Seeking to beef up its presence with bank brokerages, Federated Investors has snared a top salesman from a rival mutual fund company.
The Pittsburgh-based company has hired Craig Howard, the former head of the bank division at Colonial Group, Boston, to oversee its sales efforts to banks in the West. Mr. Howard's hiring is the latest in a string of moves Federated has made in an effort to increase its presence on the retail side at banks.
Federated is the nation's ninth largest fund company with $78.7 billion in assets under management. While it has a dominant presence in trust departments, it is less-known among retail bank brokers.
"We're not getting the market share we should relative to our position in the (mutual fund) industry," said Mr. Howard's new boss, Tony Fadool, who is senior vice president in charge of sales through banks. Federated sold $2 billion through banks last year, ranking it ninth out of the dozen or so companies that have penetrated the bank marketplace, Mr. Fadool said.
Now, Mr. Fadool said, he wants Federated bank sales to jump to $9 billion over the next three years. Mr. Howard, who began work at Federated on May 1, is sure to be instrumental to the success of that plan.
Mr. Howard, a vice president, will manage some of Federated's most prominent banking relationships, including those with Norwest Corp., First Bank System Inc., and KeyCorp. He will also seek to establish relationships with banks west of Nebraska.
The hiring of Mr. Howard also puts Federated in the running to snare one of the biggest bank clients in the country. He had BankAmerica Corp. as a customer during his stint at Colonial, and spent seven years with the San Francisco giant's brokerage unit before joining the Boston firm in 1994.
For the past year, Federated has been trying to get its name out to retail brokers. In 1995, it spent $2 million to advertise in broker and financial planning trade periodicals for the first time.
To improve sales by banks, the company hopes to double its sales force within a year, Mr. Fadool said. Federated currently employs 19 people who hawk its wares to banks.
Mr. Howard said the company's expansion plans helped convince him to make the move. "Federated is willing to make more of a commitment financially to grow this business," Mr. Howard said.
He added that at Colonial, he more than tripled monthly sales to banks.
Colonial has begun a search to replace Mr. Howard.