Fleet Financial Group is taking its Galaxy family of annuities in a new direction.
Fleet, which more than two years ago became the first bank to manage its own annuities, has decided to share the stage with some prominent money management firms.
The Providence, R.I., banking company has unveiled four variable annuity portfolios managed, respectively, by T. Rowe Price Associates, Baltimore; Scudder, Stevens & Clark, New York; Berger Associates, Denver; and Invesco Funds, Denver. The offerings are an international stock fund, an international bond fund, and two domestic equity funds.
Fleet's own money management arm will continue to manage 10 portfolios - six that offer a fixed rate of return and four whose returns vary with market conditions.
Thomas N. Howe, managing director of Fleet Investment Services, said a trio of customer surveys convinced the company that it should add annuity portfolios managed by "a select complement of high-quality, well-known investment advisers."
The shift to multiple managers is in keeping with the practice of Fleet's annuity underwriter, American Skandia Life Assurance Co., Shelton, Conn.
Skandia, which issues the insurance contracts that transform the Galaxy portfolios into tax-deferred investments, uses several of the same money managers for its own variable annuity family.
Indeed, industry observers speculated that Skandia - which beat Fleet in announcing the lineup of money managers - may have pressed for the changes, believing the addition of big-name managers would fuel sales. The Galaxy annuities have attracted $120 million of assets since their launching in December 1992, according to Fleet.
Kenneth Kehrer, an annuities consultant in Princeton, N.J., said the expansion makes good sense. "The state-of-the-art annuity product is the multimanager product," he said.
To step up the sales effort and introduce the new products, Fleet has done "extensive training in bank branches during (the) past three weeks," Mr. Howe said in a telephone interview. The aim was to "get bank personnel to understand the advantages of tax-deferral."
The 95 licensed investment specialists who work in Fleet offices have received similar training, he said.
