Barnett Banks Inc. is overhauling its approach to marketing investment products by creating a salaried sales force to serve mutual fund customers exclusively.

The Jacksonville, Fla.-based banking company has been using brokers working on commission to sell mutual funds plus a raft of other investments.

Under the new arrangement, a 100-person sales force will be confined to selling individual stocks, bonds, and Treasury instruments. A separate group of 105 sales representatives will offer a range of mutual funds, including Barnett's Emerald Funds.

Both sets of employees will be licensed by Barnett's brokerage subsidiary, Barnett Securities.

Barnett's shift to a salaried mutual fund sales force comes at a time of extraordinary scrutiny for bank brokerages. Regulators have voiced concern that commission-hungry brokers are pushing bank customers into inappropriate investments. By placing its mutual fund representatives on salaries, Barnett hopes to defuse such criticism.

Jonathan J. Palmer, the banking company's chief retail banking and technology executive, said customers themselves had asked for a separate mutual fund sales force. Some said they were overwhelmed by the variety of investments placed in front of them by brokers, he said.

The revised structure "meets our objectives, our customers' objectives, and is consistent with the direction regulatory bodies would like us to move in," Mr. Palmer said. Mutual funds representatives will be eligible for bonuses, but these will be based on customer satisfaction and suitability, as well as sales volume, he said.

Industry analysts agreed that the change will likely go over well. "This seems like it will be right up regulators' alley," said Dennis Dolego, a partner with Financial Research Corp., Chicago. "You know the salesperson isn't interested in transactions for his own gain."

But, Mr. Dolego added, Barnett may have trouble attracting effective representatives who will be satisfied with a salary, because such compensation is generally lower than commission income.

Barnett began piloting the new sales structure in nine branches late last year. The company will expand the program this winter to cover 620 branches in Florida and Georgia.

The bank is staffing the sales effort with both existing and new employees. Roughly 60 representatives are transferring into the new unit from an annuity program that James Mitchell & Co. operates for the bank, leaving that program with 30 employees.

The mutual fund representatives will serve as the first stop for customers who ask tellers and customer service representatives about alternative investments.

Bank officials say they believe mutual funds will be the right fit for a lot of these customers. But if appropriate, the mutual fund representatives will refer them to other parts of the bank - such as trust, brokerage, or even the insured deposit desk.

Mr. Palmer said Barnett managers will gauge how well the fund representatives are doing by calling customers about their investment product purchases. As another safeguard, two bank officers will review each trade.

Mr. Palmer said so far things are going well among the different sales teams, including the brokers who lost a good chunk of their product list. "There has been no rebellion" among the brokers, he said.

But some brokers may have to rethink the way they operate. "If they were depending on leads, then they will probably have to find a new way to generate business," Mr. Palmer said.

The bank is promoting the mutual fund program internally with sessions for tellers, customer service representatives, and other employees.

"We've spent a lot of time and money to have us all understand what we're doing is best for the customer," Mr. Palmer said.

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