Rocked by a slide in business, the division of Liberty Mutual Group that helps banks sell investments laid off nearly a tenth of its staff, including its chief financial officer.
The cuts in the Financial Bank Group of the Boston-based insurer were focused primarily among operations and accounting personnel, said Porter P. Morgan, president of the unit.
He explained that these areas had to be trimmed to compensate for a slump in sales through banks.
Paul Martins, the bank group's chief financial officer, was the highest ranking executive to be released. His responsibilities will be distributed among a number of Liberty executives, a company spokesman said.
A total of 10 positions were eliminated in the bank group's head office, leaving 90 employees there. Additionally, the bank group laid off two sales managers in the field who oversaw investment sales programs at two banks.
One of the sales managers oversaw investment sales at Anchor Bank, which is in the midst of merging with Dime Savings Bank of New York. As a result of the merger, Anchor is ending its relationship with Liberty. Liberty officials declined to name the other bank.
Within the past two weeks the bank group's regional vice president for the east and its director of training have resigned. But these departures were said to be for personal reasons. Liberty officials said the bank group plans to hire replacements.
Mr. Morgan, who was named president of bank group late last year after former president Ronald Robbins quit, said the cuts were made because "business is not as good as it was a few years ago."
Liberty and other companies that help banks sell investments spent much of the last two years staffing up and building new computer systems to handle increasing sales volumes.
But many of these companies, including Liberty, were hit hard when sales dropped last year, as investors shunned mutual funds in favor of certificates of deposit and fixed annuities.
According to Kenneth Kehrer, a Princeton, N.J., consultant, Liberty sold $1.6 billion of mutual funds and annuities through banks in 1993 and $1.25 billion in 1992.
Mr. Kehrer said last year Liberty's sales through banks fell by $675 million, with mutual fund and variable annuity sales both off by about half, and fixed annuities up by $50 million. Liberty currently sells investments through about 70 banks.
Mr. Morgan declined to comment on last year's sales volumes, except to say that mutual fund sales "were down significantly," while annuity sales rose a bit.
Liberty is not the only marketer of investments through banks to cut staff recently.
New York-based Wall Street Investor, the investments marketer endorsed by the American Bankers Association, in September shed eight of its 75 employees, because of slumping mutual fund sales and an internal restructuring.
Investment product marketing firms have also been stung by big clients choosing to take control of their investments sales back from outside brokers. On this front, Liberty has been especially hard hit.
For instance, Chemical Banking Corp. early last year scuttled plans for a joint venture with Liberty. Additionally, Liberty's largest client, M&T Trust Co., is in the process of taking its program in-house.
The hard times among investment marketers could spur a wave of mergers and acquisitions, Mr. Kehrer said. An agreement CUC International struck last year to buy investments marketer Essex Corp. may mark the beginning of this trend.
But Mr. Morgan said that even in these difficult times, Liberty's bank group is having some success. For example, the division has inked deals with about eight small banks in the past few months. The bank group has a number of other deals in the hopper.
Liberty is also working closely with its bank clients to boost sales by targeting investors who deal with nonbank brokers, Mr. Morgan said.
Early this year, Liberty also plans to start helping its bank clients sell life insurance.
