When it comes to cross-selling bank products, Norwest Corp. is widely considered the best in the business.

Now the Minneapolis banking company is making an all-out effort to extend its sales prowess to include mutual funds. In doing so, it hopes to succeed in an endeavor that has stymied other top banks.

Norwest executives know there is a big pool of untapped business out there. Only 4% of the households that do business with the bank buy investment products there, and of those, just half buy mutual funds.

"There is definitely a lot of opportunity to penetrate even further," said Lee Chase, vice president, Norwest Funds.

Since January, the $93.2 billion-asset banking company has run television and radio advertisements using comedian Bob Newhart as a pitch man for Norwest's investment products and services.

Print ads have focused on the bank's proprietary mutual funds and the funds it offers from outside vendors. And Norwest has sent out hundreds of thousands of pieces of direct mail to its customers touting fund investment.

Getting existing customers to buy additional products is extremely important to banks.

Selling to existing customers is easier and cheaper than finding new ones, said Charles Wendel, president of Financial Institutions Consulting, New York. And the more products customers have with the bank, the less likely they are to take their business elsewhere, he said.

"It's something everybody is trying to do, but that few can execute," he said. "The issue for all banks is how to get people to give them their investment dollars."

Norwest's push to sell more mutual funds is a result of a challenge laid down a year and a half ago by Richard M. Kovacevich, the bank's chairman. His goal: to generate one quarter of the bank's earnings from fee- generating businesses other than credit cards within five years, up from 14% now.

The bank's prospects for success could be bolstered by its planned merger with Wells Fargo & Co., Ms. Chase said.

"It gives us an opportunity to nearly double our product offerings," she said. "Wells has some products we don't have that meet particular niches."

Wells' LifePath Funds, for instance, should be attractive to Norwest's 401(k) customers, Ms. Chase said.

P. Jay Kiedrowski, executive vice president for investment management and trust at Norwest, said the scale of the combined fund families - the addition of Wells' funds would roughly double the banks' fund assets under management - would allow Norwest to improve its service.

It would also help Norwest to sell more of its proprietary funds though nonbank brokerage houses, an area where Wells has been more aggressive, he said.

"We have been concentrating more on buying banks and building internal distribution," he said.

Banks have had limited success selling mutual funds, whether their own or other vendors'. In the early 1990s, it was widely thought that banks could account for a quarter of all mutual fund sales within a few years.

That has not come to pass - banks' share of the market is around 15%, according to Cerulli Associates, Boston. Part of the reason is that most investors still don't associate banks with mutual funds, annuities, and other investment products, said Mr. Wendel.

"Banks have not done a very good job telling customers they have these products available," he said.

There are other reasons that banks haven't lived up to their potential as fund marketers. For one, fund companies have stronger brand name recognition than bank funds do. Moreover, a perception persists that nonbank brokerage firms have better sales reps and a broader product range than banks, Mr. Wendel said.

But Norwest may be able to break through, thanks to its community-bank style that has built a reserve of trust and strong customer relationships, Mr. Wendel said.

Norwest's prowess at cross-selling has been well-publicized: The bank's average household has almost four of its products, and it is aiming to increase that number to eight.

That gives branch managers an incentive to sell more mutual funds, because each individual fund a customer buys counts as one of the eight products.

One factor in Norwest's cross-marketing success is its direct-mail capability.

To select clients who are likely to buy its funds, Norwest culls a data base that sorts the bank's customers based on their wealth, age, and other factors.

To arrange a mailing to pitch mutual funds, the bank might go through its list of checking account clients for instance.

The bank prides itself on having sophisticated and slick marketing brochures.

One pamphlet touting the Advantage Income Equity Fund features a rooster perched atop a giant egg. "If you'd invested with us 10 years ago, this is how you'd be sitting now," the pamphlet reads.

Another mailing piece advertising the Advantage Funds and the outside funds the bank offers has a drawing of a symphony and is titled: "A Well- Orchestrated Performance Through America's Leading Fund Families."

Most funds Norwest sells are those in its Advantage family, which has 43 funds and $21 billion of assets under management.

Advantage Funds account for about 70% of the assets in the bank's trust area and half the assets in its 401(k) business.

Norwest, however has had less success selling Advantage Funds through its retail brokers. The bank is hoping that its proprietary fund sales comprise one-third of the fund sales through its brokerage house this year, up "a point or two" from last year, Ms. Chase said.

That puts it only a little above the average for banks, said Kenneth Kehrer, a consultant in Princeton, N.J. Industrywide, proprietary bank mutual funds have accounted for between 28% and 30% of total fund sales through bank brokerages, Mr. Kehrer said.

Proprietary funds are more profitable for banks because they bring management fees as well as sales fees.

But selling outside funds is also important because doing so allows banks to retain control over their customer relationships - having a wide selection of funds can keep customers from going to Charles Schwab & Co. or another fund seller.

Norwest has nine outside fund vendors, an unusually long list. The top sellers are Putnam Investments and Massachusetts Financial Services.

"We want to make sure we have something out there to meet all our clients' needs," Ms. Chase said.

Norwest expects to have about $1 billion in net mutual fund sales (new investment minus redemptions) through its retail brokerage business this year, along with net sales of $280 million through its trust operation and $780 million in its 401(k) business.

Sales through the retail brokerage are running 70% ahead of last year's rate, and Norwest's stable of investment sales representatives is growing fast, too. The bank has 400 of them, a gain of 35% in the past year.

Unlike some other banks, Norwest does not offer special incentives for its sales representatives to sell its proprietary funds rather than funds from outside vendors.

"We've done it the hard way," Mr. Kiedrowski said.

Norwest's fund family, which employs nearly 200 money managers, is distinguished by the diversified style of its funds, said Mr. Kiedrowski. In a rare approach, its funds might include large- and small-cap stocks and use both a value and a growth style.

Such an approach is unlikely to bring very high returns, but the risk- reward ratio is attractive, Mr. Kiedrowski said.

"They are geared to investors who are prudent and aren't just gambling with their money," he said.

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