean Witter Financial Services, "has exceeded our expectations," said James F. Higgins, president of Dean Witter.
Higgins said sales of mutual funds have come in ahead of target, forcing the company to add sales representatives more quickly than scheduled.
The joint venture, which opened for business six months ago, was to employ 400 sales representatives by the end of 1993.
Instead, the company will have 640 brokers in the field by year-end, said G. Patrick Phillips, president of NationsBank Financial Products.
The progress of NationsSecurities has been carefully watched because it marks the first time that a major retail brokerage and a big bank have teamed up to supply investment products through branches.
The Office of the Comptroller of the Currency approved the effort in April, after attaching 12 conditions to enforce disclosures to customers.
The "tremendous" response to the program convinced executives to accelerate its roll-out, Higgins said.
But Higgins and bank officials are tight-lipped about dollar volume. They say only that sales of mutual funds have topped projections, and that NationsBank's own funds are slightly outpacing the amount of Dean Witter funds sold.
"That might be expected because you're operating within the bank's franchise system," Phillips said.
Non-bank customers are making half the purchases, he said.
NationsSecurities will continue adding sales representatives as the Program grows to 700 branches from more than 400 by the end of next year, Phillips said.
There is plenty of room for growth after that as well. NationsBank's retail network includes 1,900 branches in nine states. NationsSecurities apparently isn't hurting for applicants. "We get eight to 10 for every slot," Higgins said.
In culling from these ranks, NationsSecurities steers away from people with brokerage backgrounds in favor of applicants with selling experience in other areas, Phillips said.
"This way, they more easily become accustomed to our culture and systems," he said.
In addition to obtaining Series 7 securities licenses, sales representatives are trained to work closely with branch employees.
The sense of comradeship apparently extends to the higher-ups at NationsBank and Dean Witter.
Phillips alluded to the branch brokerage program last week when announcing a credit card Venture involving Dean Witter and Nationsbank.
"Our experience [with Nations Securities] has been so positive, so quickly, that when this opportunity came along we were happy to participate," Phillips said.
At the same time, Nations Securities is looking to expand by offering its program to other banks, primarily out of NationsBank's market area.
The task of expanding the so-called syndication program falls to Mitchell T. Grant, who was recently wooed away from Putnam Financial Services, Boston, where he headed the mutual fund company's bank distribution arm.
Karen Talley is a reporter for the American Banker, a sister publication of The Bond Buyer.
