A California thrift is claiming success with an unusual and controversial approach to selling investments -- getting all of its platform sales representatives to sell them.

The plan, adopted a little more than a year ago, is meant to reinvigorate the $3.8 billion-asset Fidelity Federal Bank. which has gone through the wringer of late.

Perilously thin capital ratios caused by problem real estate loans forced the Glendale-based thrift to do a complicated restructuring and recapitalization this year to avoid regulatory sanctions.

That job completed, Fidelity is now trying to reinvent itself as a thrift in which investment sales are as tightly integrated into traditional banking as the regulators will allow.

To that end, the thrift is wrapping up plans to license all 225 of its platform sales representatives to sell investments in its 33 southern California branches. These employees also sell a line-up of traditional bank products, such as checking and savings accounts.

So far, Fidelity has gotten all of its platform reps licensed to sell insurance in California. In addition, a little less than two-thirds have gotten either Series 6 licenses, that allow them to sell mutual funds, or Series 7 licenses, that let them sell a broader range of securities.

All the platform sales reps should be licensed to sell securities or mutual funds by yearend, thrift officials said.

Fidelity president Richard M. Greenwood sees clear advantages in the approach.

"The single platform, for our needs, is the only way to go," he said.

Mr. Greenwood explained that, with this approach, platform sales reps can be more efficient, and the thrift better immunized from the market's vagaries.

For example, when mutual fund sales are hot, platform reps can busy themselves with sales of these products. When CDs get hot, they can shift back to deposits.

The approach can also save the thrift money, since platform reps don't have to be paid as much in sales commissions as dedicated brokers do.

So far, officials of the thrift say, their strategy has paid off. Investment product sales have jumped to $13 million for the year through August, from $3 million in the same period last year.

This is a notable achievement, given that most of the brokerage industry has had a tough year due to anemic performance in stock and bond markets.

"If I had a divided sales force, I'd be laying people off, but we haven't had to," said James Stutz, an executive vice president who oversees retail financial services. "What's the investment of choice right now? The CD. And all of our people can offer that."

But despite Fidelity's claim of success, has it adopted what will ultimately turn out to be a smart strategy?

Certainly, its approach differs from that of most banking companies.

According to consultant Cerulli Associates Inc., Boston, in 1993 only 3% of the bankaffiliated broker dealers were staffed with platform reps, down from 5% in 1992.

Normally, banks use dedicated specialists to sell investments.

The most notable exception is North Carolina's First Union Corp., which is building a sales force of two Series 6 certified platform employees per branch to sell both insured bank products and investments.

Kenneth R. Hoffman, president of the Optima Group, a consulting firm in Milford, Conn., said the approach Fidelity has taken was thought to be "leading edge" a few years ago.

But he added that the few banks which have tried it have not been successful.

"It's all good intentioned, but it doesn't work," he said. "You simply don't have the [sales] volumes you would have if you had referrals to specialized representatives."

And regulatory questions could arise. Currently, Fidelity is in compliance with banking guidelines that ask banks and thrifts to sell investments from areas that are separate from the rest of the branch.

Regulators want banks to use separate areas to minimize investor confusion between insured deposits and investments.

At Fidelity, these sales are done in areas clearly labelled with the Gateway Investments name of its broker-dealer affiliate.

But a spokesman for the Office of Thrift Supervision said the issue of thrift employees' selling both insured and uninsured products is under review. When asked whether the agency has concern that this practice could be misleading, he declined to elaborate.

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