Independent Financial Marketing Group believes it's time to bring life insurance sales to banks.

The investment marketing company, based in White Plains, N.Y., recently signed Cleveland-based Keycorp as its first client for insurance services.

The new service marks a move beyond Independent Financial's core business of helping banks market mutual funds and annuities.

Under the arrangement, Indpendent Financial will hire and train salespeople, conduct due diligence on products, and provide marketing support in return for a share of the fee income that insurance sales generate.

Independent Financial is negotiating to roll out insurance through other banks, but the process is a slow one, said Allen C. Payne, the company's new managing director of insurance services.

Mr. Payne said internal and external forces have historically hampered insurance programs in banks. the drawbacks include opposition from bank management and lawmakers who have stymied efforts, he said.

But these obstacles are now eroding, thanks to banks' growing involvement with mutual funds and annuities, Mr. Payne believes.

Banks see life insurance as "very critical to customers' overall financial planning process," Mr. Payne said.

There apparently is plenty of fee income potential, as well. A midsize bank could earn millions of dollars in fee income by integrating life insurance across retail, commercial, and private banking lines, Mr. Payne said.

The key is having "top-down support from management and clearly defined goals and responsibilities for employees," he said.

Greater Willingness to Flight Obstacles

And, while legal barriers remain, banks are at least more willing to challenge these obstacles in court or through lease arrangements with outside sales forces, Mr. Payne said.

Keycorp will take the latter approach and use Independent Financial salespeople in states where its own representatives cannot market insurance, said Mr. Payne.

Independent Financial named Mr. Payne this month to oversee insurance services, a new position. He joined the company in 1992 as a regional marketing director, offering mutual funds and annuities to financial institutions in the East.

Before that, Mr. Payne was an insurance broker with M Financial, Richmond, Va., and principal in a pension actuarial firm, also in Richmond. In 1990, he developed a pilot program for Signet Bank to offer life insurance to commercial loan customers.

Mr. Payne's background made him a natural to develop and oversee Independent Financial's fledgling insurance effort, said Rod Halverson, the firm's managing director.

Independent Financial sees life insurance as supplementing the firm's existing investment product business, Mr. Halverson said.

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