BUFFALO -- With a branch network that spans a region where the Erie Canal once ruled, Manufacturers & Traders Bank can claim to know a thing or two about blue-collar attitudes.

Blue-collar workers have been among this bank's core clients. They've used the institution, the lead bank of $10.3 billion-asset First Empire State Corp., to pack away hard-earned cash in savings and checking accounts.

But when it came to selling investments, a service historically aimed at the affluent and the upper crust, M&T was somewhat cautious.

Officials of the Buffalo-based bank knew they had to get into the retail brokerage business, as more and more people of modest means began playing the markets.

"I could literally see people walking out of my bank lobby with a check in hand and crossing the street to buy their annuities or mutual funds," said James A. Gately, president of the bank's M&T Securities brokerage affiliate.

When M&T finally began selling brokerage services through its branch network four years ago, it tapped an outside firm -- Liberty Financial Services -- to handle the sales.

But having gotten its feet wet, M&T now feels more confident. So next month, the bank will start dismantling its relationship with Boston-based Liberty and bringing the retail brokerage operations in-house.

The transfer of 55 brokers from Liberty's payroll to M&T's is to be completed by May.

Mr. Gately, the architect of the change, said the move was "very timely."

"We've said right from the beginning that we've wanted to do this on our own," Mr. Gately said during a recent interview in his office in downtown Buffalo. "We've got the economies of scale to do this now, and to wait would be a waste of opportunity."

In this way, M&T is like many other banks. Institutions including NationsBank Corp., Charlotte, N.C.; San Francisco-based BankAmerica Corp.; and New York-based Chemical Banking Corp. have all decided in recent years to abandon investment sales partnerships and strike out on their own.

But M&T's decision will end what was said to be a fruitful relationship.

M&T was one of the first and biggest banks to use Liberty for brokerage sales, said Liberty president Porter P. Morgan. Since then, serving banks has become a big business for the company.

"Certainly, there's a bit of nostalgia in letting them go," Mr. Morgan said.

When M&T first got into the brokerage business, its effort was relatively small, with only 10 brokers serving its customers. The effort expanded steadily, but now M&T has plans to do much more, Mr. Gately said.

Specifically, by the end of next year, M&T plans to have trained and licensed 400 employees to sell investments in the bank's 140 branches. These socalled "platform specialists" will be required to pass Series 6 licensing tests that allow them to sell mutual funds, annuities, and variable life insurance.

For sales of other investment products, the platform specialists will refer leads to the full-service brokers who are licensed to sell a broader range of products, such as individual securities and unit investment trusts.

M&T has also begun looking for a partner to help it sell life and disability insurance as a full-service insurance broker. A selection is anticipated within six weeks.

"Any bank getting into insurance today is really pioneering," Mr. Gately said.

But expansion isn't new to M&T. The bank's assets have grown fivefold since 1990, mostly through acquisitions. And along with the growth, M&T has managed to build a good reputation among many consumers.

"I think its a super bank," said Dolores Thompson, on a recent cold and sunny day here, after getting money from an M&T automated teller machine.

Ms. Thompson, who lives in Poughkeepsie, N.Y., said she doesn't currently bank with M&T. But she has relatives who do, and she said they speak highly of the institution.

"I'm thinking of moving here in the near future, and I'd feel comfortable putting my money in [M&T's] hands," she said.

She added that she'd be happy to buy investments from M&T because of its "good name."

But selling investments to conservative clients can be tough. Mr. Gately acknowledged that many M&T customers are more comfortable with saving than investing. Buffalo resident Mark Zamboroski typifies this attitude.

"I work hard, and I don't gamble my money away," the cab driver said.

Instead, Mr. Zamboroski said, he keeps most of his money in certificates of deposit and has never invested in mutual funds because of the risk.

But M&T aims to succeed by doing well by its customers. To that end, Mr. Gately said, the bank recently hired a highly regarded compliance officer from a local rival, Keycorp.

Mr. Gately added that he has asked Liberty's brokers and the bank's branch managers to help plan how the new brokerage will work, from compensation to back-office operations.

And according to at least one report, M&T has a history of doing well in investment sales.

Prophet Market Research, which is based in San Francisco, ranked M&T as the best bank at customer service and complying with investment sales rules in a recent survey of 50 large institutions.

Mr. Gately said M&T aims to continue making the right moves after taking over the brokerage. "A number of banks have internalized their sales programs and met with unpleasant results," he said. "We aim to do this right."

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