Marine Midland Focusing on Fund Sales

Marine Midland Banks Inc. is putting an emphasis on its investment sales program, in an effort to keep pace with other more aggressive New York banks.

The Buffalo, N.Y.-based banking company, owned by HSBC Holdings PLC, London, has nearly completed a plan to internalize much of its investment sales activities, and has just rolled out the first of many bank branch investment centers.

"We are now putting a lot of emphasis on financial planning," said Kerry B. Alberti, executive vice president in charge of investment services. "We hope that will solidify our ongoing relationships and bring us more business."

Marine's markets stretch from upstate New York to Manhattan. That puts the $17 billion-asset banking company in direct competition with money- center banks, such as Chemical Banking Corp. and Citicorp, and regional players like Keycorp.

As part of the new push, Marine is training and licensing its sales force to be able to sell a wider variety of investments, including mutual funds, annuities, and individual securities.

The 60 investment sales representatives originally were part of a program run by Cigna Corp. That program was dismantled last summer, and most of the representatives were rehired to work for the bank's Marinedge sales unit, which sells mutual funds through its 320 branches.

Now about 60% of the representatives hold Series 7 licenses from the National Association of Securities Dealers. But Mr. Alberti said he expects the rest of the sales force to have Series 7 licenses by the end of this month.

The brokers clear investment sales through Pershing, Jersey City, and annuities are sold through Independent Financial Services Marketing Group, White Plains, N.Y., which receives a fee for each transaction.

Mr. Alberti said the banking company is looking at ways to internalize its annuities sales, but no firm decision has been made about the arrangement with Independent Financial.

For now, representatives primarily sell the bank's proprietary Mariner Funds, as well as funds from AIM Capital Management, Franklin Resources, Massachusetts Financial Services, Oppenheimer Management Corp., and American Capital Management and Research.

Individual securities transactions are handled through Marine Midland Securities, the banking company's discount broker-dealer.

In recent years, mutual fund companies have turned on the charm in hopes of landing on the banks' short lists of preferred mutual funds. But Mr. Alberti said the attention received from those companies pales in comparison to insurance firms, many more of which "come knocking on our doors every week."

Part of the reason that mutual fund companies and insurers court banks so aggressively, Mr. Alberti said, is that once they make it onto a short list it's often difficult for banks to dislodge them.

Once investment counselors "are familiar with a fund family, it can be very disruptive to switch, so you'd better have a good reason to cut a company out," Mr. Alberti said.

Right now the bank's sales reps sell variable and fixed annuities from Alexander Hamilton Life Insurance Co., U.S. Life Insurance Co., ITT Hartford Life Insurance Cos., Cigna Corp., and American Mayflower Corp.

While Mr. Alberti declined to release sales figures, he did say that sales were equally split between mutual funds and annuities. A spokeswoman for the banking company said that investment sales contributed 17% to the banking company's noninterest fee income for 1994.

To boost awareness of Marine's investment services, the bank unveiled a new investment center kiosk at its main branch in Orchard Park, N.Y.

There customers can receive investment advice through an interactive computer program, accessed through either a touch-sensitive screen or a mouse. The program generates asset-allocation models that fit plans for retirement or funding a college education.

The information is so detailed that individuals can even research college campuses and get information on housing, entertainment, and other costs. Sales representatives would then recommend individual mutual fund portfolios that fit into the allocations generated by the program.

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