Bank platform staff members are improving at selling investment products, while dedicated brokers are struggling to return to earlier productivity levels, a survey shows.

In the first quarter the average licensed platform employee generated $950 a month of gross commissions for the bank by selling annuities, mutual funds, and other investment products, according to a study of 16 banks by Kenneth Kehrer Associates, Princeton, N.J.

That was 58% more than in the fourth quarter and 34% more than in the first quarter of 1997, according to the study, which was done for the Bank Securities Association.

The first-quarter improvement from the fourth quarter partly reflects a downturn in the earlier period. The stock market correction in October and poor interest rate conditions for fixed annuities hurt bank sales of investment products.

But the rise is also "another piece of evidence that platform sales can be a valuable addition to banks' distribution networks," said Kenneth Kehrer, principal of the consulting firm.

The productivity gains are attributable to branch reps' gaining experience, Mr. Kehrer said-and to the weaker ones among them leaving their banks.

"After two years of selling, the average sales production improves dramatically," Mr. Kehrer said. "That's in part because the losers drop out."

There was an influx of branch salespeople about two years ago, when such banking companies as First Union Corp. of Charlotte, N.C., Dime Community Bancorp in New York, and Glendale (Calif.) Federal Bank collectively licensed hundreds if not thousands of platform employees to sell investment products.

Executives at Glendale Federal, a unit of Golden State Bancorp, are so pleased with the performance of their 150 licensed platform reps that they plan to license 300 more reps within nine months, said Rob Amdahl, chief operating officer of Glenfed Brokerage Services, the thrift's brokerage arm.

Complementing a smaller force of dedicated reps with a platform force lets customers buy investment products at more locations, since there are more branches than dedicated reps.

And the platform approach is a more cost-effective way to sell relatively noncomplicated packaged products, Mr. Amdahl said.

"It solves a couple of problems over the dedicated program," he said.

But Mr. Amdahl added that the thrift remains committed to a hybrid approach, with higher-end business pushed to the 60 dedicated reps.

Ed Hipp, president and chief executive of Centura Bancorp of Charlotte, N.C., said a platform sales staff makes good strategic sense, because not every customer needs the expertise of a registered representative.

Though the licensed platform staff members can sell packaged products like mutual funds and annuities, they must refer customers who want to make larger and more complicated investments to their bank's dedicated brokers. Centura's platform reps are not allowed to handle investments of more than $35,000.

"Our platform folks are like the general practitioners," Mr. Hipp said. "They diagnose your ailment, and they treat the simple ones."

Centura's licesned platform sales force averaged $2,357 a month in gross commissions in the first quarter, Mr. Hipp said, while its dedicated reps averaged almost $30,000.

Meanwhile, specialist brokers at the banks surveyed by Kehrer Associates generated average monthly commissions of $21,554 during the first quarter, up from $20,638 in the fourth quarter of 1997 but below the year-earlier figure of $22,709.

The problem may boil down to how much banks are willing to pay to hire and keep effective brokers, Mr. Kehrer said.

"The question is, have banks been recruiting top people?" he said. "If they haven't, maybe bank brokers have maxed out. Maybe this is as good as it gets."

Wire houses, which pay brokers more, get more sales out of them. While the average bank broker pulls in $217,000 a year in gross commissions, the $200,000 mark is the floor for wire-house brokers who intend to keep their jobs, Mr. Kehrer said.

The bank retail brokerages participating in the Kehrer study increased their investment-product revenue during the first quarter to an annualized $2,071 per $1 million of retail bank deposits, up 8% from the previous quarter and virtually equal to the year-earlier period.

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