Nationwide Financial Services Inc.'s sales of variable annuity in the bank channel rose 26% in the first quarter from a year earlier, to $402 million.
According to data from Kehrer-Limra International Inc., Nationwide went from fifth place to fourth in market share in the bank channel in the period.
Dave Giertz, the president of financial institutional sales for Nationwide Financial Distributors Inc., said a "consultative" sales process the company has been using since September has helped it make more variable annuity sales.
In the past eight months Nationwide has come out with new annuities and started a family of mutual funds in an effort to deepen its penetration and increase sales in banks.
"Many banks would prefer to work with fewer wholesalers that can offer a wider array of products," Mr. Giertz said in an interview last week. "Banks would prefer to work with one person that can offer a broad array of solutions. It just makes things simpler."
To launch the fund family, Nationwide Financial bought NWD Investment Management, formerly Gartmore Global Investments Inc., from Nationwide Corp. in early May. (Nationwide Financial and Nationwide Corp. are part of the Nationwide group of companies, which is led by Nationwide Mutual Insurance.)
Nationwide Financial renamed the Gartmore Funds the Nationwide Funds. The fund family had $30 billion of mutual fund assets under management as of May 1.
Mr. Giertz said Nationwide Financial plans to add to its lineup of mutual funds later this year or in 2008.
Nationwide Financial's agreement to buy NWD was announced in April. Michael Butler, Nationwide Financial's vice president of mutual fund strategy, said at the time that the retail mutual funds would use outside investment management companies as subadvisers.
Mr. Giertz said last week: "We wanted to be a quarterback in the field, and to really be a strong general wholesaler we needed to be able to offer mutual funds. We identified a need.
"We knew we needed to bring a broader array of solutions and mutual funds needed to be part of our investment solutions," he continued. "Now that we have mutual funds, we have the opportunity to offer tax-deferred and taxable solutions."
Nationwide Financial has also added variable annuity riders. Its portfolio includes the Nationwide Lifetime Income Rider, introduced last year, and the Capital Preservation Plus Lifetime Income, start introduced in 2005. Mr. Giertz said the riders offer consumers two lifetime income withdrawal options.
Analysts said Nationwide Financial is well positioned to boost its variable annuity sales through banks despite heavier competition.
Kenneth Kehrer, the research director at Kehrer-Limra, said one way companies could stand out in this increasingly crowded field is "to update products" they already have instead of trying to "stay ahead of the curve in terms of innovation."
Mr. Kehrer said one-fourth of the 32 banks and third-party marketers his company surveyed last year said they wanted to work with fewer wholesalers. But one-fourth said they wanted to work with more wholesalers.
"In banks, it comes down to how they are organized," he said. "Some banks keep their mutual funds and their variable annuity sales quite separate, and really when it comes to selling products to these banks, there is no advantage to having more products."
Nationwide Financial's bank variable annuity sales rose 51% last year.
"As always, things fluctuate, and the pace of 50% year-over-year growth is a challenging pace to maintain," Mr. Giertz said. "But our goal is to maintain that pace and to continue to be among the top five providers, and I expect us to be able to do that."
He said Nationwide Financial wants to add to its roster of bank clients. Currently 80% of the Columbus, Ohio, company's sales come from 20 banks and 90% of sales come from 28 banks.
"I think all banks are good clients for us, but we have had success with larger banks," Mr. Giertz said. "We want to be able to drill down and generate more sales from a broader group of banks."
To do so, Nationwide Financial has been adding wholesalers In the first quarter it increased its general wholesaling force by four, to 33.
