Crossland picks GNA to run brokerage operations.

Crossland Federal Savings Bank has finalized plans to transfer its mutual fund and annuity sales program to an outside investment products marketing company.

The New York thrift said it has selected GNA Corp., a Seattlebased unit of GE Capital, to manage brokerage operations that it previously managed itself. GNA will take the reins in November.

The move marks one of the first times that a large financial institution has opted to turn over a flourishing investment products program to an outsider.

Bigger banks generally prefer to operate retail investment programs themselves, feeling they can retain greater control and receive potentially higher returns.

But officials at Crossland, which has $4.5 billion in assets, say tighter scrutiny from banking and securities regulators in general prompted the decision.

Although the sales program is not troubled, Crossland prefers to place it at arm's length, said Paul LaRosa, Crossland's chief administrative officer.

Also, by operating the program through GNA's brokerage, Crossland avoids responsibility for arbitration claims and awards that may result from future sales.

"At this point in time, this is the way we prefer to go," Mr. LaRosa said.

The arrangement to outsource the program also will reduce the thrift's expenses, fitting in with plans to slim down in anticipation of a possible sale. Crossland's chief executive, Richard A. Kraemer, has said in published reports that he believes Crossland, which operates 38 branches in New York, is an attractive buyout candidate.

GNA and Crossland have begun reviewing the thrift's range of investment products, and changes are already in the works.

Crossland will drop its other annuity companies in favor of exclusively offering GNA's line, Mr. LaRosa said. The thrift has not yet decided ff GNA's own mutual funds will be brought on board, he added.

Crossland already sells GE's mutual funds under an agreement reached earlier this year.

Crossland's accord with GNA gives both parties the right to sever ties after a year, providing notice is given.

Under the arrangement, Crossland's 12 brokers will become employees of GNA's brokerage arm.

Some sales representatives have left since Crossland first began discussions with GNA, but Mr. LaRosa attributes the departures to "natural turnover," not opposition to the switch.

GNA would like to increase the broker ranks to 25 representatives, said Laurence "Buzz" Richmond, a GNA vice president for new business development.

GNA will place its own people on site to supervise the program and help the transition.

GNA and the Crossland management also are holding meetings with sales representatives and the thrift's employees to discuss the new working relationship.

"I'm very confident the relationship between Crossland and GNA will be a positive one," Mr. Richmond said.

Crossland has not yet disclosed whether Joseph Dolock, who has run the in-house program for the last few years, will be asked to stay on in some capacity.

"We're still making personnel decisions," Mr. LaRosa said.

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