Kenneth R. Leibler is president and chief executive of Liberty Financial Cos. But sometimes he'd rather be Groucho Marx.

"He had a short and simple answer for everything," Mr. Leibler says, admiring a Groucho doll that lies on his couch with a cheap stogie sticking from its mouth.

Mr. Leibler, 48, wishes he had short and simple answers for some weighty problems-like how to harness disparate acquisitions (five of which he completed only two years ago) and cross-sell their products to banks, financial planners, brokerages, and insurance agents, as well as directly to investors.

Sitting in his spacious office at a table with a Bayer aspirin tablet the size of a record as the centerpiece, Mr. Leibler explained how he plans to entice financial institutions to take on Liberty's mutual fund and annuity products.

Why banks?

"If they are to justify themselves to customers, they really are going to need to be competitive with Merrill Lynch & Co., Charles Schwab & Co., and Fidelity Investments," he said. "What we bring to the bank is not only products but really good marketing techniques."

Liberty had been trying to buy its way into the bank marketplace even before Mr. Leibler arrived in 1990. The company set up Liberty Financial Bank Group in 1980, which offers brokerage services to banks, and has built that business through acquisitions ever since.

Last year's purchase of Independent Financial Marketing Group, White Plains, N.Y.-which took over the name Liberty Financial Bank Group-should increase by more than 50% banks' contribution to overall sales, Mr. Leibler said. Sales through banks were 14% of Liberty's total of $7.6 billion last year. Mr. Leibler projects a 22% contribution by the end of 1997.

Independent Financial alone gave Liberty access to nearly 100 clients, boosting its client list to 198. But while sales should jump just as a result of the longer client list, Mr. Leibler acknowledged sales per client could be a lot higher.

"I don't think we ever subscribed to the notion that it was going to be an instant success story," he said. "For whatever reason, banks still sell fixed-income funds, while all the action over the past two or three years has been in equities."

Of course, Liberty never had much of an equity offering for banks or other financial advisers, given that its fund company, The Colonial Group, is a bond fund shop and its equity family of Stein Roe & Farnham Inc. is a no-load company.

But another problem has affected Liberty's relationship with banks and other potential markets: It has been struggling to gain recognition as an asset manager.

Formed in the 1970s as Liberty Financial Services, the company was an independent money manager of which insurance underwriter Liberty Mutual Group owned 20%. In 1990, Liberty Mutual increased its stake to 80%, tinkered with the name, and brought in Mr. Leibler to build the subsidiary through acquisitions. But the company couldn't shake being under the banner of an insurance company.

Liberty Financial had already acquired no-load mutual fund company Stein Roe, then Keyport Life Insurance Co. For years, lackluster performance at Stein Roe kept the Liberty asset management business in the shadows. Thus, Liberty became known as a seller of Keyport's annuities, which still contribute 50% of the company's overall sales.

But things are starting to look up at Liberty. Shortly after the Colonial acquisition in January 1995, Liberty Financial went public. And though the valuation of its stock (12 times earnings) remains below the average for asset management companies (19 times earnings), Wall Street is taking notice.

"The stock has been reacting to the fact that they are increasingly becoming an asset management company, which is a higher-multiple business than (underwriting) annuities," said Richard Strauss, an analyst at Goldman, Sachs & Co.

Mr. Leibler has been reinventing the various acquisitions. "He has put renewed vigor in the mutual fund business," said Burton Greenwald, a mutual fund consultant in Philadelphia.

The Stein Roe family finished 1996 as eighth-best in performance out of 63 competitors, according to a study by Lipper Analytical Services and Barron's.

Liberty is trying to make things happen at the Colonial Group, too. The company snared Stephen Gibson from larger rival Putnam Investments, an executive who had built a reputation for conjuring up innovative products as a senior managing director in product development. Mr. Gibson now is Colonial's president and chief executive officer.

"We're going to return Colonial to its roots as an innovative company," Mr. Gibson said.

Indeed, Colonial has rolled out a new tax-managed mutual fund. And Mr. Gibson went so far as to interview the son of Colonial's founding father, James Orr, to get information on its original vision.

Colonial has also added the aggressive international portfolios of Newport Pacific Management Inc., which Liberty bought in 1995.

Finally, a move that is sure to boost Liberty's sales profile among banks and financial advisers was the hiring last month of two top sales executives from Putnam, Louis Tasiopoulos and Jim Tambone. They are senior managing directors, distribution, at Liberty. Mr. Tasiopoulos headed Putnam's sales through banks, and Mr. Tambone oversaw Putnam's sales through financial advisers.

The move could backfire, though. Liberty and Putnam are now embroiled in a lawsuit over these executives' departure as well as over Colonial's Mr. Gibson. Putnam alleges that the executives violated nonsolicitation and nondisparagement agreements in their contracts.

"We don't think it has a lot of merit," Mr. Leibler said.

Executives at Liberty also credit Mr. Leibler for making strides in integrating the company's parts. They have been meeting with him once a month to share ideas. "There's a distinct culture emerging," said John W. Rosensteel, Keyport's president.

But are Mr. Leibler's efforts too little, too late? The problem for Mr. Leibler is that many of Liberty's rivals-Fidelity and Putnam, along with big names like Franklin Resources, Aim Management Group, and OppenheimerFunds Inc.-have beaten him to the bank marketplace. And banks and brokerage firms alike are shrinking the lists of mutual fund vendors they will offer.

For example, Signet Banking Corp., an aggressive $11.5 billion-asset retail bank in Richmond, Va., has been targeted by Colonial for its Colonial Newport Tiger Fund. But to get on Signet's short-list, funds must pass a battery of tests, and the Newport Tiger portfolio-which invests in emerging markets-didn't make the grade.

"It's a pretty cool fund, and I would purchase it personally," said James Eads, president of Signet Financial Services, "but at the time we looked at it, Newport fell short of our criteria."

And Dime Savings Bank of New York is a classic example of a bank perfectly happy with its short-list of Fidelity, Putnam, Oppenheimer, and Franklin. "I don't feel compelled to look into" Liberty, said Edward Diamond, president of Dime Securities Inc.

Mr. Leibler said he believes the short-list trend will turn around soon enough, as investors demand variety from financial advisers. He cited the proliferation of mutual fund supermarkets in which companies, including some banks, "tout the fact they can offer 500 to 1,000 mutual funds."

Some describe Mr. Leibler as the kind of man who can pry his way into banks and other distribution channels. As president and chief operating officer of the American Stock Exchange in the late 1980s-the youngest president of an exchange ever, at 36-he expanded the board into options trading.

"He's a visionary," said Mr. Greenwald, the consultant. "He's a very thoughtful, down-to-earth guy who has surrounded himself with good people."

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