First Union Corp., in a far-reaching sales push, will license 800 employees to sell annuities to branch customers.

Executives at the Charlotte, N.C., banking company said the sales group will support First Union's drive to become one of the first banking companies to market its own fixed- and variable-rate versions of the popular investment products.

First Union will have 400 staffers licensed by yearend, and 400 more ready by the end of 1996, said David de Gorter, director of First Union Insurance Group.

The employees are among the 1,700 staffers that First Union has already licensed to sell mutual funds. These employees, together with the bank company's 220 brokers, create one of the industry's biggest investment product sales forces, industry analysts said.

The sweeping approach is in line with First Union's strategy of having a broad array of investment products readily available, Mr. de Gorter said.

"We want to be a full-service financial provider," he said. "If you're missing annuities, you're missing a piece of what customers want."

First Union will have to closely monitor its sales groups to ensure that the annuity program is effective, said Kenneth Kehrer, president of Kehrer Associates, Princeton, N.J.

Banks can produce more sales through a combination of brokers and bank employees, as long as the two groups don't spar over customers, Mr. Kehrer said. "It's a hotly debated issue within banks."

Mr. de Gorter said he is confident that the tandem sales teams will outproduce the single brokerage force that sold $115 million of fixed and variable annuities last year.

All told, banks sold $18.4 billion of fixed and variable annuities last year, up from $13.5 billion in 1994, according to Mr. Kehrer.

People planning for retirement are most often attracted to annuities, whose returns are exempt from taxation until they are tapped. The products' returns can be fixed, or set at a stable rate, or variable, when linked to an underlying pool of mutual funds.

First Union's employee sales effort will cover 728 branches along the East Coast. The banking company has also contracted with Essex Corp., an outside marketing firm, to deploy annuity sales representatives in 552 branches in Florida.

First Union went with an outside firm for the Florida effort because the state's insurance department sharply restricts annuity sales by bank employees.

Mr. de Gorter said he is confident the Florida selling effort, which began this year with 18 salespeople, will not rub the state's insurance department the wrong way. The program is completely managed by Essex, Mr. de Gorter said.

Another program in Florida, managed by James Mitchell & Co. in Barnett Banks Inc., has battled for years with the insurance department in part because of a link to the Jacksonville bank's trust department.

While the sales team is getting up to speed, First Union is working with Western National Life Insurance Co. to create a proprietary fixed annuity. The arrangement will allow First Union to manage the annuities' investments and earn spread income that usually goes to the insurance company. First Union will also receive a share of commissions from product sales.

Western National will supply insurance contracts for the annuity and also set guidelines for types of investments that First Union can make on behalf of the annuities.

First Union also plans to come out this fall with proprietary annuities linked to six of the bank company's Evergreen funds.

The product rollouts will allow First Union to join a handful of other banks, including Fleet Financial Group, that offer their own fixed and variable annuities. Officials at the banking companies say the arrangements allow their institutions to wring as much fee income as possible from their investment product programs.

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