KeyCorp has hired a former First Interstate Bancorp executive to head its sales effort in institutional trust.
Donald Stone joins the Cleveland-based banking company as national sales manager for institutional asset services. He had been vice president for institutional trust at First Interstate Bank in San Diego.
At KeyCorp, Mr. Stone will oversee a staff of 57 responsible for selling 401(k) plans, pension products, securities lending services, and other institutional trust products.
He replaces Jamie Bailey, a KeyCorp senior vice president the $64.5 billion-asset company has assigned to develop institutional service products.
During a recent telephone interview, Mr. Stone said expanding sales of Keycorp's Prism 401(k) plan - to both large and small companies - is a top priority. The bank already has nearly $6 billion in 401(k) assets.
"We'd like to go head-to-head with Merrill Lynch and Fidelity because we think our product looks very competitive," Mr. Stone said.
Even among Fortune 500 companies, he explained, there's enough dissatisfaction with current providers to give KeyCorp a chance to win new business.
But that may be easier said than done. Account turnover at mutual fund companies is low - a factor that tends to work against banks rather than help them, one consultant said.
"Most of turnover ... has actually been from banks and insurance companies to the leading mutual fund players like Fidelity, Vanguard, and Merrill Lynch," said Ronald L. Bush, vice president at Access Research, South Windsor, Conn.
In his effort to snare large accounts, Ms. Stone is counting on features and service rather than price to lift KeyCorp's 401(k) product above the crowd.
For instance, KeyCorp offers to customize statements -including personalized messages to individual participants. That represents an appealing distinction, Mr. Stone said.
Large plans, in particular, are grappling with how to increase participation rates and improve allocations of invested assets, he explained. And messages and advice targeted to plan participants are a part of the solution KeyCorp is pitching.
"General education is not producing the results that plan sponsors would like to see," Mr. Stone said.