Striving to become a major player in mutual fund sales through financial institutions, New York Life Insurance Co. has created a bank and financial adviser division and beefed up its wholesaler staff.

The company plans to more than triple its bank fund sales this year, to more than $100 million, and it wants to be one of the top 10 bank distributors within three to five years, said Frank Mistero, president of its NYLife Distributors Inc. in Parsippany, N.J.

"We're serious about this," said Mr. Mistero.

But the company has a long way to go. New York Life sold $30 million of funds through banks in 1997, its first year in the bank channel. Its figures are dwarfed by those of rivals like Putnam Investments and Franklin Resources Inc., which racked up bank fund sales of $10 billion and $4 billion, respectively.

New York Life, which had one dedicated bank wholesaler last year, created its bank and financial adviser division Jan. 1. By hiring and internal moves it has built a cadre of 10 bank and financial adviser wholesalers, who report to national sales manager Glen Blackston, Mr. Mistero said.

In February the company hired Wendy Fischler, former key accounts manager for banks and financial advisers at OppenheimerFunds, to fill the same position at NYLife, Mr. Mistero said.

James Overholt, a consultant with Milliman & Robertson Inc., Chicago, said NYLife will need to distinguish itself in the market because there is little shelf space left at banks.

"There has to be a very clear differentiating factor that the marketplace will find attractive," he said. "They need now to take business away from someone else."

Mr. Mistero said bank-tailored products, such as an index fund that protects a client's original investment and educational materials such as a brochure that explains the Morningstar mutual fund rating system, will help make the difference.

"In the bank community they love this kind of material because it helps with training their registered reps," he said.

NYLife Distributors also must gain name recognition. Mr. Overholt, a veteran of the bank brokerage business who previously headed Great Western Financial Corp.'s brokerage arm, said he was not familiar with its products.

Mr. Milliman said the company is getting the word out: It has an advertising budget of more than $5 million this year.

Most of the company's 14 MainStay Funds are managed by MacKay-Shields, a subsidiary of New York Life that manages $32 million of assets and like its parent is based in New York City.

NYLife sells funds through 20 banks, including Chase Manhattan Corp. and Bank of New York, Mr. Mistero said.

It has traditionally sold its wares through New York Life's captive agent force. It added wire houses and financial advisers in 1996.

Last year NYLife sold $3.1 billion of funds, up from $2.6 billion in 1996, Mr. Mistero said. More than $1 billion of that came from the wire house, financial planner, and bank channels, up from $500 million in 1996.

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