To hear James K. Mitchell describe it, you'd think he runs a boot camp instead of an investment products marketing firm.
Job applicants have to endure a battery of psychological tests and clear 10 reference checks just to get a second look from his San Diego-based firm, James Mitchell & Co.
And once on board, employees must adhere to a strict dress code and check in with their supervisors by phone at appointed times throughout the day.
"Growing up, I went to a Baptist military school," Mr. Mitchell said. "I think it stuck."
Healthy Market Share
Mr. Mitchell's highly regimented approach to marketing mutual funds and annuities is unusual, but it certainly seems to get the job done.
Last year, his firm booked $584 million in annuity sales at five banks and thrifts. That's a healthy chunk of the market: $12 billion in annuities were sold through hundreds of banks in 1992, according to Kehrer Associates, a Princeton, N.J., firm that tracks the business.
This year, Mr. Mitchell says, his company's annuity sales are on track to reach $800 million. A new mutual fund program at Central Fidelity Bank in Richmond, Va., should bring in another $70 million in sales.
Mr. Mitchell, who entered the annuities business in his native Texas in 1965, launched the company in 1984.
Since 1988, the company had been part of Spear Financial Services, San Diego. But last month, after selling off discount and full-service brokerage units to focus on Mitchell & Co.'s marketing activities, Spear renamed the slimmed-down company JMC Group Inc.
Mr. Mitchell struck out on his own at a time when most states prohibited banks from getting into the insurance business. Because the ban included annuities -- which are insurance contracts that invest in a portfolio of securities to provide a steady stream of income to owners -- he had to find some innovative ways to sell them through banks.
Skirting the Ban
To get around the ban, he hit upon the idea of creating trusts to hold the annuities, with banks as trustees. "A bank has every right in the world to promote a trust account," Mr. Mitchell said. Under the arrangement, Mitchell & Co. pays trust fees rather than commissions to institutions using its services.
Today that group numbers six. Last month, Mitchell & Co. signed up San Francisco-based Sumitomo Bank of California as a client. Its roster also includes Central Fidelity, First Tennessee Bank, Barnett Banks, and two California thrifts, Sacramento Federal Savings and Hemet Savings.
"We're talking to about 15 banks now, but we will only add one or two a year," he said.
The company employs nearly 300 people, 150 of whom are sales representatives. By administering the psychological tests, Mr. Mitchell says, he can screen out pushy salespeople.
Riding Shotgun Once a Week
The company also has 30 regional vice presidents, each supervising five salespeople.
"They ride shotgun with them once a week," Mr. Mitchell said. Spending a full day with each of their charges helps the vice presidents ensure that compliance is up to snuff, he added.
"Mystery shoppers" are sent out to make sure customers are treated courteously and aren't urged to consider investments that may be unsuitable.
Mr. Mitchell says his salespeople booked 110,000 appointments last year and received only 34 consumer complaints.
The company also keeps close tabs on the six insurance companies that underwrite the annuities it sells. Due diligence is performed every 90 days, and detailed reports are sent to its bank clients. "We're in a fishbowl with these banks," Mr. Mitchell said. "We can't afford to take a risk."