Invest Financial Corp., a leading partner of banks in the mutual funds business, is undergoing its second big staff shakeup in a year.

The company has just made a round of high-level staff cuts, leaving its national sales manager and five regional managers out in the cold.

Industry observers speculated that Invest is slimming down at the urging of its parent, Kemper Corp. of Long Grove, Ill., which recently agreed to be acquired by Conseco Inc., Carmel, Ind. But officials at Kemper and Invest said no such directive had been issued.

The Tampa, Fla., company, which helps about 175 banks market mutual funds and annuities to their customers, went through another management overhaul last December, when D. Mark Olson abruptly resigned as president.

Mr. Olson's successor, Merlin R. Gackle, described the latest dismissals as a "realignment." He said the employees were cut because the company had developed too many layers of management that impeded contact with sales representatives in the field.

"We've flattened out the management level to get closer to the bank rep," Mr. Gackle said in an interview.

Among those dismissed last week were Joel R. Kesner, national sales manager and director of financial services, and Ellen McCorckle, a senior vice president and director of operations.

Mr. Kesner had been elevated to Invest's top sales post earlier this year when Mr. Gackle, who previously held the position, was promoted to president.

Before that, Mr. Kesner had overseen the company's annuity sales effort.

Five regional sales managers of insurance were also let go, among them David Nitsch, Gary House and Jack Cranney.

Reached by telephone at his home, Mr. Kesner said the firings came as a surprise to him.

"I thought we were headed in the right direction," he said.

And though rough market conditions have slowed sales of most investment products, Mr. Kesner said the cuts were not connected to volume.

"It wasn't because of production," said Mr. Kesner. "Our annuity business was up tremendously."

Mr. Gackle said the changes were not done with cost-cutting in mind, but added that with any streamlining effort, "you always try to do things cost effectively."

Industry observers suggested Invest was cleaning house in anticipation of the planned acquisition of Kemper by Conseco.

Observers said the downsizing at Invest could pave the way for a merger with Conseco's investment products marketing unit, Bankmark, of Morris Plains, N.J.

"If Invest is being structured to fit with Bankmark, then this kind of move may make sense," said Kenneth Kehrer, head of Kehrer Associates, a Princeton, N.J., consulting firm.

But executives at Invest and Conseco moved quickly to dispel the talk. "We are not making adjustments here, nor are they making adjustments there because of us being owned by Conseco and them owned by Kemper," said Robert C. Leonard, president of Bankmark.

Spokesmen for Kemper and Invest also denied the two events were connected, with Mr. Gackle saying the decision to cut staff was his.

"None of these plans were taken with consideration of the planned merger with Conseco, Kemper or any of the companies involved," Mr. Gackle said. "There was no directive from Kemper."

More 'Hands-On' Support

Invest let its bank clients know about the changes in a letter last week.

In the letter, Mr. Cackle said the staff shuffling would provide "more direct, 'hands on' support to each representative" and said that regional sales managers now would be responsible for maximizing sales productivity.

In addition, the letter named Tracy Manier and Douglas Dorn new senior vice presidents and divisional sales managers. Sylvia Sillier also was promoted to senior vice president and director of managed programs.

No mention of the firings was made in the letter.

Bankers' reaction to the cutbacks was subdued, with some saying it should not have much impact on their relationship with Invest.

"My initial thought is that we've-always received strong support from Invest," said Ken Nelson, executive vice president at Bremer Financial Corp., St. Paul. "We feel that will continue."

John MacMillan, president of Glacier Bank, an Invest client in Kalispell, Mont., also expressed confidence in Mr. Gackle, "a Montana boy," and his staff.

But. Mr. MacMillan added, "We'll follow up with them, to see exactly what is happening."

Invest and Bankmark are two of the country's largest sellers of mutual funds and annuities through banks.

In 1993, Bankmark alone sold $780 million of annuities and $184 million mutual funds, while Invest sold $490 million of annuities and $1.5 billion of mutual funds last year.

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