Several mutual fund companies are encouraging bank brokers to play up future tax code changes in their marketing pitches.

One such firm is Van Kampen American Capital of Oakbrook Terrace, Ill., which generates a third of its fund sales volume through banks.

Van Kampen has devised a tax reform reference guide, detailing six of the most likely proposals to turn into law, and how they affect particular investments, according to R. Scott West, Van Kampen's director of financial institutions.

Chicago-based John Nuveen & Co., which sells only tax-free bond funds, is also encouraging brokers to use future tax reform as a topic when they talk to investors in seminar settings or at their offices.

Fund companies, like all sellers, are always on the lookout for issues such as tax reform to serve as marketing hooks for their products.

But several bank brokerage chiefs and financial planners argue that future tax reform is an improper issue to base investment advice on. They argue that no particularly bill is currently barrelling through Congress and add that any effort to predict the future shape of legislation is imperfect at best.

"To recommend funds based on possible tax reforms is extremely risky," said James Overholt, president of the brokerage unit at Bank South Corp.

One independent investment adviser agreed.

"To make significant changes in a financial plan in anticipation of an unknown tax package is dumb," said Harold Evensky, a financial planner in Coral Gables, Fla.

Many of the current proposals in the Senate and the House of Representatives encourage saving and investing, a theme that has mutual fund sales executives salivating.

For instance, some legislation proposes loosening tax laws on individual retirement accounts, a move that would encourage greater investing.

Van Kampen suggests that brokers tell clients: "Tax reform may be the single greatest investment opportunity of your lifetime. Consider acting before the issues are fully resolved."

The firm also recommends different broker pitches for funds ranging from municipal bond to junk bond.

For stock investors, Van Kampen argues that "during the debates over transition rules and provisions, equity diversification is key."

Mr. West acknowledges the firm is "open to criticism" for encouraging brokers to make investment recommendations based on possible tax reform. But he says the firm is not suggesting specific investments, only strategies, such as being fully invested and diversified.

"The recommendation action steps are not something anyone would have a problem with," Mr. West said.

Nuveen is helping banks identify customers who have recently purchased tax-free bonds or bond funds. It has also establish ways for the bank to contact them.

Sales at banks were flat over 1994, as a prolonged bullish stock market overshadowed bond fund investments, said Jerome Contro, vice president for Nuveen's national bank division.

"The challenge of '96 is to create demand for tax-exempt products at banks," he said.

Other fund sales executives question tax reform as a theme that will help brokers attain more clients. "I'm sure it's getting people in the door," said Stephen Burke, vice president of bank services, Dreyfus Corp. "I don't know if there's enough answers to help people though."

Massachusetts Financial Services has already designed marketing materials explaining where mutual funds fit in with the Republican Party's "American Dream IRA" proposal.

That proposal would make the earnings an investor withdraws from an IRA free of taxes.

But MFS is waiting to see if the proposal turns into law before mailing out brochures, according to Lisa Jones, director of financial institutions sales and marketing.

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