Banks Doing More Hand-Holding To Soothe Investment Customers

Bank brokerage executives are rushing to calm investors jolted by the roller-coaster stock market.

In the weeks leading up to Monday's 512-point rout, bank brokerages fired off cautionary letters to customers. Since then they have been keeping brokers informed through daily conference calls and prodding brokers to phone investors to discuss their worries and financial plans.

Executives say that stepping up communication during times of market turbulence is a natural extension of good business practices.

"The best investment professionals are the ones that keep going back to their clients," said Jack L. Kopnisky, president of Key Investments Inc., the brokerage division of KeyCorp, Cleveland. "If we're doing our job, it shouldn't be a problem."

In the days before Monday's market drop, when stock prices were already gyrating, Fleet Financial Group sent letters to its Galaxy Funds shareholders urging them not to make rash decisions, said Robert L. Ash, a managing director.

"The key is to manage investors not during the volatility, but before the volatility," Mr. Ash said.

Last week Unionbancal Corp.'s brokerage arm began looking for help from its top fund vendors to quell investor fears, said Richard Smiley, president and chief executive officer of UBOC Investment Services, San Francisco.

Fidelity Investments approached UBOC suggesting an investor forum, Mr. Smiley said. These sessions, where the fund managers could meet investors and answer their questions, could start later this month, he said.

The brokerage arm of Unionbancal, which is mostly owned by Bank of Tokyo-Mitsubishi Ltd., is asking its other fund partners-among them OppenheimerFunds and Massachusetts Financial Services-to come through with similar programs.

At KeyCorp Investments, brokerage chief Jack Kopnisky said his brokers are calling clients and recommending a reallocation of assets where necessary. For example, clients with a heavy weighting in technology stocks might be encouraged to consider changing the their asset mix, he said.

Key Investments has also been highlighting risk and volatility in its monthly statements to about 200,000 customers, even though such disclosures have been part of the statements for years, Mr. Kopnisky said.

All of the bank brokerages contacted said they have been holding daily conference calls with brokers-more often than during less choppy markets. Mr. Kopnisky said that for three or four months KeyCorp's continuing education program for brokers has stressed helping investors weather volatility.

Mr. Ash of Fleet said this makes good sense, because many brokers and even portfolio managers have never been through a market downturn.

"Often times the investment advisers are more sensitive to the market than the investors," Mr. Ash said.

Some banks are using advertising campaigns to reinforce their strengths- and perhaps reach new investors in the process.

A ad published Wednesday in The Wall Street Journal by First Union Corp.'s Evergreen Funds group emphasized Evergreen's track record in past downturns-and took a poke at the relative youth and inexperience of most of its rival fund managers.

Evergreen's portfolio managers have industry experience averaging 19 years, compared with an industry average of 3.5 years, according to the company. Its founder, Stephen Lieber, has been managing investments since 1951.

"In 1973 we were riding out a bear market," said the ad for $52 billion- asset Evergreen Funds. "What was your fund manager riding?" An accompanying photo shows a child on a Big Wheel tricycle.

The advertisement is part of a campaign that has been running in the news media since January. However, the company did make a special effort to get the ad in the paper after Monday's drop in the Dow Jones industrial average.

"That was a very conscious decision on our part," Ms. Papazian said.

Fleet already had a performance ad scheduled to run Tuesday in The New York Times for the $13 billion Galaxy Fund family, Mr. Ash said. The Boston bank has also been running a big advertising campaign for its fund complex in recent months.

"We are fortunate that the theme we've chosen all the time is that this is a long-term investment," said Betsy Richardson, senior vice president and director of corporate marketing at Fleet. "We knew the ad was going to run Tuesday, and we were comfortable."

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