Fleet Financial Group plans to focus this year on selling its $18 billion Galaxy Funds through third parties.
But the Boston banking company does not plan to following the typical wholesaling route, said Robert L. Ash, a managing director with Fleet Investment Management. Instead of simply "standing on line" behind the thousands of mutual funds looking for a niche in the nation's brokerages, Fleet will try to forge mutually beneficial alliances, Mr. Ash said.
Ideally, the company will court a variety of financial services companies.
Fleet is in discussions with several companies-including the insurers Equitable of Iowa and SunAmerica in Los Angeles - about possible alliances, Mr. Ash said.
"Some of them will be regional (brokerages), some of them will be banks, some of them will be insurance companies," he said. The one thing the companies will have in common is "a product that we can sell," he added.
Currently, Fleet distributes less than 80 third-party mutual funds. That number would increase as Fleet forges distribution relationships, Mr. Ash said.
Fleet already sells the Galaxy Funds through its discount brokerage subsidiary Quick & Reilly, which boasts a 300-broker sales force.
But selling through Quick & Reilly is not a slam dunk for Fleet, said Linda Goodwin, a senior vice president and director of marketing for Fleet Investment Management.
"We have to compete like we would on any regional or national brokerage," Ms. Goodwin said. Most of Quick & Reilly's business is conducted in individual stocks with only a "small percentage" in mutual funds, she said. However, the brokerage is looking to sell more funds, she added.
Last year's focus on internal sales of the Galaxy Funds, along with sales of mutual funds to non-Fleet customers in the company's territory, helped propel total sales to $840 million, Fleet said. That was an 85% increase over 1997, Mr. Ash said.
Fleet is continuing its push for internal sales growth by increasing the number of brokers with series 6 licenses in bank branches. About 600 Fleet bank employees are licensed to sell mutual funds. Mr. Ash said he would like to have 800 platform brokers by yearend.
Fleet will also continue the advertising campaign it launched in 1998 for the Galaxy family, part of which focused on the need to save for retirement.
Ms. Goodwin attributes the company's low fund redemption rate-20% below the industry average-to a heavy concentration of fund sales into individual retirement accounts. IRAs accounted for 70% of overall sales last year, she said.