For the second time in little more than a year, Colonial Mutual Funds is looking for a bank sales chief.
William Ennis, who had held the post since last May, is leaving to join First Union Corp., Charlotte, N.C. where he will head the mutual fund department.
His predecessor at Colonial, John O. Myers, was picked off last year by BankAmerica Corp., San Francisco, to run its retail investment products division.
President to Step In
Jeffrey McGregor, president of Colonial's investment services unit, will personally handle Mr. Ennis' former duties while the company scouts for a replacement, said a spokesman for the Boston-based company.
Colonial's sales through banks should remain on track despite the high-level departures, the spokesman added. Colonial sells funds through about 400 banks and derives about 40% of its sales from banks, up from 12% in 1992.
Customers were split over the impact that Mr. Ennis' departure will have on Colonial's business.
"I don't go with a company just because of one person," said Joseph Uccello, head of Bank of Boston's mutual fund program in Connecticut.
An Eye on Performance
The driving force behind fund choices is long-term performance, Mr. Uccello said. He also looks at leadership, commitment to bank sales, and support from wholesalers - sales employees who specialize in helping banks choose and sell mutual funds.
But one bank brokerage executive said he felt a strong personal allegiance to Mr. Ennis.
"We never used to do any business with them before Bill got there," said Sean Flynn, director of Century Financial, the broker/dealer unit of Medford, Mass.-based Century Bank.
Although Century Bank accounts for 16% of Colonial's sales in New England, Mr. Flynn said he considers the Colonial Funds "second-tier" offerings. The bank also sells products from Fidelity, Putnam, American Funds, Franklin, and Massachusetts Financial Services.
The Colonial spokesman said continuity of service to banks is ensured because the company has a strong network of wholesalers.
Dreyfus Corp.'s impending acquisition by Mellon Bank Corp. won't crimp the company's mutual fund sales through nonbank outlets, a top executive said.
Elie M. Genadry, president of Dreyfus' institutional services division, said the $70 billion-asset mutual fund company would continue to cultivate sales outlets such as discount brokerage Charles Schwab & Co., San Francisco.
Indeed, New York-based Dreyfus was one of the first companies to join Schwab's One Source program, unveiled last year.
One-Stop Shopping
The program offers customers one-stop shopping for mutual funds. Investors may choose among a range of no-load funds at Schwab offices, and they get consolidated monthly statements of their holdings.
A similar program is operated by Fidelity Investments. And another discount brokerage, Jack White & Co., is said to be launching one.
After some initial resistance to the idea, Dreyfus executives came to view Schwab's One Source as a promising way to expand distribution, Mr. Genadry said during a panel appearance at a recent Investment Company Institute conference
"It got us into places where we could not afford to go on our own," he said.
Indeed, the need to expand distribution of its funds has been seen as a key reason behind Dreyfus' decision to align with Pittsburgh-based Mellon.
For the past five or six years, the company's ability to reach new customers has been "subpar," said Eli Neusner, a consultant at Cerulli Associates, Boston.
Mellon's lead bank, Mellon Bank Pittsburgh, is expected to complete the acquisition of Dreyfus around midyear.
