All Bill Boykin wanted to be was a bond salesman at a local Albuquerque bank.
But after he started the investment department at Western Bank, he found himself caught up in the same frenzy that has hit other banks: marketing mutual funds.
Thanks to strong customer demand, mutual funds now account for four-fifths of his business. His time was solid: Small brokerage shops like Mr. Boykin's are finding it increasingly difficult to obtain a steady supply of municipal bonds because the fund companies are beating them to the punch.
About 75% of the mutual funds Mr. Boykin sells are fixed-income bonds funds.
Pacts with Big Firms
Western has sales agreements with seven major fund families, including Colonial, Franklin, Dreyfus, and Van Kampen Merritt.
Mr. Boykin also sells municipal funds from Thornburg, Santa Fe, N.M.
Western Bank, with eight Albuquerque branches and $154 million in assets, has no trust department. The investment department was founded because Boykin, a longtime broker and investment banker, had been doing business with Western chairman Bill Fietz for 20 years.
"For 10 years, we had talked about starting an investment department at the bank," Mr. Boykin recalled. "I don't remember whose idea it was, we were talking about it for so long."
Point of Pride
Today, the department has $25 million in assets under management. Mr. Boykin is proud of the fact that Western was the first and only New Mexico bank to register as a broker-dealer.
Western Bank can do so, Mr. Boykin says, because it does not underwrite securities or commit to large blocks. It acts only through agency trades on an order-by-order basis and uses a brokerage to clear its trades.
Mr. Boykin has no interest in selling individual stocks. During an interview, he leaned back in his chair and pointed to a terminal displaying bond prices and maturities.
"You can see my equipment right here," he said with a laugh. "We sell mostly fixed-income because most of our clientele are getting out of CDs. They're not ready to get into growth stocks."
Mr. Boykin's office is in a modest branch office in Albuquerque's affluent Northeast Heights area. He and two other brokers have small cubicles against the wall with glass on the side facing the lobby.
His office is littered with ash trays, golf paraphernalia, and trophies. The walls are covered with photos of Mr. Boykin and his playing partners after winning tournaments.
Branch managers worry about losing deposits to the investment department, but Mr. Boykin estimates that 70% of the money coming through his door has been from outside the bank.
The bank has a passive, ordertaking sales philosophy.
Not a |Bucket Shop'
"I pound on my people that we want the customer to be comfortable," he said. "We don't want to exert any pressure at all. We're never going to have 20 salespeople, and we're not going to have a bucket shop," Mr. Boykin stressed.
A bucket shop is a brokerage industry term for a hastily formed brokerage operation that intends to be around for a short time, selling bad investments to unsuspecting clients and then leaving town before authorities and customers catch on.
Albuquerque banks have experienced a rash of buyouts by out-of-state holding companies, and with them came their brokerage operations.
Western Bank has no plans to expand its three-person brokerage operation, however.
"We're not worried. If you build 10 restaurants in a row in the same part of town, more people will come by to eat there," Mr. Boykin reasons. "This way, more people will come by to banks for investment products."
Country Club Links
Mr. Boykin's business got off the ground in part through his associations with members of the Albuquerque Country Club.
Just after he started the bond department at Western Bank early in May 1992, Mr. Boykin was sitting in the clubhouse grill after a round of golf. He struck up a conversation with a man whose company had just completed a stock offering and needed a short-term manager for the money.
One thing led to another, and Mr.Boykin ended up managing the $55 million.
Forty-five days later, the same company gave Mr. Boykin another $80 million to manage. Though short term, the arrangement helped Mr. Boykin launch his operation.AT A GLANCE Western Bank Headquarters Albuquerque Assets $154 million Branches 8 Investment Bill Boykinproducts chief