Seven out of 10 middle-size banks now sell mutual funds, annuities, and other uninsured investments alongside certificates of deposit, according to a newly released survey.

The Poll commissioned by a leading supplier of the new breed of bank investment products, offers further evidence of banks' scramble to broaden their consumer product lines in an era of depositor discontent.

It found that a whopping 69% of financial institutions sell the uninsured investment and insurance products. And within two years, it reported, the proportion is expected to surge to 81%.

The survey was commissioned by Boston's Liberty Financial Cos.

The results reinforce two current axioms of banking: that customers are hungry for alternatives to low-yielding deposit products, and that banks are eager for products-that generate fee income without affecting customer relationships.

Defensive Measure

"If financial institutions don't start offering nontraditional investment products, they're going to see their retail customer base and fee income dwindle," said Ronald S. Robbins, president of Liberty Financial Bank Group.

The findings are based on a telephone survey of executives at 201 banks, thrifts, and holding companies with assets between $750 million and $20 billion. The poll was conducted during September and October by Research & Forecasts Inc., an independent New York-based concern.

One of the poll's most surprising results, according to Mr. Robbins, was a growing belief that bank certificates of deposit could be extinct by the year 2000. Though 80% of respondents rejected this statement, 24% of southern bankers who were polled concurred.

"That's a lot more than it was a year or two ago, when CDs could do no wrong," Mr. Robbins said.

The survey also found that banks in the South and Midwest have embraced the market for alternative investments more aggressively than their counterparts in other regions.

The fact that bankers are recognizing a sea change in investment habits was underscored by their predictions about the near future. A strong 71% of respondents agreed with a statement that more dollars will go to investment and insurance than to

The most popular, alternative investment product among respondents was mutual funds, followed by discount brokerage, financial planning services, and asset-management accounts.

Nontraditional products, not surprisingly, have their greatest following among the 139 institutions in the survey that are already selling them. Of this group, 131, or 94%, agreed with a statement that selling investment products is one of the best way to increase profit margins.

On the flip side, 87% of the group that now sells funds and other nondeposit products agreed that "banks that do not sell them will have a harder time competing in the 1990s."

Most of those selling the new investments, 86%, say that the products have become more important to bank profitability in the past five years.

In other findings: * Some 55% of the banks polled offer mutual funds; 14% said they planned to offer them soon. * Mutual fund sales are expected to increase by 71% of the respondents. The median forecast is for growth of 25% in sales over the next 12 months. * Discount brokerage services - sales of stocks and bonds - are offered by 44%, and 7% plan to do so in the future. * Financial planning services are offered by 40%, and 15% plan to start. * Asset management accounts are also offered by 40%; another 12% plan to start offering them. * On the insurance side, fixed-income annuities are the hottest product, offered by 40% of respondents. Another 16% plan to do so.

Variable-rate annuities ranked as the second-most-popular insurance product, with 36% of respondents now selling them and 16% planning to do so.

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