Though banks have spent billions in recent years to develop and promote a widening range of financial services, customers are apparently less aware of their banks’ basic investment offerings than they had been several years ago.

While disappointing, the findings — the result of a recent survey of bank customers in a handful of major cities — generated little surprise among bankers.

R. Gregory Knopf, managing director for mutual funds at Unionbancal Corp., said most customers “still perceive banks in terms of deposits and lending, and it is only recently that banks are marketing themselves as true financial services firms.”

Though Unionbancal, which is mostly owned by Bank of Tokyo-Mitsubishi Ltd., spent tens of millions to market its banking products last year, Mr. Knopf said, the bank’s Highmark family of mutual funds had no budget for consumer advertising and only $3 million to promote the funds to financial advisers and financial planners.

Union Bank’s situation is a typical one. Of the large amounts banks spent on advertising, bankers said, little if any goes to specifically promoting banks’ investment menus.

The effect has been a loss of customer awareness. In December, NewGround Resources Inc., a St. Louis bank marketing firm, surveyed 160 bank customers in branches in New York, San Francisco, and St. Louis. The results, released this week, showed that 44% knew their banks offered investment services. When NewGround asked the same question in 1997, 51% of customers knew this.

For some individual products the numbers were especially discouraging. Only 10% said they knew their bank offered online banking, 3% mentioned financial advice, 5% retirement accounts and 8% mutual funds. That compared to higher – if still remarkably slim – results for credit cards and mortgages, both 12%, with 11% for other investment services.

Certainly, massive budgets large fund companies are deploying to reach the same consumers can tilt the competitive balance. But others said a well-targeted campaign to customers sometimes can be enough to overcome the effects of competitors’ media blitz.

Harold “Skip” Gianopolis, a senior vice president of wealth management services at Harris Bankcorp, a subsidiary of Bank of Montreal, said the Chicago-based bank launched a multimillion-dollar ad campaign eight months ago. However, he said, singling out customers for “financial planning on a one-on-one basis” has proven even more effective in increasing the management unit’s assets.

Charlene Stern, NewGround’s senior vice president of branding, strategy, and design, said it is crucial to find the customers most likely to use investment services and attract them with direct mail and other marketing tools, instead of merely blanketing the market with advertising. “I think banks, in their rush to sell products, have missed the larger picture to tell customers that there is a larger meaning to this bank,” she said.

John Pugliese, the executive vice president of retail banking at Bank of New York, said that the slow and steady education of customers can be frustrating, but is often very fruitful.

Mr. Pugliese said that Bank of New York — which has $77 billion of assets and long ago steered away from operating like a typical bank — markets its investment products through direct mailings to retail bank customers. In the past year, it has increased income from annuities and mutual funds by 20%, and 90% of new assets have come from retail banking customers.

“Banks need to do a better job promoting their investment capabilities,” Mr. Pugliese said. “It is an awareness campaign, and banks need to step beyond telling consumers about traditional banking products and start telling the story of their investments.”

George Eshelman, an executive vice president at Comerica Securities and director of its investment bank, said advertising played a large role in the Comerica Inc. unit’s 25% growth last year, to $12 billion of assets under management. Comerica Securities uses newspaper, television, and radio advertising and the brand strength of its parent. In addition, the Detroit Tigers’ new baseball stadium is named Comerica Park.

But the bank branches’ efforts to get the word out, he said, can share much of the credit for that growth.

“The branches and the tellers are a utility to gather corporate and individual assets,” Mr. Eshelman said. “They see the deposits, securities, trust accounts. They know the customers. We try to motivate and compensate them accordingly to encourage this practice to continue.”

NewGround’s Ms. Stern said that motivating tellers in bank branches has been an uphill battle at most banks. Her firm, which works with 125 banks, has found that “people are looking for value and credibility, and the tellers, who are the front line of your bank, don’t have the credibility or the expertise to talk about what a customer should do with their money,” she said.

But many banks are doing what they can to change that perception. At Centura Bank in Rocky Mount, N.C., Ed Hipp, the head of the asset management division, said tellers are being coached on how to handle specific customers. “This is part of the sales meeting, explaining to tellers what they should do and what they should say when a customer deposits a check from Merrill Lynch,” he said. “It is coaching the front lines for every situation that is the difference in developing customer loyalty.”

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.