Mutual fund companies and brokerages are beating banks to the punch in marketing the Roth individual retirement account and other new IRAs, experts say.

And that could prove costly for banks.

While brokerage firms and mutual fund companies have taken the offensive with a barrage of newspaper, television, and radio ads, banks have been conspicuously low-key. Some major banks do not even offer the new IRAs yet.

"This should be a hot topic for banks," said Michael Adler, president of Bisys Research Services Inc. in Calabasas, Calif., which recently surveyed banks across the nation about the new IRAs. "A lot of the banks are taking a wait-and-see approach to see what their competition does."

There are exceptions. Some community banks started advertising in local papers months ago. Citicorp is running full-page ads in The Wall Street Journal and other newspapers, and is working on radio commercials. And KeyCorp plans to advertise the IRAs on television broadcasts of the Olympics.

But by and large, banks have remained on the sidelines. Of 72 major banks, thrifts, and credit unions that Bisys polled in January, only 65% offered FDIC-insured Roth IRAs.

Roth IRAs, named for the Delaware senator who invented them, are being touted as the most attractive kind of IRA because of their tax structure. With taxes levied at the time of contribution rather than disbursement, as with traditional IRAs, the Roths allow for more compounding.

With that feature they could dominate IRA investments, experts say.

Spectrem Group, a research firm in San Francisco, estimates that investors will pour $39 billion this year into Roth and so-called education IRAs, both created last year by Congress, and traditional IRAs, for which the income limits were raised.

That is more than double the amount invested in IRAs in 1997, and it does not include traditional IRA money that will be rolled into Roth accounts.

Fidelity Investments, the nation's biggest mutual fund company, estimates the basis of income and age that 145 million people are eligible for the Roth product alone. Indeed, Boston-based Fidelity is making the product the focus of its advertising blitz in print and radio ads.

At T. Rowe Price, the Baltimore-based mutual fund company, television ads for educational software have elicited 50,000 orders, and newspaper ads touting an IRA newsletter have prompted 100,000 potential new customers to request copies.

Many banks acknowledge the product's potential. But few plan to tout the IRAs as hard as their mutual fund and brokerage competitors.

"I believe Roth is a great opportunity for individuals and for financial institutions," said Ed Hipp, president and chief executive of Centura Securities, the brokerage arm of Centura Bancorp in Charlotte, N.C. "You'd have to be brain-dead if you contribute to an IRA not to use it."

Still, Centura Bancorp plans to market the new IRAs to its existing customers rather than pursue an ad campaign that might not be worth the expense, Mr. Hipp said.

"We have an enormous opportunity to attract assets from our customer base without going out and burning $100 bills in the public square to attract people who don't do business with us," he said.

Because IRAs are complicated, banks can attract investors by offering to explain their options. They can then gain deposits into IRA certificates of deposit, sell the investment products that underlie the IRAs, and manage the underlying mutual funds.

"Whether banks capture it or somebody else does, there's an opportunity here," said Joy Montgomery, president of Money Marketing Initiatives, a consulting firm in Morristown, N.J. "People need help."

Indeed, part of the battle among banks and their competition will be to attract investors with traditional IRAs elsewhere to convert to Roths with a new institution.

"The real play is to get someone to convert their outside IRAs to your Roth," said Kenneth Kehrer, a consultant in Princeton, N.J.

To do that, banks should be getting out the word that they have the advice and products for those who want to "Rothify," he said. "Banks have always been very aggressive IRA marketers. I'm surprised we haven't seen a major effort by banks yet."

Harold Evensky, a partner with Evensky, Brown, Katz & Levitt, a Coral Gables, Fla., financial planning firm, said he was amazed at banks' lack of urgency.

"These people should be losing sleep over this," said Mr. Evensky, whose firm, along with other financial advice outfits, stands to cash in on demand for IRA advice.

Much of the bank advertising so far has been done by smaller institutions. DomesticBank in Providence, R.I., Citizens Federal in Dayton, Ohio, and Great Lakes National Bank in Battle Creek, Mich., placed ads in local newspapers as far back as October touting a 10% teaser rate for investing in the new IRAs.

"Banks have not been as fast to come out with the product as some of the brokerage houses and mutual fund companies have," said Bisys' Mr. Adler.

KeyCorp, in Cleveland, has the product and plans to roll out ads in regional newspapers this month as part of a retirement ad campaign that will include spots during Olympic broadcasts, said Gary Gregg, product manager in the bank's retirement services area.

Mr. Gregg acknowledged that fund companies and brokerage firms have a head start in advertising, but he predicted that KeyCorp will not lose out.

"While they got out a little sooner than we did, customers need a little time to raise money, and they need time to figure out what they want to do," he said. "We feel very comfortable that we are among the leaders in banking in terms of attacking the opportunity."

Like many banks, KeyCorp has also mailed information on Roth IRAs to its customers, and relationship managers have been working the phones to promote the product.

Centura, meanwhile, is using direct mail, statement stuffers and ATM receipts to target bank customers, including 30,000 who have "dormant" IRA accounts with the bank that can be rolled into Roth accounts.

Amy J. Perez, a vice president in Chase Manhattan Corp.'s product development area, said Chase is using a similar strategy, leaving the advertising to others.

The Roth ads taken out by others are good for the bank because they generate "general consumer interest," Ms. Perez said. "Many (IRA) customers are ours already, and they'll ask about these products."

But Mr. Adler of Bisys warned that banks are in for a rude awakening if they do not court customers more aggressively.

"People are going to convert to this kind of account," he said. "And whoever does the most advertising is going to win."

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