may well leave with a mutual fund or vice versa. The Akron, Ohio, banking company is known as an aggressive cross-seller, and that sales drive is apparent in the mutual fund division.
"We want to align ourselves with the bank's strategy," said Felice Larmer, chairwoman of FirstMerit's brokerage business, First Merit Investment Services "Cross-selling is what they emphasize at the consumer bank and we follow that lead."
To that end, brokers will often make a mutual fund sale and then try to see what the customer's other needs are. Customers are typically asked whether they need home loans, consumer loans, or small business loans. Likewise, branch employees are encouraged to direct potential investors to the investment side.
On the brokerage side, no territory is sacred. Brokers even talk to customers about their wills.
A client lacking a will Ms. Larmer said there were many -- will be steered to a personal trust officer who can make the arrangements.
"We want them to cross-sell and look at the bigger picture," Ms. Larmer said.
The brokers themselves -- 26 covering 170 branches -- offer a full array of mutual funds, including the products of OppenheimerFunds, Dreyfus Corp., and Massachusetts Financial Services. The brokerage unit took in $6.5 million of commissions last year and is aiming at $7 million this year.
Brokers are part a "multi-disciplined team" of employees on which First Merit relies to bring in customers and keep them coming back, said John R. Cochran, FirstMerit's chairman and chief executive.
"We've been very careful about building expertise" among the bank's employees, Mr. Cochran said.
Bank employees tell customers about opportunities, but do not push products on them, he said.
"The brokers are trained to interact very tightly with various bankers in the branch," Mr. Cochran said.
It does not hurt that bank employees receive incentives for forwarding ideas to the brokerage unit and other parts of the bank. The commissions are on top of the employee's salary and range from 10% to 50% of base pay.
Observers say the bank's cross-selling sales approach is on the mark.
FirstMerit "has been active in building fee revenues," said Kenneth Puglisi, a banking analyst with Sandler O'Neil & Partners, New York.
"They have much more of a sales culture than other banks and they're carrying this over to mutual funds," Mr. Puglisi said.
FirstMerit has two of its own funds -- a money market fund with $170 million of assets and an equities fund with $70 million -- but brokers do not push them. "It's difficult to get them to sell it because there is no family of funds they can trade into," Ms. Larmer said.
But brokers do market themselves to colleagues in the bank, trying to develop ties that will result in more investment sales.
"You know, 'Out of sight, out of mind?' We try never to be out of sight," said Marc Vosen, senior vice president of the brokerage unit. "One advantage of being a small institution is that regional feel. You can go into a branch and roll up your sleeves and talk to people."
Mr. Vosen oversees workshops that brokers hold with staff members of the $9.2 billion-asset banking company's 10 divisions.
The brokers talk about mutual funds and annuities and why they are necessary for a well-rounded financial portfolio.
At the same time, brokers receive training in FirstMerit products that they can suggest to their own customers. They are especially busy when the bank is running promotions for various products.
For instance, the bank is currently promoting home equity loans. Brokers run down a list of questions to determine if there may be a need. The information is forwarded to the home equity group, which then makes the contact.
Some seminars focus on making the branch employee more of a salesperson. They are taught to look for opportunities to talk to customers about their financial situation, and try to set up a meeting with one of the brokers.
For instance, a branch representative may try to determine a customer's insurance needs. Reps have a list of questions they can ask, like, "Do you own your own home or do you rent," Mr. Vosen said.
That information is then forwarded to a broker, depending on the territory, for follow-up.
FirstMerit wants branch employees "to act more like brokerage reps," Ms. Larmer said. "We want to see them going after these people in a sales environment."
The classes teach branch staff how to make overtures to customers and how to forward to brokers any product ideas that may come up. Both branch employees and brokers are told that 80% of their business is likely to come from the top 20% of their customers, so they should focus on that group.
The training appears to be working. Last year, the brokerage unit received 3,650 referrals from bank employees, with half resulting in a product sale, Ms. Larmer said.
Ms. Larmer is pleased with the results in a geographic territory that includes a number of large banks as competitors.
"Here we are in the heart of banking country and we have a valuable franchise and a tremendous market," Ms. Larmer said.
Ms. Larmer joined First Merit in July 1996. Before that, she was an executive with the insurance and financial planning group of KeyCorp., one of First Merit's big competitors in the region.
"We expect 25% of our overall product sales to come in through referrals from another part of the bank," Ms. Larmer said.
First Merit strives to be anything but hard-handed in its selling drive. The brokerage unit had a slow but steady start.
"They haven't rushed out a bunch of products and said, here we are," said Timothy Willi, a banking analyst with A.G. Edwards & Sons.
"They've used a disciplined approach," Mr. Willi noted. "They took the time to really understand the products before they rolled out the program."
