Colonial Group Hands Bank-Channel Job to Head Of Sales Through Planners

The mutual fund company Colonial Group has named its fourth head of bank sales in as many years.

The Boston-based fund company, which recently lost its status as the top seller of funds through banks, handed responsibility for its 15-member bank sales staff to Elizabeth T. Sorrells, a senior vice president who already oversees Colonial's sales through financial planners and insurance agents.

Ms. Sorrells fills the slot left vacant by Craig S. Howard, who resigned in May to become regional sales manager for Colonial's larger rival Federated Investors, Pittsburgh.

After two years at Colonial, Ms. Sorrells is taking over bank sales at a crucial time in the company's history. Colonial was recently acquired by its Boston neighbor Liberty Financial Cos. In addition, its bank division has had trouble keeping top people in recent months.

The turmoil has taken its toll; one of the first fund companies to hawk its wares through banks, Colonial is now considered a second-tier player.

"A lot of our competitors looked up and took notice" of Colonial's success, said Ms. Sorrells. "We were bound to lose market share."

But Ms. Sorrells is confident that she can turn things around. "We haven't lost any significant relationships," she said. Chase Manhattan Corp. and BankAmerica Corp. remain among Colonial's largest clients.

In addition, Liberty has taken steps to shore up Colonial's position in all of its sales outlets. The parent company recently raided an industry giant for an executive to head Colonial's marketing and business development.

Liberty last month hired Stephen Gibson, the former head of corporate and retail marketing at Putnam Investments, one of the nation's largest mutual fund companies. He has also been head of marketing at Kemper Corp., another fund company giant.

"He was brought in to shake things up," said Louis Harvey, president of Dalbar Financial Services, a Boston-based research firm. "At Putnam he was very well respected," but he was a "small pebble on a large beach."

Colonial has suffered in bank sales partly because of its emphasis on fixed-income portfolios. Thanks to a bullish stock market, banks have been emphasizing domestic equity portfolios that generate income and growth for customers.

"It's got to be frustrating for a bank sales person to not have anything to sell to banks," said Neil Bathon, a partner in Financial Research Corp., a Chicago-based company that tracks mutual funds.

According to Mr. Bathon, Colonial manages $15.6 billion of assets, with 66% in bond funds, 22.5% in domestic stock funds, and 11.5% in international stock funds. The company has lost market share steadily since 1992, according to data from Mr. Bathon's company.

Ms. Sorrells agreed that the company's promotion of domestic stock funds had been "weak." But she intends to persevere with a new focus on the company's four equity portfolios.

She is also planning to customize training programs for important bank clients. For instance, Colonial is developing referral prospecting programs for bank employees.

And the marketing department is cooking up "investor guides," pamphlets that Colonial salespeople will dole out to bank investment representatives as part of the company's promotional materials.

Moreover, Ms. Sorrells is making sales at Liberty's third-party marketing subsidiary, Independent Financial Marketing Group Inc., a "key focus."

A former tax lawyer and author of financial planning books, Ms. Sorrells does not believe her lack of experience selling through banks is a hindrance. "From a management standpoint, they didn't have people in the banking channel with heavy experience," she said.

"I've had 15 years' experience of building and maintaining relationships," she added. "While the banking channel is unique, relationship building is not."

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