When it comes to snaring business from first-time investors, banks are managing to hold their own with brokerage firms and other rivals, a study shows.

The study, by financial researcher Phoenix-Hecht, showed that about 20% of all newcomers to mutual funds buy their funds through banks.

Another 18% make their purchases at full-service brokerage firms, and 22% invest directly at fund companies.

By contrast, seasoned investors are much more likely to pick brokerages over banks, the study found.

Seeking Familiarity

Novice investors are drawn to banks partly because of familiarity with the institutions, said Larry Cohen, a vice president at Phoenix-Hecht, which is based Research Triangle, N.C.

Also, novice fund buyers may see banks as good sources of advice, he said.

The investors "are inexperienced with all but basic savings and investment vehicles," said Mr. Cohen.

Fewer than half the first-time investors surveyed seriously considered more than one company before investing.

Where Banks Lag Behind

They also relied more heavily on marketing materials from the mutual fund companies they select than on publications and other independent sources.

Meanwhile, banks are clearly lagging behind rivals in attracting more seasoned investors, the survey found.

Excluding first-time investors, about 38% of recent fund buyers made their purchases through full-service brokerages. versus just 8% for banks.

Other Sources

Some 22% bought directly from mutual fund companies, the survey found.

Other sources of mutual fund sales noted were membership groups or associations and insurance companies.

Interviewers drew their data from 1,000 people who own stock or bond mutual funds and who had purchased a mutual fund within the last two years.

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