WASHINGTON - For an industry obsessed with five-star ratings, the mutual fund crowd was sure pleased to hear from a four-star general last week.

Retired Gen. Colin L. Powell drew a standing-room-only crowd of 1,600 at the Investment Company Institute's general membership meeting here. His hourlong talk - on "the management of crisis and change" - was part inspiration, part war stories, and part stump speech.

In recent months, Gen. Powell has been very cagey on whether he will toss his hat in the presidential ring. When an audience member brought up the question amid approving applause, the general once again pleaded indecision.

"I don't know what I'm going to be doing my life," Gen. Powell said. "But I do feel strongly that I want to be in public life someplace."

Gen. Powell also took an opportunity to solicit some advice from the audience.

"My first question is, Do I sell my bond funds?" he asked. "Come on guys, where do I put my money?"

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As the chairman of the Securities and Exchange Commission, Arthur Levitt is used to getting top billing at the various conferences he attends.

But last Friday morning - during his breakfast remarks - he seemed amused to be the opening act for one of America's most talked-about politicians.

"I'm know why I'm really here," said the silver-haired regulator, gazing out at hundreds of mutual fund executives dining on scrambled eggs stuffed in a crepe. "I'm here to warm you up for Newt." He was speaking, of course, of House Speaker Newt Gingrich, R.-Ga.

Mr. Levitt, a champion of ripping the legalistic jargon out of mutual fund prospectuses, went on to applaud the efforts of Dreyfus, Fidelity, and six other fund companies for developing a new, simplified statement of a fund's goals for shareholders.

His remarks also hinted at why banks are pushing heavily in the mutual funds business. "The supremacy of the FDIC-insured savings account is clearly challenged, and that's a monumental change."

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For a long time, many fund executives were skeptical about the value of using banks to sell their investment products.

Some of that prejudice is gone, but old habits die hard.

The bank channel "is overrated in its distribution capabilities," Dreyfus Corp. vice chairman Lawrence S. Kash said during a panel discussion.

His remark came when a member of the audience asked another panelist about animosities between bank brokers and insurance agents who sell annuities. The panelist answered the question, but Mr. Kash - whose company is a unit of Mellon Bank Corp. - chimed in unexpectedly.

Bankers in the audience didn't appear fazed, though. Like many companies, Dreyfus was hurt by the bond slump, so its sales through banks dropped like many peers', observers said.

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