Bank investment representatives' pay is climbing as banks structure more attractive pay packages to compete with nonbank brokerages.

The rising pay levels are detailed in a just-released survey of 1,905 bank investment reps by the Bank Insurance Market Research Group, Mamaroneck, N.Y.

The survey found that their median pay last year was $68,000, up 24% from 1994, the last time the survey was conducted. The average compensation last year was $70,673, up 16% from 1994.

Furthermore, it looks like more bank investment reps are cracking the six-digit salary mark. Thirty-one percent of those surveyed earned $100,000 or more, up from 11% in 1994 and 16% in 1992.

While some of the increase can be attributed to the bull market, another large factor is that banks are restructuring their compensation packages to compete better with wire houses and regional broker-dealers, said Andrew Singer, the author of the study.

"I'd say some banks see their competition not necessarily as the bank down the street but also the brokerage firm down the street," he said.

Paul Werlin, president of Human Capital Resources, an executive recruiting firm in St. Petersburg, Fla., said that nonbank brokers are probably seeing their overall pay increase at about the same rate as bank employees, based on gross sales. But banks are doing more now to lure and keep sales talent.

"I'm seeing a desire by banks to reward and retain top people," he said. "So payouts to brokers are increasing at the high end."

A few are offering deferred compensation and stock options, as wire houses have for years, he said. But more are taking the simpler step of increasing the percent of gross sales their brokers take in commission.

Here's how that works. Most banks pay their sales specialists on a sliding commission scale based on monthly production. When the revenue the specialists bring in reaches a certain threshold, their share of the commission rises.

In the research group's survey, the beginning rate was 20 to 25% of the bank's overall commission, rising in many cases to 40% after $40,000 in revenues were raised in a particular month. Comparable statistics for previous years are not available.

Pay levels outside banks are still considered to be somewhat higher than within banks, said Mr. Singer. Indeed, in 1995, median earnings for all retail registered representatives-inside and outside banks-was $78,856, according to the Securities Industry Association.

Ed Hipp, president and chief executive officer of Centura Securities in Rocky Mount, N.C., said he makes a point of offering pay packages that are comparable to those offered at wire houses and regional broker-dealers. His compensation packages are structured on the sliding-scale commission model.

"My basic business philosophy is that we're a brokerage firm that happens to be owned by a bank," he said. "Therefore, we have to be able to offer competitive products and attract competitive talent that's as good as or better than our Street competition. You don't get that with a stingy payout."

Banks started moving to the commission system just a couple of years ago, said Mr. Singer. Some banks had hesitated to take the step because they feared regulators would object to an anticipated increase in sales pressure.

But the flat-fee era is gone, said Mr. Hipp, at least for banks that want to succeed in the investment business.

"Banks that are really trying to instill a sales culture in the overall bank are very progressive in looking at how brokers are compensated," he said. "More traditional banks are more salary-based. I think it's the former that will survive."

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