Michael Suh, a 25-year-old New Jerseyan, has bought everything from blue-chip stocks to mutual funds through brokers who work for banks. And when the market took a dive Monday, Mr. Suh held tight.

"I'm not really worried about it," Mr. Suh observed. "I'm looking for a long-term strategy."

Many other customers of bank brokerages evidently feel the same.

According to bank brokerage chiefs and executives at mutual fund companies, bank customers coped just fine with Monday's rout, which saw the market complete a 13% plunge from its August high. Working hard to balance a longtime reputation as trustworthy depositories with their new role as brokerages, many banks have been preparing for a market correction for months.

CoreStates Financial Corp., for instance, sent a mailing last month to its high-net-worth customers-the bank's most active traders-advising them not to panic in the case of market drop. The Philadelphia banking company has also been training its retail investment reps on how to talk to customers during a correction, said Teresa Buck, president and chief executive officer of CoreStates Securities Corp.

Similarly, executives at investment units of Fleet Financial Group, Boston, and First Union Corp., Charlotte, N.C., said they were reaching out to customers this week to ward off panic.

"We're basically saying, 'Stay the course,'" said Robert Ash, a managing director at Fleet Investment Management. "'Your investments have been set up for the long term, and that is taking into consideration short-term volatile and stable markets.'"

To be sure, the downturn could trigger a wave of class actions by disgruntled mutual fund investors. Banks are significantly vulnerable to these suits because plaintiffs' lawyers can claim the consumer thought the product was covered by deposit insurance.

"When investors' fortunes go south, the risk of litigation is always higher than when the market is robust," said a senior financial regulator. "As a safeguard to banks in the event of a market downturn, it is very important that examiners and bankers continue to realize the significance of appropriate disclosures."

(For more on regulators' response to the market downturn, see page 2.)

But strict attention by regulators and the threat of costly lawsuits have given banks strong incentives to make the proper investment disclosures, said L. William Seidman, who was chairman of the Federal Deposit Insurance Corp. during the 1987 stock market crash.

Banks have done "a reasonably good job" of telling people about the riskiness of investment products, Mr. Seidman said. He estimated that 95% of bank customers understand that an equity fund bought from a bank is not insured like a checking account.

Bank brokerage chiefs also say that most of their customers are in the markets for the long haul. John McCune, president and chief executive of Norwest Investment Services Inc., the brokerage subsidiary of Minneapolis' Norwest Corp., said his shop actively discourages whim buyers.

"People shouldn't be trading for the day, and that's not the kind of client we're looking for," he said.

Speaking Monday evening, Mr. McCune said he talked to his troops during the debacle, urging caution, and would continue to do so. Like other brokerage chiefs, he also told his sales force to look out for buying opportunities.

"If you loved it at $10 and it's now $8, it's like having a fire sale," he said.

At the mutual fund companies that sell their wares through banks, executives said bank customers' portfolios are well-diversified and therefore largely insulated from the market's correction.

"I'm not hearing any short-term concerns," said Michael W. Kellogg, executive vice president in charge of bank services at Fidelity Investments, Boston. "The conversations we're having are putting this into the context of long-term performance."

Though the majority of Fidelity's business through banks has historically been sales of equity and money market mutual funds, bank clients have had an increased appetite for fixed-income funds in recent months, Mr. Kellogg said.

Lisa Jones, a senior vice president at Massachusetts Financial Services and director of its financial institutions group, said she saw no increase in phone calls or redemptions Monday. The fact that bank brokers weathered the bond market debacle of 1994 enabled them to prepare their customers well for this week's stock selloff.

"That taught everybody such a strong, strong lesson" to diversify allocations through bank investment programs, Ms. Jones said. "Consumers are more sophisticated than they were before, and more patient."

That's good news for all brokers but especially for those at banks. Unlike other investors, many bank customers have just come around to investing in stocks, making them ripe for panic at the first sign of trouble.

But Monday, bank customers proved themselves a savvy lot. And their brokers are working to keep them that way.

"In more cases than not, we are seeing people wanting to come in and buy low. We're trying to calm them down," said David W. Dunning, senior managing director of NatCity Investments Inc., the retail brokerage arm of National City Corp.

"They're seeing this as a buying opportunity, and we're asking them to wait and see how things shake out in the market. The volatility is going to be too strong over the next two days, and we want to see when the right opportunity is."

Mr. Dunning said Monday was nothing like the crash of 1987, when he was working at the retail brokerage of Mark Twain Bancshares, which has since been bought by Mercantile Bancorp., St. Louis.

"In 1987, clients were calling and panicking. We didn't see that Monday."

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