How 2 Bank Execs Fanned Flames of Fund Marketing

when it comes to marketing skill. But there are exceptions to every rule. And the exceptions invariably end up as conference speakers. At last week's mutual fund conference sponsored by the Bank Securities Association, two ambitious bank mutual fund executives gave blow-by-blow accounts of how they are building programs at their banks. Marco Hanig, management director of First Chicago Corp.'s fund complex, described how he won the commitment of senior management to double the size of the bank's proprietary fund program. And Deborah G. Patterson, a senior vice president at Bank of Hawaii, explained how she has been selling its proprietary funds through nonbank channels, including regional brokerages and financial planners. For Mr. Hanig, who oversees the Prairie Funds, a 17-fund complex with $3 billion in assets, the key marketing challenge was convincing First Chicago's top brass that the mutual fund business was worth spending resources on. After all, two years ago, the bank's fund family had little brand recognition and a limited line of mutual funds. Mr. Hanig labored long last year to put together an elaborate 100-page report describing the mutual fund marketplace and First Chicago's potential in it. He said senior management "got interested when it was all translated to the bottom line." His five-year plan calls for generating yearly pre-tax profits in excess of $100 million. Mr. Hanig said his bank is on its way to achieving that goal, though he refused to disclose the operation's profitability. He did say that fund sales this year would exceed $400 million. Ms. Patterson told a small audience of bankers about her month-old effort to sell shares of Bank of Hawaii's Pacific Capital Funds family through nonbank channels. She said her bank wants to generate about half its retail sales from nonbank channels. If banks want to be successful in penetrating nonbank distribution channels, they need to serve a niche in the marketplace, Ms. Patterson said. Her bank's niche product is the Hawaiian Tax-Free Trust fund, the first state tax-exempt fund to be offered in Hawaii. She said First Hawaii has signed agreements to sell its fund through a national brokerage and one regional firm, though she wouldn't disclose their names.