The head of Banc One Corp.'s investment products business makes no bones about the miscalculations the company has made in its efforts to sell mutual funds.
"There was this arrogance that we could throw all these personal investment centers up in a year and right away compete head to head with Dean Witter and the like," said David R. Meuse, chief executive of Banc One Capital Holdings Corp. "It just doesn't happen that way."
Banc One, which announced plans in 1993 to build 1,000 personal investment centers in its branches, pulled the plug last year when it was 400 branches shy of that goal.
Now, after a tumultuous period marred by several key defections, the Columbus, Ohio-based banking company is reorganizing for a fresh try at building its investment sales business into a powerhouse.
Investment products are now the company's No. 2 priority - ranking right behind the core business of making loans, Mr. Meuse told an American Bankers Association conference in Miami. "A year and a half ago investments were still called 'alternative products,'" he said.
Banc One's brokers seem to be getting the message. Sales of "packaged investment products" - mutual funds and other pooled securities - were $180 million last November, said Mr. Meuse, who oversees investment products and brokerage. That's up solidly from $70 million a month in the first quarter of 1995.
One reason for the turnaround was Banc One's decision to give clearer marching orders to its affiliate banks, Mr. Meuse said. Traditionally, the holding company gave these units great latitude, delegating most decision- making to its regional bank presidents. But last year, Banc One decided to put a firmer yoke on its retail banking businesses.
Observers are impressed. "There is no question that it was the right move," said Carolyn F. Spitz, a senior consultant with the Spectrem Group, San Francisco. "By putting more centralized control on their brokerage program, Banc One was able to have a uniform approach to marketing and pricing investments products."
Indeed, the company is on track to sell $1.2 billion of mutual funds in 1996, Mr. Meuse said. And it has set a goal of amassing $4 billion of mutual fund and trust assets by yearend, boosting these accounts to $40 billion.
Banc One is still operating more than 600 investment centers aimed at branch customers. But it is also reaching out to high-end customers served by its private client group.
Right now, Banc One has 170 platform sales representatives, and has plans to enlarge its private client group - which pushes mutual funds and securities to customers whose wealth is growing - from 50 to 200 within a few years, Mr. Meuse said.
"I think we will have some natural migration from one investment program to the other," he added. "I don't want us to grow just by going out and hiring a bunch of brokers in a hurry."
Banc One's proprietary One Group of Funds benefited slightly from the revamped marketing effort. The fund family grew more than 12%, to $11.1 billion of assets under management, during the 12 months ended Nov. 30, according to Lipper Analytical Services Inc., Summit, N.J.
