Mellon Bank Corp. has tapped a veteran retail banking executive as chief financial officer of its Dreyfus Corp. mutual fund subsidiary.

The appointment of William T. Sandalls Jr. is the latest in a string of high-level hirings at Dreyfus designed to revitalize the giant mutual fund company, which Mellon bought in 1994.

Since its acquisition, Dreyfus - with $81 billion in mutual funds under management - has lagged the fast-growing fund industry in gathering assets. Its failure to gain steam has prompted some critics to raise questions about Mellon's ability to deliver on the cross-marketing opportunities it cited when it struck the $1.8 billion deal.

Mr. Sandalls, who joined Dreyfus Wednesday, is well known in banking circles. From 1992 to 1994, he was chief operating officer at MasterCard International. He spent the previous 18 years at BayBanks, a company known for its retail marketing prowess, and rose to the post of chief financial officer.

Industry observers interpreted the appointment as a clear sign that Mellon is shaking things up at the fund company.

"Dreyfus is at a crossroads," said Geoffrey H. Bobroff, a mutual fund consultant in East Greenwich, R.I. "It is perceived to be stodgy, and hasn't been on the cutting edge."

Specifically, he said, Dreyfus is heavy on fixed-income products, but much lighter on the equity offerings that have fueled fund companies' growth in the last year. Roughly one-sixth of the company's fund assets are in equities.

"They need to diversify their product line and their distribution effort, and it will just take time," said Avi Nachmany, a partner with Strategic Insight, a New York consulting firm.

Mr. Sandalls, 51, will report to Christopher M. "Kip" Condron, chief operating officer of Dreyfus and chief executive of Boston Company Asset Management, another Mellon subsidiary.

Mr. Condron, a Mellon vice chairman, is himself a relative newcomer at Dreyfus, having taken on senior management duties in November. Neither he nor Mr. Sandalls could be reached for comment.

Mr. Sandalls, who most recently ran an investment advisory firm that catered to mutual fund shareholders, gets high marks from a former boss.

"He's a brilliant guy, and it won't take him long to come to speed" said Alex W. "Pete" Hart, who was chief executive at MasterCard International when he hired Mr. Sandalls as chief operating officer.

But Mr. Bobroff noted that Mr. Sandalls, despite his recent stint as an investment adviser, has never worked in the mutual fund industry. This, he said, could be a serious shortcoming.

"What always baffles me is why banks, in their efforts to build their fund programs, have not sought out traditional fund professionals," Mr. Bobroff said. "I would be concerned about a CFO coming into an organization with a different structure than MasterCard or a Baybanks."

But Mr. Hart, now chief executive of Advanta Corp., a leading credit card issuer, said Mr. Sandalls is up to the task.

"He is comfortable with financial service products and the technology behind them," Mr. Hart said. "He has been involved in consumer financial services, and there is a lot of overlap in this area."

Mr. Sandalls' position at Dreyfus was formerly held by Paul Snyder, a Mellon executive who had been chief financial officer on an acting basis since last August.

Dennis Shea, a bank analyst who follows Mellon for Morgan Stanley & Co., said the appointment is another step in "the remaking of Dreyfus at the top."

"What they are trying to do is expand the product offerings and marketing and distribution of Dreyfus," Mr. Shea said. "The brand name is there - it's a queston of pushing it through more outlets."

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