American Funds is encouraging banks and brokers to sell its 29 mutual funds by introducing back-end sales loads that let customers pay fees when they cash out rather than during the initial investment.

And institutions that sell the American Funds said they are pleased with that shift.

"I perceive it to be a real plus for the American Funds family," said Ronald DiCicco, senior managing director at Comerica Securities Inc., a unit of Comerica Inc. of Detroit.

The fund company offers a lot of good products, he said, and "this just makes it that much easier for the reps to consider the American Funds."

The Los Angeles-based fund company, a unit of Capital Research and Management Co., is making the switch to so-called B shares in March. It is one of the last major fund groups to do so. "I think they're really just coming up to where the other companies are in terms of pricing options," said Jeannie Holliday, product manager at Invest Financial Corp. of Tampa, which sets up brokerages for banks that are too small to own one or do not want to.

Back-end loads require investors to pay sales commissions if they cash out within a certain period; they are particularly popular in bank sales programs, partly because of the ease of selling funds that charge nothing up-front.

"With just A shares, you're really going upstream with most banks," said Francis Strazzeri, American Funds' national sales director for banks. A shares charge a front-end sales load, requiring the investor to pay a charge up-front.

Indeed, an internal study several years ago by Financial Network Investment Corp. of Torrance, Calif., showed that brokers at banks and credit unions tended to sell 40% more B shares than did independent financial planners, said Duane Shoop, who heads the company's financial institutions division.

American Funds, the third-largest fund company in the United States, according to Financial Research Corp. of Boston, has not traditionally been a huge player in the bank marketplace. It competes in the bank channel with companies like Putnam Investments of Boston, Franklin Templeton Group of San Mateo, Calif., and Aim Management Group of Houston.

But Mr. Strazzeri said American Funds' business through banks is growing rapidly, and the company posted a sales increase of 27% through November, as well as a 12% jump from yearend 1997 to yearend 1998. He declined to give figures but said American Funds could be among the top five sellers through banks by the end of 2000.

Several years ago American Funds had to turn banks away because it lacked the wholesaling force, Mr. Strazzeri said. Today, however, with 60 field wholesalers working all distribution channels, 70 in-house wholesalers, and another 15 who work exclusively with American Funds' 401(k) products, the company is "in a position where we can cover the banks," he said.

American Funds are sold through about 70 banking companies, but the company maintains "strategic partnerships" with 14, a distinction that entitles them to added attention. Banking companies on the strategic partnership list include First Union Corp. of Charlotte, N.C.; PNC Bank Corp. of Pittsburgh; and Marshall & Ilsley Corp. of Milwaukee.

American Funds had $316.9 billion of assets in long-term and short-term mutual funds on Nov. 30, according to Financial Research Corp. Fidelity Investments of Boston, with assets of $749.5 billion, and Vanguard Group of Valley Forge, Pa., with $534.09 billion of assets, are No. 1 and No. 2 in the United States, it said.

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