Taking aim at the booming market for retirement products, Barnett Banks Inc. has hired an executive to direct sales and marketing of defined contribution plans to middle-market companies.
Jeffrey J. Wirth has filled a newly created position at the Jacksonville, Fla.-based bank - director of business and institutional asset management. He comes to Barnett from Fleet Investment Services in Hartford, Conn., where he was senior vice president responsible for retirement products.
At Barnett, Mr. Wirth will hawk the bank's 401(k) and other defined contribution and benefit plans to businesses, institutions, and municipalities with 50 or more employees. He plans to market so-called "daily-value" products through Barnett's business banking and commercial lending relationships in Florida.
Daily-value plans allow participants to access up-to-the-minute account balances every day.
"This business line has not been fully leveraged," Mr. Wirth said.
He said he intends to double his sales staff to 14 by yearend and raise that number to 18 by the end of 1997.
Mr. Wirth said 401(k) plans are the fastest-growing part of the retirement-plan market.
But banks may have difficulty competing with nonbanks in this area, observers said. Accounting becomes difficult when participant record keeping and individual mutual funds are involved.
It is hard for banks to offer a fully bundled product, said Geoff Bobroff, president of Bobroff Consulting, East Greenwich, R.I. "It's a record-keeping nightmare from a business perspective."
Barnett officials, however, are hoping that their bank will not face this problem. It has outsourced the accounting of its daily-value product to Bysis Group, Little Falls, N.J.
According to Access Research, based in Windsor, Conn., only 24% of companies with 50 to 100 employees offer defined contribution and defined benefits plans. Among companies with 100 to 500 employees, that number goes up to 52%.
Only 80% of companies with 1,000 to 5,000 employees have such plans.
"In the under-1,000 (employee) market, anyone has a chance," Mr. Bobroff said. "Clearly, having a local presence has to help."
Mr. Wirth reports to another Fleet alumnus, Richard Jones, Barnett's chief asset management executive, who joined Barnett last August.