The Independent Bankers Association of America has ended its relationship with the third-party marketer it tapped last year to sell fixed annuities to its member banks.
Fimark, based in Woodland Hills, Calif., was selected in June 1996 by the IBAA in what was to be a two-year arrangement.
Bill Reid, president of IBAA Financial Services Corp., the trade group's broker-dealer, confirmed that his group pulled the endorsement early last month.
He declined to say why. However, a person familiar with the situation said that Fimark had failed to provide adequate service.
The IBAA started searching for a replacement for Fimark a month ago. It has narrowed the list of candidates to two and plans to announce its choice within days, said Mr. Reid.
The IBAA gives certain businesses its stamp of approval to work with its 5,500 members, which can open up lucrative opportunities for the company being endorsed.
But in return the small-bank trade group expects the company to provide high levels of service. If they do not, the IBAA has the right to terminate the arrangement.
All companies endorsed by the IBAA are expected to provide quality products, help with compliance issues, and provide service including training and marketing support, said Mr. Reid.
Frederick Stoutland Jr., Fimark president and chief executive officer, did not return calls.
Mr. Stoutland had said he planned to sign up 100 banks this year, but his company has managed to forge relationships with just 28. Mr. Reid declined to name any of the banks.
About 330 banks are interested in signing up with a fixed annuity provider, said Mr. Reid.
Fimark ranks 12th among third-party marketers selling annuities and mutual funds. But its sales of $457 million in fixed and variable annuities last year lagged far behind the sales of the market leader, Essex Corp., New York.
Essex sold $2.8 billion of annuities last year, according to Kenneth Kehrer Associates, Princeton, N.J.
In addition, Essex sold $324 million in mutual funds. Fimark does not sell mutual funds.
The other companies that the IBAA endorses are Massachusetts Financial Services, which sells mutual funds, variable annuities, and retirement plans, and U.S. Clearing Corp., a unit of Quick & Reilly, which offers discount brokerage.
More than 100 banks offer investment products through IBAA-endorsed companies.