Alliance Capital Management to Split Off Bank Sales Staff

Alliance Capital Management, seeking to increase its mutual fund sales through banks, plans to develop a sales and support staff dedicated to that distribution channel.

The New York-based fund company plans to hire a national sales manager for banks and put that person in charge of 14 bank wholesalers, said Richard A. Davies, managing director of its financial institutions and advisers division.

Seven traveling wholesalers would be spun off from a cadre of 14 wholesalers who now handle banks, financial advisers, and financial planners. The others would continue to focus on advisers and planners.

The seven, who would travel throughout the country, would be backed by an equal number who would provide support services to banks over the phone. The changes are to be completed by the end of the first quarter, Mr. Davies said.

A "handful" of new wholesalers would be hired as part of the effort, an Alliance spokesman said.

Splitting the sales forces represents Alliance's most recent bid to reinvigorate its bank distribution business. Alliance saw its bank sales fall after the 1994 bond market slump, which hurt some of the company's most popular funds.

Although Alliance now boasts a diverse family of equity funds, it has also struggled to change its image as a bond fund company.

Alliance reorganized its sales force in late 1996 to focus more on banks, planners, and advisers, and moved from a geographic to a distribution-channel-focused sales structure. It also nearly tripled, from 5 to 14, the number of wholesalers in its financial institution and advisers division.

Aware that shelf space at banks is tight, Alliance plans to woo banks by providing training. Rather than copying fund companies that teach bank sales forces how to sell mutual funds, Alliance will show them how to develop referral prospects-"to get them in the chair," Mr. Davies said.

The training effort will be headed by Patrick Walsh, who joined Alliance early this year to garner more bank business and provide sales training. An Alliance spokesman said Mr. Walsh's role has not been diminished but has become more focused.

A. Michael Lipper, the president of Lipper Analytical Services, said Alliance needs more "consistency of product" to succeed in the bank channel.

That means offering funds that perform consistently and are easier to understand. Alliance has a significant business in institutional asset management, where complicated instruments like derivatives are used, but it cannot use that approach with banks, Mr. Lipper said.

One bank brokerage executive who asked not to be identified said Alliance has lost out to other fund companies simply because it does not spread around the perks that some companies do-such as trips to Hawaii and weekend golf outings.

"That's generally what swings these reps" from one fund company to another, the executive said.

Mr. Davies said that providing quality products and services is a better long-term strategy.

"It is not our style to try compete on better trips and better golf balls and more expensive entertaining," he said. "That's not how we would want to be known in the industry."

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER