CoreLink Resources, a fledgling firm that plans to set up mutual fund and annuities sales programs in banks, has landed its first two clients.
The company, based in Concord, Calif., signed up two Northern California banks, Bank of Santa Clara and Mechanics Bank, and has several other prospects, said Roger Loar, CoreLink's president.
CoreLink was set up four months ago, with principal backing from Concord Holding Corp., a New York company that distributes bank-managed mutual funds.
Concord and other investors capitalized CoreLink with $5 million.
Oversight of Sales Reps
CoreLink will hire, train, and oversee sales representatives who will be the backbone for the two banks' first retail investment-products programs.
In other options, clients can have their own employees get securities licenses and do the selling themselves or they can bring CoreLink-run programs in-house as they become more comfortable with them, Mr. Loar said.
He concedes that the market is filled with companies that want to sell investment products through banks, but he says CoreLink has a few tricks up its sleeve. Among them: plans for a computer system that will create a data base that banks can use to gain immediate access to customers' investment histories.
CoreLink also holds out the possibility of building up enough bank clients to create proprietary mutual funds from their pooled assets.
Out of the Mainstream
Among clients, mutual fund choices are bank-run funds that Concord distributes. But CoreLink executives acknowledge they may be walking a fine line by including these non-mainstream bank funds in the product mix.
Banks' Proprietary funds "are not something we're stressing over any other groups," Mr. Loar said. "It's up to our clients what funds they sell."
The data base and CoreLink's Promise to keep bank customers' names out of the hands of whatever mutual fund company they choose are reasons Mechanics Bank selected CoreLink over other third-party marketers, said John Rubin, vice president in charge of Mechanics' trust business.
Mechanics senior vice president Steven Barlow had a prior business affiliation with A. Ray Freeman & Co., a broker-dealer for community banks that CoreLink acquired early on. That connection helped CoreLink get in the door, but did not clinch the sale.
Alumnus of Franklin
"We were very impressed by the caliber of their entire team," Mr. Rubin said.
CoreLink has used some of its capital to accumulate blue-chip talent. Mr. Loar was a senior vice president and chief financial officer at Franklin Resources, a big mutual fund company.
Richard Saalfeld spent 20 years with BankAmerica Corp., and was president of Equitec Financial Group, an asset management firm, before joining CoreLink as chairman.
The two executives say they are eager to go after banks that don't have investment products programs and banks that already work with third-party marketers.
The CoreLink officers won't specify whose marketing programs they feel are most vulnerable, but industry speculation is rife.
Observers say Mr. Saalfeld's former connections with BankAmerica make it a natural for CoreLink to go after annuity business the bank farms out to giant GNA and another, smaller, marketing company, Talbot Financial Services.
But Mr. Saalfeld denies that such plans are in the offing