A month after showing a third-party marketing firm the door, the Independent Bankers Association of America has inked a pact with a fierce competitor.
IBAA Financial Services Corp., the trade group's broker dealer, announced Thursday that First Institutional Marketing Inc., Houston, would provide its members with fixed annuities, training, and telephone support.
In late August IBAA Financial Services pulled the same contract from Fimark, of Woodland Hills, Calif. What was to have been a two-year relationship ended after 14 months.
The IBAA's selection of First Institutional Marketing gives the third- party marketer a valuable endorsement and the opportunity to reap lots of business from the 5,500 members of the trade group.
More than 300 banks have expressed interest in offering fixed annuities through the IBAA.
First Institutional Marketing and Fimark have long competed to serve the same banks, and some of their products overlap. First Institutional Marketing is smaller than Fimark: It sold $217 million of annuities last year, compared with $457 million for Fimark, according to Kenneth Kehrer Associates, Princeton, N.J.
The biggest third-party marketer, Essex Corp., of New York, sold $2.8 billion of annuities last year.
Asked why First Institutional Marketing was selected to replace Fimark, IBAA Financial Services president Bill Reid said: "The overriding factor was their service record with banks."
Kenneth Kehrer, the head of Kenneth Kehrer Associates, said First Institutional Marketing is known for its telephone service.
"FIMI has a highly developed telephone wholesaling structure, so it's relatively efficient about being able to call reps and give reps sales ideas over the phone rather than having to send people into the field," he said. "That's particularly important when you're dealing with a lot of small banks dispersed geographically."
First Institutional Marketing provides bank insurance agency development, training, and product support services.
It provides a full range of annuity and insurance products to more than 150 banks.
The IBAA also endorses Massachusetts Financial Services' mutual funds, variable annuities, and retirement plans, and Quick & Reilly, which offers discount brokerage.
More than 100 banks offer investment products through IBAA-endorsed companies.
In addition to annuities, First Institutional Marketing sold $26 million of mutual funds and $5 million of stocks and bonds last year.