Jack Stack is sitting on a gold mine.

The executive vice president of Chase Manhattan Corp. has an enviably large pool of potential customers for investment products: the bank's 2.4 million customers in the New York metropolitan area.

So far, however, only 5% of them invest with Chase-a situation Mr. Stack intends to change.

"It's important to us that investments are a fully integrated part of the business, as opposed to an island unto itself and an independent business," said Mr. Stack.

To that end, Mr. Stack last month created Chase Investment Services Group to house the bank's previously far-flung brokerage businesses. By bringing together Chase's affluent markets group, its broker-dealer, its branch brokerage, and its retirement investment divisions, Mr. Stack formed an 800-employee unit on track to generate revenue between $200 million and $300 million in 1997.

More importantly, the move brought Chase's 250 brokers closer to relationship managers in the bank's retail banking, small-business, and middle-market divisions. The idea is to offer investments alongside the other products and services that Chase sells.

Mr. Stack and Gregory A. Rotella, 48, recently named president of Chase Investment Services Group, say they expect its earnings, revenues, and assets under management to increase about 20% annually.

Growth of that magnitude is an aggressive goal for any of those three aspects individually, said Joy Montgomery, a consultant at Money Marketing Initiatives, Morristown, N.J. Achieving 20% growth in all three is particularly difficult, she said.

But Mr. Stack, 50, an affable man who is quick with a smile, is undeterred. He and Mr. Rotella say $336 billion-asset Chase has all the pieces needed to compete in the investments business.

"We have tremendous scale, tremendous brand, and tremendous information about our customers," said Mr. Rotella, a 29-year Chase veteran. "The key is: How do we use those things to integrate investments with the relationships we have?"

Many commercial bankers who sell investments are grappling with the same issue: Their relationship managers are often unwilling to turn over their customers to brokers. They fear losing control of their relationships, or losing the customer altogether due to shoddy service from investment salespeople.

To solve the referral problem, Chase now attributes investment sales revenue to the division that originated the customer relationship, Mr. Rotella said. His experience as the executive responsible for the commercial middle market and the upper end of the small-business market in the Northeast also helps him get the respect and support of those groups.

That's something that an executive hired from the brokerage industry might not be able to command, Mr. Stack said.

"To try to parachute in somebody with an investment background who didn't understand the inner workings of banks we thought would create tensions that would be disadvantageous to moving business forward," Mr. Stack said.

While Mr. Rotella rallies support for the investments business from Chase's other divisions, Mr. Stack has the ear of the bank's top management. A veteran of Chemical Banking Corp., Mr. Stack reports to Michael Hegerty, a Chase vice chairman in charge of New York, New Jersey, and Connecticut.

Businesses under Mr. Stack's purview include all nonbranch distribution channels, investments, insurance, call centers, telephone-based relationship banking, and affluent markets.

Mr. Rotella's and Mr. Stack's strategy for eliminating turf wars is sound, said Ms. Montgomery. "They have to get a piece of the action to give them incentive," she said.

But, she warned, the bank must be able to track investment sales and the group's progress separately, so upper-management knows how much business the investment group is generating.

Another obstacle for banks in the investments business is their sometimes limited product menus. Though banks have earned their customers' trust, their offerings are sparse when compared to those of nimble brokerage firms-like Charles Schwab & Co., and Merrill Lynch & Co., for example.

Chase is already a full-service brokerage and employs both Series 6 and Series 7 salespeople. But the bank is considering adding many new products to its arsenal.

The bank will combine internal growth and acquisitions of firms or products to fill in its product gaps, Mr. Stack said. Indeed, industry investment bankers said that Chase seriously considered buying Scudder, Stevens & Clark, a mutual fund company that German insurer Zurich Group agreed to buy last month.

This fall, the bank's on-line banking product will begin providing access to Chase's proprietary fund family, the Vista Funds. Other possible new products include a no-fee mutual fund supermarket and a line of proprietary mutual funds that could be offered direct to customers without a sales load.

The bank also plans to introduce more mutual fund products for the 401(K) retirement market.

"The opportunity for growth is staggering as you look at baby boomers like me who need to save for retirement," Mr. Stack said.

And Chase is gearing up to launch a cash management account product to consumers, after the lead of Merrill Lynch, and more recently, First Union Corp. These accounts provide a consolidated statement of all of a customer's transactions, and a sweep of cash balances into a money market fund at the end of each day.

Chase's version, dubbed the Investment Management Account, is being tested on a limited basis, and will be widely available in the fall, Mr. Stack said. Even though customers seem to like these accounts, merely offering one does not guarantee more business, said one analyst.

"If you have a preexisting customer, if the only change is using a CMA (cash management account), I don't know if it adds anything to the relationship," said Diane B. Glossman, a banking analyst at Salomon Brothers. Customers are likely to buy more products or add deposits when they receive good service, which some customers get from cash management accounts, Ms. Glossman said.

Mr. Stack acknowledges Chase's investment products business is still being built. But he said the bank is fully committed to the business.

"It is ludicrous to think that you could land in the land of Oz, the land of investments, and compete immediately with the Merrill Lynches of the world who have been at it for a much longer period of time," Mr. Stack said.

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