As he steps into a new role as president of Keystone Financial Inc.'s wealth management businesses, Mark L. Pulaski is solidifying plans to make them the centerpiece of the Pennsylvania company's growth strategy.

"We've done a very good job" selling investment products, he said, "but we've only penetrated 3% to 4% of our customer base. It would be nice to get to 25% over time."

Mr. Pulaski, who for the past two years had been president and chief operating officer of the Harrisburg company's flagship Keystone Bank, assumed his new post Nov. 29 in a restructuring of its retail banking operations. He says the wealth management business has fascinated him for some time.

"This goes to the core of our customer relationship," said Mr. Pulaski, 45. "Wealth management is a much stronger core around which to build."

As a division, wealth management encompasses all of Keystone's investment services operations, including personal trust, full-service and discount brokerage, mutual funds, and retirement benefit services. The unit has existed for about a year, the result of the merging of trust departments of Keystone's seven component banks, which the company is consolidating under a single charter.

Keystone executives are still ironing out details of corporate strategy and goals. But the key, according to Mr. Pulaski, lies in linking various products and services so as to provide a comprehensive suite of services tailored to the needs of a given bank customer.

For instance, Mr. Pulaski said, the bank will seek to attract young people to its trust department by extending business hours and running seminars on topics such as budgeting and household planning. It also plans to attract niche groups - such as doctors and attorneys - with which it works, by assembling investment packages tailored to their specific needs.

Keystone has $2.4 billion of assets under management, including about $1.2 billion in its proprietary mutual fund family.

To boost investment product sales, the bank plans to add to its sales force, which currently consists of about 30 series 7-licensed representatives and over 200 platform salespeople. Mr. Pulaski said the bank would likely add to both groups by early next year, although it was still determining by how much.

Mr. Pulaski said he will also focus on Keystone's retirement planning business, which is currently used by only 5% of its commercial accounts. In order to double or triple that percentage in the next two years, he said, the bank is looking at ways to create a "401(k) solution," again, by coordinating such areas as investment products, record keeping, and financial consultants.

Asset management has grown steadily as a piece of Keystone's business. In 1996 revenue from asset management - comprising trust income, mutual fund fees, brokerage fees, investment management fees, and sales of investment products - totaled $331 million, 5.2% of the banking company's total revenue. In 1998 asset management revenue was $366 million, and 8.6% of total revenue.

Chief financial officer Donald F. Holt estimated that asset management would account for 9.8% of the company's 1999 revenue.

Still, some observers questioned the extent to which the company could build on its existing investment capabilities.

"They have fantastic ideas, but a problem with implementation," said Collyn Bement Gilbert, an analyst at Ferris Baker Watts in Baltimore. During the bank's consolidation, she said, management "got too fixated on numbers, and lost sight of how to apply them."

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