In a unique arrangement, American Express Financial Advisors has joined with a community development bank to sell financial advice as well as investment and insurance products.

The Minneapolis-based financial services company has placed a representative at three of the five branches of South Shore Bank in Chicago. South Shore prides itself on helping to develop lower-income neighborhoods by providing loans and other services to their residents.

Through the agreement, American Express plans to target middle-class African-Americans, making available everything from individual stocks and bonds to mutual funds, life insurance, and long-term health care insurance. The alliance may represent the first time a financial services company with the size and prestige of American Express has teamed with a bank specifically dedicated to community development.

Margaret Cheap, president and chief executive of South Shore, said that companies selling investment products and insurance have missed a lucrative market in the urban African-American population.

And that segment of the market has too often missed the opportunity to invest.

"A lot of our customers are middle-income people who need to be taking advantage of the kinds of services and products we're going to be able to offer them via this strategic alliance," Ms. Cheap said. "It's important that everyone participate in this great market we're in."

The program, which started Monday, may be moved to sister banks in Detroit and Cleveland if the Chicago program proves successful, she said.

It's hard to say whether that will be the case, said John Caskey, an economics professor at Swarthmore College, outside Philadelphia.

Even if the arrangement does not bring in significant profits, American Express may stick with it because it conveys social responsibility, he said.

"American Express is certainly a big, rich company that can afford to offer this product even if it doesn't quite make it in terms of return on equity," said Mr. Caskey. "As long as it comes fairly close, they'll probably sustain it for a while."

The move into investment products reflects a growing impetus to improve poor black communities and stabilize middle-class communities by focusing on more than simply earning more money.

South Shore Bank has a federally sponsored program wherein poorer clients who deposit money regularly into a savings-like account have their money matched dollar for dollar over several months.

The money must be used to buy long-term assets like a home, business equipment, or education, said Robert Weissbourd, vice president of Shorebank Corp., the parent of South Shore.

American Express last year kicked off a similar arrangement with United Bank of Philadelphia, a minority-owned inner-city bank. But United Bank is not a community development bank per se; it is a local bank owned by African-Americans, said Lorenzo R. Wilson, the district manager for American Express Financial Advisors who helped arrange the deal with South Shore Bank.

At South Shore, American Express will target people with household incomes of at least $50,000. There are many such potential customers in the Chicago area, Mr. Wilson said.

"There is a significant amount of economic power pent up there that has been underserved," he said.

To succeed, American Express and the bank will have to familiarize many of its customers with the idea of investing and show them how it's done.

Educational workshops are planned, as are publicity raising events such as a book signing by Kelvin Boston, a personal finance author and television personality who is well known in the Chicago area.

American Express Financial Advisors charges $175 or more to prepare financial plans. Mr. Wilson said he's confident that won't be an obstacle for South Shore's customers.

South Shore Bank has $643 million of assets and expects $9.1 million pretax profits in 1997.

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