Bank of America is now offering a retirement plan product to its small- business customers.

The two-month-old Daily Advantage Retirement Program, administered by Bisys Plan Services, is a pared-down version of the bank's 401(k) plan for larger businesses. While it offers fewer mutual fund selections than the larger version, the small-business plan covers all investment strategy possibilities, bank officials said.

Bank of America is marketing the plan to existing clients through its retirement planning division, headed by David Weymouth, senior vice president and director of retirement services.

After signing on with a retirement plan specialist, a small business makes eight selections from 15 no-load mutual funds available through an investment specialist at BA Investment Services, BankAmerica Corp.'s broker-dealer subsidiary. The brokers and retirement specialists do not offer investment advice.

The San Francisco bank pays its officers incentives to sell the plan to their small-business customers, according to a spokesman.

Creating the program is easy, said David Master, a consultant at the Optima Group, Fairfield, Conn. Making it profitable is not.

"The vast majority of folks you come into contact with don't have a lot of assets," Mr. Master said, "so the question is, do you have a long enough time frame so eventually it brings in revenue? It could be about five years because many small businesses do not match (employee contributions), and that's a real tough planning horizon for most institutions."

Robert Wuelfing, a consultant at Access Research, Windsor, Conn., said outsourcing the administration to Bisys was a smart tactic because Bank of America would be able to take advantage of Bisys' size and economies of scale. Little Falls, N.J.-based Bisys supports more than 5,000 corporate- sponsored retirement plans.

A bank's best opportunities are cross-selling the service to existing customers, Mr. Wuelfing added, in order to keep up in the competitive small-business arena. There is no shortage of retirement plan options, he said.

"In the small-business market," Mr. Wuelfing said, "over half of those with 401(k) programs use their primary credit bank."

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