Bankers Trust New York Corp., inching back into the world of retail banking that it abandoned 13 years ago, is hiring a seasoned mutual funds veteran to help develop new consumer products.
The nation's ninth-largest bank company has tapped Rodger Lawson, former president of Fidelity Investments retail services group, as a "fulltime consultant." He will advise Bankers Trust on developing retail products and strategies, a bank spokesman confirmed.
Mr. Lawson, 45, will work for Edward Lesser, who runs Bankers Trust's lucrative ProfitCo division. The unit, which includes securities processing, investment management, trust, and private banking, appears to be the designated incubator for the bank's incipient push into retail.
Mr. Lawson, a Briton, joined Fidelity in 1985 and oversaw its massive mutual fund and brokerage operation -- including its back-office and marketing activities -- until he resigned last spring.
Previously, he was a vice president of marketing at Dreyfus Corp. A Fidelity spokeswoman said $80 billion of the company's $150 billion in assets involves retail customers.
"He's clearly bright, high energy," said Michael Lipper, president of Lipper Analytical Services, which tracks mutual fund performance. "He would make sense if [Bankers Trust] wanted to build a retail distribution system themselves."
Thomas Parisi, a company spokesman, would not specify Bankers Trust's plans, although he and other officials said the company has no intention of reentering the bricks-and-mortar world of branch banking.
Mr. Lawson will develop "products that will give the company a revenue stream from consumer-related products," the spokesman said.
Bankers Trust in recent years has run up big profits from trading securities and commodities for its own account and for large corporate customers.
But bank executives have complained that the stock market does not value the company's true profitability because of trading-related risk factors.
Branch System Divested
The New York company all but abandoned retail banking in 1978 when it decided to sell its large branch system.
Its remaining major retail link is the private banking and investment management operation within ProfitCo, which has about $20 billion in assets under management.
Mr. Lawson will work directly with Neal Finnegan, H. Kent Atkins, and Peter Lengyel, the three executives who oversee private banking, investment management, and employee benefits.
"He's coming with a very open charter," said Alan Zakon, a managing director in ProfitCo. Mr. Zakon joined Bankers Trust as an outside consultant two years ago before taking a fulltime post this year to develop retail initiatives for the private bank.
Mutual Fund Venture?
Outside sources speculated that Bankers Trust drafted Mr. Lawson to buy or create mutual funds to sell to other purveyors - giving the bank access to retail customers without the need for a distribution system.
"They are still in a fairly exploratory mode in terms of the whole retail issue," said Judah Kraushaar, an analyst at Merrill Lynch & Co.
A well-placed internal source who sought anonymity said the bank sees "potential . . . to generate some initiatives in the retail market."
Though it will not build branches, he and others implied, it is trying to develop a middleman's role in developing or servicing products used by other banks, brokerage houses, and insurance companies.
Speculation on Bankers Trust
Rumors about Bankers Trust's reemergence into retail have surfaced intermittently over the years. Although usually denied by bank officials, the reports have included assertions that Bankers Trust would buy other New York banks with big retail networks.
Speculation about the company's diversification plans was rekindled when the state of Delaware last month licensed two Bankers Trust units to underwrite life, health, and property and casualty insurance.
Mr. Parisi, the company spokesman, said the insurance units are unrelated to the bank's renewed interest in retail products.
Despite its new moves, some observers doubt that Bankers Trust has the expertise to tailor itself to individual consumers.
Its strength is in developing sophisticated financial products, such as equity derivatives and off-exchange options.
Doubts About Strategy
Though Mr. Zakon has worked to adapt some of these products for wealthy individuals served by the private bank, success is far from guaranteed.
"I understand strategically why that makes sense," said a former employee who asked not to be named, but "I'm skeptical."
Mr. Lipper, for his part, agreed with some conventional wisdom about Bankers Trust: Whether in trading or retail, the innovative company is veering far from its original commercial banking charter.
"I think Bankers is trying to become more and more of a financial services organization and less and less of a bank," Mr. Lipper said.