Hancock seen likely to shed Transamerica's focus on bank channel.

John Hancock Mutual Life Insurance Co.'s planned acquisition of Transamerica Corp.'s mutual fund business could take a promising player out of the business of marketing funds through banks.

Though Transamerica channels one-sixth of its fund sales through banks, John Hancock does only 5% of its business this way. And the chief of John Hancock's mutual fund unit doesn't see much value in changing that.

'94 Acquisitions Of Mutual Fund Firms Assets In Acquired bIIIIons byKemper $45 ConsecoCorp.American $17 VanCapital KampenManagoment Merrittand ResearchColonial $14 LibertyGroup FinancialTransamerica $3 JohnFunds Hancock

Sources: Strategic Insight, company reports

"The bank channel has not been attractive," said Edward J. Boudreau Jr., chairman and chief executive of the John Hancock Mutual Funds.

"I don't see it as a robust avenue for fund distribution, as some have suggested," he added.

Mr. Boudreau was more sanguine about what the acquisition will mean for John Hancock.

The deal will give the Bostonbased company "a stronger competitive position in the industry," he said.

John Hancock has agreed to pay $100 million for San Francisco-based Transamerica's Fund Management unit.

The $3 billion of assets in the 17 funds managed by this unit would bring John Hancock's total fund assets up to $14.5 billion.

Combined, the funds would have more than 1 million shareholders. Their merger would create the 32nd-largest mutual fund manager in the country, according to New York researcher Strategic Insight. The deal is expected to be completed by yearend.

But even though the merger will build scale for John Hancock, it won't have much effect on John Hancock's sales of funds through banks, Mr. Boudreau said.

Mr. Boudreau admitted that banks have "never been major vendors" of John Hancock funds.

Transamerica has done somewhat more business with banks, but both insurers' sales through banks fall well below that of some other leading mutual fund companies.

For example, Putnam Financial Services and Colonial Group draw more than one-third of their sales through banks, according to consultant Cerulli Associates Inc., Boston. Franklin Resources Inc. derives a quarter of its fund sales through banks, Cerulli reported.

Mary McAvity, a consultant with Cerulli, said she takes exception to Mr. Boudreau's statement that banks have been overhyped as mutual fund marketers.

"Many of these banks have proven very viable outlets for mutual funds," she said. "Maybe John Hancock doesn't play well through banks, but there are plenty of companies out there who do."

But even if John Hancock wanted to, it probably couldn't do much to beef up its fund sales through banks, said Neil Bathon, president of mutual fund researcher Financial Research Corp., Chicago.

Companies that don't do much selling of funds through banks by now are unlikely to change that, because the market is so competitive, he explained.

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