is betting big on third-party marketers as part of its growth strategy for sales through smaller banks.

The company has inked selling agreements with four such firms this year and plans to have third-party marketers account for 40% of its bank sales within two years, up from 20%, said Kevin Rowell, the head of bank distribution.

We think they are somewhat underserved by some of our big competitors, Mr. Rowell said. We know from experience that they represent a terrific distribution outlet.

Alliance's strategy may seem unlikely at a time when many third-party marketers, which typically sell investment products through small banks, are treading water. Over the past several years, banks have increasingly taken their brokerage business in-house, leaving the third-party marketers to fight over a dwindling number of clients.

But Alliance is betting that they still have enough distribution clout to make a difference.

Many small banks have a lock on their community. Mr. Rowell said.

Earlier this month the company inked an agreement with Uvest Investment Services of Charlotte, N.C., to sell its funds. That deal followed a pair made in June with Bisys Group Inc. of Little Falls, N.J., and Raymond James Financial of St. Petersburg, Fla., as well as an agreement reached in January with Fintegra LLC of Minneapolis. Alliance already had distribution arrangements with Essex Corp. of New York and Independent Financial Marketing Group of Purchase, N.Y.

Jean Sullivan, a consultant with Boston-based Cerulli Associates, said Alliance's strategy is sound despite the shrinking third-party market business.

It is a good strategy in that a lot of the larger banks already have their own distribution, she said. To penetrate the second-tier banks, they need distribution through third-party marketers.

There are risks, however, including the possibility that a third-party marketer will go out of business. Several companies have been driven out of bank distribution in recent years.

It is still a risky proposition if you are working with smaller companies, Ms. Sullivan said. You are safest to work with larger third-party marketers -- they are more secure financially.

Though third-party marketers may feel pressure to line up and keep bank clients, they are as picky as banks when deciding who to add to their product provider lists, Ms. Sullivan said.

It's as competitive as getting on anybody else's short list, she said.

Not coincidentally, third-party marketers are demanding more training and revenue sharing from those who want to be on their lists.

Alliance expects to have $1.5 billion of sales through banks in 1999, up from $970 million last year, Mr. Rowell said, because the company has won places on the preferred-provider lists of five major banks this year.

The company's biggest-selling funds through banks are its $12.7 billion-asset Premier Growth Fund, a large-cap growth vehicle, and its $3.4 billion Growth and Income Fund, a large-cap value fund. Alliance's sales pitch centers around the idea that the performance of the two funds combined has beaten the Standard & Poor's 500 over the past five years.

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