Seeking to form closer ties and leverage existing relationships with bank intermediaries, Fidelity Investors Institutional Services Corp. is turning its attention to creating new fund products and investment services specifically for the bank channel.

Among the bank-specific products on the Boston mutual fund giant’s drawing board are several variable annuities that banks can customize, said Gary Cohen, senior vice president and national sales manager. These annuities would include both Fidelity-managed and bank-managed funds.

In addition, Fidelity is developing a personal portfolio program that will be available to high-net-worth clients of banks and independent advisers, Mr. Cohen said.

The effort’s goal is to tap the pool of newly affluent customers as well as a large potential base of annuity-buyers, a market niche in which many financial companies are vying for shelf space. Bank-geared variable annuities are an increasingly important product line not just at Fidelity but across the fund industry.

Bank advisers are getting better at selling products, though slowly, Mr. Cohen said. Banks have traditionally built their investment businesses on internal referrals, but this strategy is no longer sufficient to retain investors, he said. So many bank brokers and advisers, for the first time, have started to get more aggressive about pursuing business outside their banks, he said.

Banks are also overcoming traditional divisions in their sales forces and are learning how to collaborate better, he said.

“We’re seeing a migration of these units toward more cooperation,” he said.

Intermediary selling will continue to be shaped in 2001 by several trends that have emerged in recent years, Mr. Cohen said. Among these are a growing desire by people for investment advice, the need for fund companies to offer value-added services to advisers and brokers, and the increasing sophistication of a handful of banks in selling investment products, he said.

“All trends point to growth in intermediaries in distribution channels,” Mr. Cohen said.

Letting banks put their own fund portfolios into an annuity is one way to give bank advisers an additional incentive to sell them.

“In order to get the assets into your funds, you have to create these things,” said Robert Ash, president and chief executive officer of Fleet Investment Advisers, a division of FleetBoston Financial Corp, whose company has four such products.

Such products are not entirely new, but their profile should be raised if a company with a brand identity as strong as Fidelity’s starts building them, Mr. Ash said.

Fidelity, however, is not the only company seeking to do this: Several variable annuity providers and at least one other major fund company, Putnam Investments, already permit customization of their bank-sold variable annuities via a bank’s own mutual funds. This is something Putnam’s management has found banks want because it enables them to improve annuity sales and get something more out of the sale.

Still, not all bankers like such products. Multimanaged annuities are often not very good deals for clients because of their relatively high expenses, said Curt Anderson, president of the investments division at First Busey Bank in Urbana, Ill.

Each company with a fund in the annuity takes a cut, which can substantially reduce an investor’s returns, Mr. Anderson said. “There’s a lot of fingers in the pie,” he said.

By increasing its line of financial products for banks, however, Fidelity is seeking to more closely intertwine its products with those of the bank intermediaries, Mr. Cohen said. In 2000, ABN Amro Holding NV, Northern Trust Corp., BB&T Corp., Union Planters, and FleetBoston were among the banking companies that added Fidelity’s mutual funds to their preferred lists.

Nationwide Financial is the underwriter of the Fidelity-labeled variable annuity the company currently sells, and it probably will underwrite the annuity products currently under consideration, a Fidelity spokesman said.

On the mutual fund side, Fidelity issued three bank-oriented funds this year for its Advisor fund family, and more are planned for 2001, Mr. Cohen said.

Advisor is Fidelity’s fund family for intermediary sales, and Mr. Cohen is in charge of distribution for all intermediary channels.

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