First Union Corp. is abandoning an innovative attempt to combine its personal trust and brokerage sales forces.
The move, confirmed by spokeswoman Marianna Sheridan, highlights the difficulty banks have in smoothing out differences between trust and brokerage specialists.
"I don't think sales were as high as expected," Ms. Sheridan said. "We thought we could do better under the new system."
In 1992, First Union, Charlotte, N.C., became what experts believe is the only major banking company in the country to have the same set of investment experts sell its personal trust and brokerage services.
At the time, the company combined its force of 80 full-service brokers and 40 trust officers into a single force of so-called personal investment counselors that sold both sets of services.
Ms. Sheridan said the hope was that having one contact for investment sales would "create less confusion" among customers, and boost sales.
Since then, First Union has grown its force of personal investment counselors to 200. The company also is halfway through its planned addition of 2,400 lower echelon investment specialists who are trained to sell only annuities and mutual funds.
Kenneth R. Hoffman, president of bank investment consultant Optima Group Inc., Milford, Conn., said other banks had made some efforts to get their retail brokerage and personal trust sales forces to work together. But none, to his knowledge, had gone as far as First Union, and actually had the same people selling both types of services.
Banks have tried to build better cooperation between trust officers and brokers because the two sets of investment specialists are notorious for competing with each other for the same clients.
But, Glen Casey, a consultant with Cerulli Associates Inc., Boston, said banking companies have believed that the two types of products are sufficiently different that they require dedicated expertise.
Personal trust professionals primarily focus on estate planning, and the management of investment pools for tax and inheritance purposes. Brokers tend to be more transaction-oriented - selling investments to collect a commission.
Ms. Sheridan said one of the biggest problems First Union encountered was that trust services have much longer sales cycles than other investments products. As a result, brokers were pushing the quicker investment sales, and trust sales were lagging.
The banking company said it hopes that by hiring 75 dedicated personal trust specialists by January, personal trust sales will pick up, Ms. Sheridan added.
First Union's decision to abandon its combined sales force was first reported in a regional edition of the Wall Street Journal on Wednesday, Nov. 16.
Separately, Ms. Sheridan acknowledged that the former director of First Union's retail brokerage, Lamar Polston, had left the company in September to work for Fidelity Investments as a relationship manger for the 15 largest banks that sell its mutual funds.
Ms. Sheridan would not say if his departure was in any way related to the reorganization. she added that the banking company believes he got a better position at Fidelity, and that he continues to have a strong relationship with First Union.
Ms. Sheridan also said that even though First Union's investment product and trust sales had dropped earlier in the year because of poor markets, sales in the last four months have "come back stronger than ever." One reason for the increase has been the hiring of more investment specialists in the branches, she said.