Liberty Financial Cos., a leading partner of banks that sell mutual funds and annuities, has tightened its grip on the business by acquiring a firm that provides brokerage services to banks.

The purchase of Independent Financial Marketing Group, White Plains, N.Y., is expected to double Liberty's list of banking clients to about 198. Among them are KeyCorp and Citicorp, which rely on Independent for help in running slices of their investment sales businesses.

The deal, announced Tuesday, is the latest sign of the consolidation wave sweeping companies that provide investment services to banks.

These niche players, once considered essential partners, have been fighting to hang onto contracts as banks have learned the ropes of investment sales. Many are selling out, while others are broadening their menus of offerings.

Boston-based Liberty has been in the vanguard of the latter trend. In the past year, it has bought Colonial Group, a mutual fund company; Newport Pacific Management, a money management firm; and Wall Street Investor Services, an investment marketing firm.

"If there was any doubt that Liberty was going to be a serious player in bank distribution, this acquisition erases it," said Richard Ayotte, president, American Brokerage Consultants, St. Petersburg, Fla.

Terms of the deal for Independent were not disclosed, but such companies typically sell for twice net revenue. In Independent's case, one source said that indicated a price of at least $25 million, but others disputed that, saying a dearth of new business has drained value from so-called third-party marketers.

Even though many marketing firms are struggling, Liberty officials said they are convinced that the brokerage business at banks is a sound bet.

"Banks have been the fastest-growing distribution channel of our core products - mutual funds and annuities," said Porter Pierpont Morgan, acting president of Liberty Financial Bank Group, the company's bank investment sales arm. "We expect that trend to continue."

He said banks now account for 20% of Liberty's sales of proprietary mutual funds and annuities, and could command a 30% share in a few years. In addition to mutual funds managed by Colonial and Liberty, the bank group sells annuities underwritten by its Keyport Life Insurance Co. affiliate.

Under the deal, Liberty's bank group will take on Independent's name. Denis Kaplan, Independent's chairman, will manage the operation, and Mr. Morgan, who took over Liberty's bank group a year ago, will resume his former duties as senior marketing officer for the parent company.

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