How do you pull ahead of the pack, especially when the competition has a running head start?

Barnett Banks Inc. thinks it has the answer: offering its mutual funds without sales fees and giving customers free financial planning.

"You have to have the right value equation for the customer," said Richard H. Jones, Barnett's chief asset management executive. "No matter how much they like you, if you don't have the right product, priced correctly, they aren't going to buy it."

Florida's largest banking company will try a strategy that most banks have shunned - offering its proprietary Emerald Funds on a no-load basis - in an effort to tap the wave of wealth pouring into the Sunshine State.

But Barnett, like many other banks in the state, may be stepping into the race too late. The banking company faces stiff competition from many of Florida's long-established brokerage firms, such as Merrill Lynch & Co., which has 61 offices in the state, only nine fewer than in California.

Mr. Jones, in an interview this month, said he is determined to swipe investment customers from his competitors by offering more affordable investment products and financial advice.

"I don't see First Union or NationsBank as competitors," he said. "I see the wire houses like Merrill Lynch as the real power players here."

He added that "asset accumulation is our goal and we're structuring ourselves to fit the clients we target."

The cornerstone of Mr. Jones' strategy is Barnett's $3.9 billion-asset Emerald Funds, which by April 1 will scrap their sales charges - a bold move aimed at building up assets quickly. The bank expects the strategy will help fund assets grow by at least 15% in 1996.

Barnett is focusing its sales efforts on three areas: a private client group that caters to the wealthy, a financial consultants group for retail customers, and an institutional asset group aimed at attracting corporate assets.

In March, Barnett will roll out a pilot program in Volusia County to equip its brokers with laptop computers and asset allocation software. If the program succeeds, Mr. Jones said, it will be introduced statewide to Barnett's 260 full-time brokers and 300 licensed platform employees.

The banking company has also begun upgrading its sales force. By early next year, all Barnett investment representatives will have Series 7 licenses that allow them to sell a broad range of investment products, including mutual funds, stocks, and bonds.

But the company has had to fill some glaring omissions in its product line. A marketing campaign to attract rollover assets from individual retirement accounts into Barnett investment and deposit accounts will begin this spring.

"When people talk about the billions of dollars that will pass from one generation to the other, they're talking about it happening here - this is the place," Mr. Jones said, referring to Florida.

But for all Mr. Jones' efforts to boost Barnett's standing as a premier purveyor of investment advice and products, some competitors are saying it may not be enough.

"Florida is inundated with brokerage firms," said Samuel Gentry, a senior vice president of Miami-based Capital Bank. "We've got them on every corner."

More than 450 brokerage firms operate offices in Florida, according to the securities division of the Florida Department of Banking and Finance. The state has the third-greatest number of registered brokers, after California and New York, according to the National Association of Securities Dealers. And by all accounts the competition is fierce.

"We take in Barnett accounts every day," said a Miami-based Smith Barney Shearson broker, who asked that her name not used.

She added that Barnett has a strong reputation for lending to small businesses and homebuyers but that, when it comes to investment expertise, "people would just pass them by. Their effort is really too little, too late; they should stick to what they know."

Kennedy G. Thompson, president of First Union Bank of Florida, said Florida banks have been aggressive in courting investment customers, "there's no doubt about it."

Room remains for banks to make headway against nonbank brokerage firms, he added, especially by leveraging their branch systems. "There is a large retiree population that still likes to go to their local branch," he said.

Mr. Thompson's sentiments are echoed by Mr. Jones. Barnett's black- granite-and-glass headquarters cuts an imposing figure on the Jacksonville skyline. And Mr. Jones would like to cast that shadow over the company's competitors.

"There's no reason we can't beat them at their own game," he said, "especially when it comes to our own customers. Our brokers need to be smart and get out there."

This week, Barnett will ask the Securities and Exchange Commission for a go-ahead to form a new subsidiary to manage the Emerald Funds, plus all the bank's personal and institutional trust assets. Once launched, the unit would have $11 billion to $12 billion of assets under management, Mr. Jones estimated.

The move is intended to streamline Barnett's investment management operations, he said, and to help the company gain endorsements from money management consultants, who prefer more centralized structures. He would not discuss whether any jobs would be cut as a result.

The hope is that the new subsidiary will attract better talent, he said, and the company will be hiring some new portfolio managers by the end of April, though he wasn't specific.

Two new Emerald Funds will also join the lineup by that time. Mr. Jones said the banking company will launch a value stock fund and an international stock fund; both will be managed by outside firms.

Sources close to Barnett said Invesco Capital Management and Wellington Management Co. are contenders to manage the value fund and Morgan Stanley & Co. and Brandes Investment Partners are being considered to manage the international fund.

Mr. Jones, described by some former colleagues as a "no-load evangelist," got his start in the mutual fund business in 1984, working for no-load giant Fidelity Investments. He was chief administrative officer of Fidelity Management Trust Co. and later ran all shareholder servicing for the fund company.

In 1991, Mr. Jones jumped to Fleet Financial Group, where he launched the highly regarded no-load Galaxy Funds. He left the banking company last July as it prepared to merge with Shawmut National Corp., whose Michael J. Rothmeier, an advocate of sales loads, eventually came to run the bank's mutual funds. Last November, Fleet imposed sales fees on its Galaxy Funds.

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