Bank One Corp. is betting that branch employees can take its investment product sales to new heights-so much so that it is gearing up to license 500 more front-line employees as brokers.

The expansion would boost to 2,500 the number of Bank One branch workers who hold Series 6 licenses, which permit them to sell mutual funds, annuities, and variable life products.

A Series 6 sales force of that size would put Bank One neck-and-neck with First Union Corp., the banking industry leader, according to Kenneth Kehrer Associates, Princeton, N.J.

Michael J. Reed, the veteran bank brokerage executive who is spearheading the effort, says that by tapping into ordinary retail bank customers' growing appetite for investment products, Chicago-based Bank One expects to boost branch investment sales by 20%, to $4 billion, this year.

By harnessing front-line employees to sell investments, Bank One is casting its vote for the future of branches-and affirming the appeal of the rank-and-file customers who frequent them.

"I don't know why people say, 'There's nobody going to the branch.' The ones I go into have a line," said Mr. Reed, who is president and chief executive officer of Banc One Securities Corp., the $261 billion-asset banking company's brokerage arm.

Retail customers, he says, can be overlooked by brokerages that focus on high-net-worth customers.

"The rich, the wealthy, the affluent-they're the only ones that can access this. That has served some firms well. But what about all these (branch) customers?," Mr. Reed said.

The strategy is no slam-dunk, however. Some banking companies are moving away from so-called platform sales programs, having concluded that bankers who double as brokers lack the sophistication needed to help customers with financial planning and investment decisions.

"Rarely does a customer come in and say, 'I've been thinking about this for months and I must roll over an IRA today,'," said Jack Cussen, senior vice president of Summit Bancorp's financial services group.

Summit, a $33 billion-asset banking company in Princeton, N.J., scrapped its Series 6 program a few years ago. Now, he said, "rather than selling products, we have Series 7 reps dedicated to the planning process. We feel there's more professionalism."

Series 7 representatives-full-time brokers who are licensed to sell a full range of securities-are part of the scene at Bank One, too.

The company employs 600 of them, and deploys them as coaches or "team leaders" to the branch-based brokers.

Mr. Reed says having full-time brokers work with experienced branch employees is an effective way to harvest sales.

Branch employees are poised to field the more straightforward transactions, such as helping customers who want to move out of certificates of deposit and into mutual funds.

They also help set the stage for more in-depth dealings between customers and Series 7 brokers. As Mr. Reed sees it, customers won't come back for investment advice if their simple requests are turned away.

Banc One Securities offers its retail customers a range of mutual funds and annuities. Its preferred list consists of the One Group, Bank One's proprietary funds, and products from AIM, Alliance, Fidelity, Franklin- Templeton, Kemper, OppenheimerFunds, Putnam, and Van Kampen.

Programs that combine Series 6 and Series 7 brokers-"hybrid programs," in brokerage parlance-are becoming more commonplace.

Among bank-affiliated brokerages, 48% took this approach in 1998, up from 39% in 1997, according to data from the Kehrer firm. Two percent used only Series 6 brokers; the remaining 50% used only Series 7 brokers.

Still, it is the breadth of Bank One's Series 6 sales force that sets it apart from most banks with hybrid programs. By yearend, when all 2,500 Series 6 brokers should be on board, every one of the company's 2,000 branches will have at least one broker in residence, Mr. Reed said.

Mr. Reed sees these branch brokers as the foot soldiers in Bank One's campaign to cement its relations with mass-market customers.

"They're the ones that are in contact with the customers every day," he said. If branch employees are on board in viewing investments as an integral part of the bank's offerings, "then we've got a fighting shot at being successful."

Some 500 of the company's platform brokers have gotten their credentials since October, when the former Banc One Corp. merged with First Chicago NBD Corp.

While Banc One had long experience with the platform investment sales strategy, the approach is new to First Chicago branches.

Mr. Reed is a true believer in branch-based investment sales, having honed the technique at the brokerage arm of Valley National Corp. in Phoenix, which Banc One acquired in 1993. He was named head of brokerage services for the old Banc One in 1994, and quickly began introducing platform sales throughout the company.

In addition to overseeing retail investment services, Mr. Reed is responsible for brokers who work with clients of private asset management and corporate banking. Roney & Co. of Detroit, a 330-broker operation acquired by First Chicago, also reports to him, but operates independently.

The platform sales strategy suffered at banks in the past because there was not enough traffic to sustain them, said David F. Toth, a Banc One veteran who is now a senior consultant at San Francisco-based Spectrem Group.

"A lot of the programs out there were started in earnest with the idea that there would be a lot of transactions, but in reality there weren't," Mr. Toth said.

But that is changing, he said. "There is more of a commitment by banks to service investments and that has not gone unnoticed by the public."

Platform programs also suffered from weak support from bank management and problems in supervising salespeople in the field, said Richard S. White Jr., executive vice president of the capital managment group of SouthTrust Corp. in Birmingham, Ala.

Mr. White said those problems are surmountable; indeed, his banking company is training 10 bankers in Atlanta for a test of platform sales. Its brokerage has 112 Series 7-licensees covering more than 600 branches.

Platform sales are appealing because they give customers another choice about how to get access to financial services, said Ellen McKay, principal of Optima Group Inc., a consulting firm in Fairfield, Conn.

And hybrid programs can be an efficient way for banks to deliver these services.

Series 6 salespeople typically spend 20% to 30% of their time on investments and the rest on banking, Ms. McKay explained. "It's certainly not their full-time job. It frees the Series 7 up to work on the higher ticket," she said.

"Banks can't really afford to put Series 7 brokers in every branch. It's too expensive, and there's not enough flow to warrant it," she added.

As he looks down the road, Mr. Reed acknowledges that new distribution techniques are changing the brokerage business.

The Internet, in particular, looms large in Bank One's strategy.

The company's Web site offers customers a link to E-Trade. And an on- line trading service of the former First Chicago will be available to all Bank One customers by June.

But for now, Mr. Reed has no doubt that the tried-and-true technique- "going face-to-face with the people"-will work for Bank One.

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