Though banks have long viewed American Express Co. as their enemy, they shouldn't feel threatened by its latest venture into the investment products business, say executives at the charge card giant.

With American Express Financial Direct, Amex is targeting customers who "haven't been going to banks anyway," said William J. Heron Jr., president of the new unit. "They've been going to mutual fund managers or Charles Schwab."

American Express launched American Express Financial Direct Wednesday. The new unit offers proprietary and outside mutual funds, a money market fund, annuities, and discount brokerage services over the telephone. Customers call 800-AXP-8800 to reach a financial consultant who is licensed to sell investment products.

Despite Mr. Heron's assertion to the contrary, bankers see the Amex venture as a direct competitor of their investment products programs. "Obviously, they're very formidable," said Allen Croessmann, president of Bank of Boston Corp.'s brokerage. "They have a lot of muscle, and experience."

Still, Amex's new unit is designed for consumers who don't feel they need advice on investing their money. People who want to deal with a broker face-to-face will still visit banks, Mr. Croessmann said.

That fact is not lost on American Express, which has been trying to build alliances with bank brokerages. The company has already put brokers in 65 community banks but stopped going after large regional banks after three failed attempts.

With its new effort, Amex is trying to attract customers beyond holders of its charge cards, Mr. Heron said. A print advertising campaign will be followed by a direct mail effort.

Among the first mutual fund offerings, which can be bought with an initial investment of $2,000, are 12 no-load versions of the company's IDS Family of Funds, which it manages for customers of its financial planning subsidiary. The company is also offering 60 portfolios managed by Founders Asset Management, Invesco Capital Management, and SteinRoe & Farnham Inc.

Selling investment products isn't new for American Express. Its fastest- growing unit during the past decade has been its American Express Financial Advisors, formerly known as Investors Diversified Services, or IDS.

Amex chairman Harvey Golub, who used to head that unit, is now trying to combine the charge card business' brand name with the company's success in financial planning.

The card giant stands to become a powerhouse marketer of investment products because it has a sophisticated customer data base, observers said. "They can immediately identify customer habits," said Burton Greenwald, a Philadelphia-based mutual fund consultant.

American Express tried marketing mutual funds in the mid-1980s, but the effort was "half-hearted," said Mr. Greenwald. Amex failed to "transfer American Express expertise in credit cards to the investment area."

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