American Skandia Inc., which is known for variable annuities, plans to change its image this year.
The Shelton, Conn., company - owned by Skandia Insurance Co. of Stockholm - will mount a campaign to sell its four-year-old mutual funds and its soon-to-be-launched wrap products to banks, financial planners, and wirehouses.
American Skandia is the fourth-largest seller of variable annuities through banks. It sold $215 million that way in the third quarter, according to Kenneth Kehrer Associates of Princeton, N.J.
Bayard Tracy, senior vice president and director of sales for American Skandia, said that over the past four years the company has been building its product line to include mutual funds - and now offers 200. This month it will launch its first wrap product, and more will be offered later in the year.
Michael Murray and Patti Abram were promoted to the initiative. Their responsibilities include developing new products to be sold through banks, financial planners, and wirehouses.
Mr. Murray was named the senior vice president/national markets director for mutual funds. He said his goal is to make American Skandia one of the top five mutual fund companies over the next two years.
The company did not release specific figures about its bank channel mutual fund sales, but Mr. Murray said he aims to sell $5 billion of funds through all channels this year. He also said he plans to create new products and increase the number of distribution outlets for the funds.
"We haven't had a long track record inside banks, with regard to Skandia's mutual funds," but the company is seeing more interest from banks with which they already have relationships, Mr. Murray said.
Ms. Abram was named the senior vice president/national markets director for life insurance and wrap products. She will manage the new wrap product, the first offered by American Skandia.
Wrap products charge fees based on assets under management instead of commissions. The minimum portfolio size for the first product will be $250,000, and the products to be introduced later in the year will have higher minimums, she said. Each distributor will set its own wrap fee.
American Skandia's goal is to sell $330 million of wrap products this year, but "I think that's conservative," Ms. Abram said. In the conversations she has had with Skandia's bank clients, "there's been a wonderful response" to the products, she said.
Before the promotion Mr. Murray was the national sales director for American Skandia's financial institutions channel. In 1997 he had helped launch the American Skandia Advisor Funds. Ms. Abram had been the national sales director of variable life insurance.
American Skandia also plans to help financial professionals sell the wrap product by providing questionnaires and other marketing tools to help identify prospects.
"It's an opportunity to take existing clients with existing portfolios and convert them from passive management to active management," Ms. Abram said.
Mr. Tracy said the products would be sold in all distribution channels. There are some minor differences between the way bank customers and wirehouse customers use the products, but in both cases "you're selling to the customer, you're not selling to the rep," he said.
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