Too many banks enter the business of selling investment products with false assumptions. Following is a list of some of the most widely held myths that continue to retard bank investments programs. For each myth, I supply some suggestions for new ways to think about these issues.

Myth 1: There is one homogeneous target market for investment products and services. Too many banks market their investment products and services the same way to all customers, when in fact their customers are far more diverse than they realize.

While some banks are now starting to fully exploit the information in their customer records, very little of this information has filtered down to help make intelligent marketing decisions for investment products.

Customer needs are a function of many different things, including income, life cycle, and specific events, such as the birth of a child or the death of a spouse. Marketing, to be cost effective, must target the appropriate product to the appropriate customer.

Myth 2: It's not necessary to employ highly skilled and experienced people to be sales reps for investment products. The common wisdom here has been that a skilled and educated sales force was at best unnecessary and at worst could be dangerous.

Since the products sold are relatively simple - predominantly mutual funds and annuities - and the clients are mostly unsophisticated, why pay the high levels of compensation necessary to attract and retain top salespeople? And since much of the business resulted from internally generated referrals, the salespeople really didn't deserve high compensation.

The truth here is that clients, products, technology, and marketing are becoming more complex. To believe that anything less than the best possible sales force will do is naive.

Myth 3: Mutual funds and annuities are the only investment products that should be sold by banks, given the makeup of bank customers. While it's clear that mutual funds and annuities are an important component of banks' investment product offerings, to limit sales to just these two product areas is a major mistake.

First, this kind of limitation will automatically preclude building relationships with the top quartile of the prospects within the market. High-net-worth individuals, business owners, professionals, and executives may buy some mutual funds and annuities. But they are equally interested in retirement planning, new stock issues, municipal bonds, and other products.

And since these people are centers of influence in the community, your ability to woo them to your program will have a geometric impact.

Myth 4: The No. 1 priority for a bank investment program is to gather assets for a proprietary mutual fund complex and the trust department.

This is a product-centered approach rather than a need-centered approach. The problem with product-centered approaches is that they assume "one size fits all." As is the case with Myth 1 above, customers are diverse.

Trust services and proprietary products have a place in the product portfolio, but investor suitability should be the driving force, not profitability.

Myth 5. Only the very large bank investment product programs make money. Absolute size has little to do with profitability. The keys to making money with an investments program are employing top-quality salespeople, following an intelligent marketing plan, and controlling costs.

In fact, on a per-employee basis, the investment program can be the most profitable business for a bank.

Now that we've dispelled some of the myths, we can focus on the things that need to be done to ensure success in the years to ahead.

First and foremost is the absolute need to upgrade the people selling investments and investment program management. A higher-caliber sales force accomplishes many things:

*Net revenues will increase, even with higher compensation.

*More professional and experienced reps will allow for an expanded product lines and allow the customer base to expand into the upper quartile of people in the community.

*Finally, the bank will be better positioned to compete against all the players in the financial services marketplace.

Mr. Werlin is president of Human Capital Resources, a St. Petersburg, Fla., recruitment firm that services bank brokerages.

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