Sales of equity mutual funds at banks have fallen off sharply in recent weeks.

But executives at bank brokerages say investors are heeding brokers' advice not to panic and cash out of stock funds.

"We're not seeing redemptions or anything to indicate that our customers are doing anything but staying on the sidelines for a while," said Dwight Moody, president of First Union Corp.'s retail broker-dealer.

Sales at First Union, based in Charlotte, N.C., are running 15% below where they were earlier in the year, Mr. Moody said.

On the other side of the country, Washington Mutual Inc.'s retail brokerage is seeing stock fund sales 10% off the pace set earlier in the year.

"There is no doubt we're running a little shy of where we thought we would be," said Pamela Dawson, president of retail brokerage for the Seattle-based bank.

Maryann Bruce, head of bank sales for OppenheimerFunds, New York, said sales through banks were off in September by a third from previous months.

Ms. Bruce said September would prove to be "a tough month for everybody." Investors "are not necessarily pulling money out, they are just not committing new resources," she said.

If the rate of sales the two bank brokerage executives reported holds true for banks nationwide, financial institutions have suffered less in the market correction than the fund sales industry at large.

Across all sales channels, including direct sales, stock fund investments declined 25% in August from July, according to data issued last week by the Investment Company Institute. Redemptions also rose, and as a result, the equity mutual fund category saw its first month of net outflows since September 1990.

In all, investors in equity funds took out $11.2 billion more than they invested during August, the institute reported.

Hybrid mutual funds had a net sales loss of almost $900 million in August, while bond funds had net inflows of $5.8 billion. Bond fund sales in August were down 15% from July.

In another sign of investor caution, investors redeemed far fewer shares than normal of money market mutual funds, resulting in record net sales of almost $51 billion in August.

Many investors and brokers were not in the game the last time the stock market had a major correction, in 1987, and many in the industry had wondered aloud how they would react when the bull market turned bumpy.

Bank brokerage chiefs said that they have been preparing their sales representatives for a possible downturn, and those brokers have drummed home the message to clients that they should not bail out of stock funds.

New sales of stock funds at Amcore Financial Inc.'s broker-dealer, in Rockford, Ill., fell by 15% in August before rebounding to normal levels in September, said Alan W. Kennebeck, president of the brokerage.

"The industry has done a pretty good job of educating people," Mr. Kennebeck said. "We try to teach them to think long term, and maybe people are thinking in those terms."

Brokerages and mutual fund vendors have been advising brokers not to panic and have their clients shift money to bond and money market funds, and the banks contacted reported that few investors had shifted money into the more conservative asset classes.

"It's a sign that what we've been preaching works," said Karen Banks, president of Frost National Bank's brokerage, in San Antonio.

Ms. Banks said she has seen no drop-off in equity fund sales at her unit.

Outside mutual fund companies that sell through banks have made extra efforts to educate and reassure bank brokers in the midst of the market turmoil.

Putnam Investments executives have had conference calls with hundreds of brokers at banks like First Union and BankAmerica Corp., said David Edlin, director of the Boston-based fund company's bank sales division.

Four chief investment officers took to the phones for a conference call on Sept. 2 with 1,500 brokers, two days after the Dow Jones industrial average plummeted more than 500 points. Their aim: to provide perspective on the market developments.

Another conference call is planned for Oct. 19, a few days after third- quarter fund statements will come out, Mr. Edlin said.

"We want to arm the investment advisers with our latest views on the market," he said. "These guys have gotten pummeled in the last 30 days by their clients. They must remind them why they invested in the first place and reinforce their long-term goals."

Bank brokers are often more dependent on fund companies for information and perspective on the markets than are sales representatives at big brokerages, who often have computerized market information at their fingertips.

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