Chase Manhattan Corp. is preparing to replace its retail investments marketing partner, GNA Corp., with another vendor, industry sources say.
The New York banking company plans to unveil its new arrangements within a few weeks, according to sources who have seen a letter circulated last week to 140 GNA brokers who work in Chase branches.
Brokers at the bank are telling callers who inquire about GNA's status that customers will soon be notified of changes in the program, and that their purchases will not be affected.
Essex Corp., Independent Financial Marketing Group, and James Mitchell & Co. are among the investment-marketing companies vying for the Chase contract, according to individuals involved in the negotiations.
Chase officials declined to discuss the matter, saying in a Statement only that the banking company "continues to seek new growth opportunities."
A spokeswoman for GNA, a Seattle-based unit of General Electric Capital Corp., said, "we have a positive outlook on the continued relationship with Chase, although the nature of it may change."
GNA has run Chase's program, which covers 350 branches, for the last four years. In 1993, sales of mutual funds and annuities totaled about $1 billion, making it one of a handful of bank programs to reach that mark.
While many observers consider the program a great success, rumors have been flying since late last year that Chase was thinking about dropping GNA.
Initially, the speculation was that Chase wanted to take the sales program in house. Several other major banks, including Wells Fargo & Co., have taken that step after building investment sales expertise with aid from a marketing partner.
But sources familiar with the discussions said Chase had ruled out internalizing the program because it wants to contain payroll costs and share compliance responsibilities with a partner. The company began soliciting proposals from investment-products firms during the winter.
It remains unclear why Chase wants to replace GNA with another vendor.
Industry experts said Chase might have cooled to GNA after the company's purchase last year by GE Capital, which is known to be aggressive about promoting its own products.
But officials at Chase and GNA discount the speculation, saying that whatever the outcome, GNA's products will still be among the offerings at Chase branches.
The shift may be the result of the companies' "different needs and objectives," said Paul Werlin, executive director of the financial institutions division of Robert Thomas Securities.
"An awful lot of banks go into relationships with marketing companies believing they have a good fit," Mr. Werlin said.
"But as time passes, they determine it was not terrific after all." What's Going On At Chase * Longtime investment sales partner GNA is out. * A new vendor, yet to be named, is in. * Retail sales continue through branch-based brokers.
