In a year when mutual funds are having mixed success with retail customers, AIM Funds' second-quarter bank channel sales rose 94% from the year earlier.
If the current trend continues, the Houston company's mutual fund sales through banks could reach $7 billion to $8 billion by yearend, up from $4.5 billion last year, said Michael Vessels, AIM's head of bank sales.
Mr. Vessels said the fast growth is a result of index-beating performance by many of the company's equity funds, improved marketing strategy, and a longstanding effort to build stronger relationships with bank salespeople.
Thirty-three of its equity portfolios are beating the Standard & Poor's 500 for the year, and this performance is attracting both short-term and long-term investors, he said.
This year AIM plans to increase its sales and marketing staff by four, to 48, and increase its contacts with banks, said Scott Burman, sales desk manager. Mr. Vessels said the company is also expanding the kinds of service its wholesalers offer to bank representatives.
"Banks expect regular contact," Mr. Vessels said, and AIM's wholesalers try to visit roughly 500 clients per quarter. Since bank salespeople are generally more spread out geographically than brokers, fund wholesalers must make try harder in order to reach them and gain their business, he said.
AIM has worked to increase its visibility to banks by hiring more wholesalers and dividing geographical responsibilities into 21 regions - up from seven in 1994 - with 750 to 1,000 bank representatives in each, Mr. Vessels said.
The company also recently hired a sixth director of key accounts, Joe Sprague. Spending extra time with important accounts is crucial because the top 50 banks do roughly 80% of mutual fund business in the bank channel and AIM's clients include virtually all major banks, he said.
Last year AIM was the No. 2 seller of funds through banks, right behind Putnam Investments and ahead of Franklin Templeton, according to Kenneth Kehrer, president of Kenneth Kehrer Associates of Princeton, N.J.
Though AIM does not anticipate dislodging Putnam as the bank sales leader, its first-half growth suggests that it could surpass Putnam's 1999 bank sales - which Mr. Kehrer put at $7.5 billion - by yearend.
A spokesman for Putnam said the company does not reveal its bank sales. A call to a spokeswoman for Franklin Templeton was not returned by press time.
Mr. Vessels said that the fund wholesale business has changed dramatically in the past decade and part of AIM's success has been its ability to adapt to the changes.
As recently as five years ago most of its sales work consisted of account managers pitching new products to bank representatives, he said. Today few representatives want to hear about new products at first. Brokers now expect fund companies to offer products and services that will help increase their business, Mr. Vessels said.
To meet this demand, many fund companies have developed advice-based products for sales representatives and consumers.
This year AIM introduced a broker-education tool called "80-20: How to Guide Your Business to Fee-Based Success." The program - named for the notion that brokers spend just 20% of their time cultivating clients who provide 80% of their business - is designed to help them focus on their most important clients, Mr. Vessels said.
