Citicorp is introducing an up-front sales charge for its family of in-house Landmark mutual funds.

This "load" isn't unusual in the mutual fund industry, but it signals a switch for the nation's biggest banking company. Citicorp has been offering its proprietary Landmark funds through branch offices since 1987 without a sales charge.

Encouraging Sales People

The switch, according to a source familiar with the bank's mutual fund activities, is meant to encourage "investment counselors" to promote the Landmark funds more aggressively. The load will be passed along to the sales force through higher commissions.

Citibank has put a heavy marketing emphasis on the wide variety of investment products it offers through its branches and stand-alone Citicorp investment offices.

But executives are not happy about the benign neglect given to Landmark products, sources said.

Bond Funds Are the First

Citicorp officials did not return calls for comment on the new policy. But a customer-service representative said loads were introduced in mid-May on the two Landmark bond funds -- a government income fund and a New York tax-free fund. Sales fees will be introduced in mid-June on the Landmark equity and balanced funds, he added.

The load on the equity and balanced funds will be 5%, he said; the maximum fee on a tax-free municipal fund, 4%. Fees are being waived for one year for consumers already invested in the funds.

Citibank had $2.8 billion under management in its eight Landmark funds (including four money-market funds) at the end of the first quarter. It ranked ninth among all bank fund managers, according to Lipper Analytical Services.

$8 Billion Goal for Landmark

Leslie Bains, who formerly ran the investment division in Citibank's private bank, said last year that the bank aimed to have $8 billion of Landmark funds under management by 1995.

Citibank is not the first bank to convert to a load. Chase Manhattan Corp. last year introduced a 4.5% up-front load on its Vista stock and bond funds, which are sold through in-branch sales representatives as well as by outside broker-dealers.

The load was meant to make Vista "more attractive to broker-dealers," said Kenneth Mills, a Chase spokesman.

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