Mellon Bank Corp. is looking to build a defined-contribution sales force, a senior official told analysts in New York last week.
"That basically means finding more shelf space for our investment products in defined-contribution plans that are administered by other organizations," said Stephen E. Canter, vice chairman and chief investment officer at Dreyfus Corp., Mellon's investment management unit.
Mr. Canter was participating in a presentation by the Mellon senior management team at the annual Bank and Financial Analysts Association meeting.
In pursuing defined-contribution business, the bank would be borrowing a page from Founders Asset Management's book, said Mr. Canter, referring to the mutual fund company that Mellon is acquiring. Mellon, which is based in Pittsburgh, agreed last December to buy the Denver-based company for a reported $275 million. The deal is expected to close during the second quarter.
"Our friends at the Founders company are very successful in selling to this market," said Mr. Canter. During the last three years, the Denver fund company has gathered over $1.5 billion of assets through defined- contribution sales, he said.
Mr. Canter said that he believes that a similar strategy can be applied across Mellon's investment product line.
Mellon is currently talking to "a number of organizations," said Mr. Canter. He declined to identify any of them.
Mr. Canter said that Mellon will also seek to leverage the bank's recent acquisition of the Los Angeles-based brokerage unit, Pacific Brokerage Services, now operating under the moniker Dreyfus Brokerage Services.
Mellon acquired the mainly electronic broker-dealer during the last quarter of 1997, when roughly 60% of its 5,500 daily trades were done on- line. According to figures presented by Mellon last week, Dreyfus Brokerage now handles 6,000 trades a day, 70% of them over the Internet.