Invest Financial Corp. is prodding its bank-based sales representatives to use the company's asset allocation software and is hawking the product to other banks as well.
The Tampa-based company, one of the nation's largest investment products marketers, has 65% of its 1,300 sales representatives using its Lifetime Planning Toolkit asset allocation software and plans to have the rest using it by early next year.
The company is also talking with several banks which are not Invest customers but are interested in licensing the software.
Asset allocation programs have gown in popularity over the past year as regulators have put pressure on bank brokers to make certain they are suggesting suitable investments to consumers.
The programs are "very popular among bank officers," said Edward P. Mooney Jr. product manager for SEI Corp., Wayne, Pa. "I definitely think it's the wave of the future, if for no other reason than the compliance aspect."
The asset allocation software produces suggestions of how to distribute money into several different investment or deposit products, depending on an investor's objectives and tolerance for risk.
Once a computer model is made, a customer is shown precisely how much money is needed to reach that goal and where the money will be placed.
The software has been a hit with bank officers, who have seen some investment assets drip back into bank deposits because of the program, said Lynn M. Smelt, senior vice president and director of financial services at Invest
James W. Phillips, a vice president and Invest broker at West One Bank, Salt Lake City, said his asset allocation software has proscribed bank certificates of deposit for his conservative clientele.
Mary MacAvity, a consultant with Cerulli Associates Inc., Boston, said the programs are a boon for investment marketers, such as Invest.
In the past, banks often looked at such firms as competitors who were convincing customers to withdraw money from the banks and invest elsewhere.
"If they [marketers] can help a bank retain assets, then it's a goodthing," Ms. MacAvity said.