In a strategy it hopes will help jump-start sales of its proprietary mutual funds, Riggs National Corp. plans to have a broker-dealer up and running within three months.

Formation of the unit, to be called Riggs Investment Corp., will enable the bank to sell its funds through a variety of channels, not just its branches, said James R. Eads, the executive Riggs hired in January to run the broker-dealer.

Washington-based Riggs now sells mutual funds through a third-party marketer, Financial Network Investment Corp., of Los Angeles. FNIC's brokers will report to Riggs once the broker-dealer is established.

Having a broker-dealer could benefit Riggs in a couple of ways. Removing the middleman, FNIC, will let the bank keep more of the revenues earned from distribution.

Perhaps more importantly, the broker-dealer will let Riggs broaden its distribution outside the bank. The structure would allow Riggs to pay commissions to other brokers that sell its funds.

Retail sales of the bank's Monument Funds last year were less than $16 million, a small figure for a family that has nearly $800 million of assets under management.

The funds, which will change their name to The Riggs Funds in early June, consist mainly of converted trust fund assets, and the bank has never put a serious marketing effort behind them.

"They need to catch up," said Mr. Eads, who headed Signet Banking Corp.'s brokerage before joining Riggs. "They've really missed the great bull market."

Riggs' sales force will look to sell more funds to the embassies, foreign missions, trade associations, and other large groups that already do business with the bank.

"That's an opportunity that's unique to Riggs," Mr. Eads said.

Mr. Eads and his team are also exploring a range of distribution options including selling through small brokerages and fee-based advisers around the nation.

Already the bank has hired a wholesaler in Wisconsin and plans to hire one for the mid-Atlantic region, he said.

It may also try out direct mail and is angling to improve sales through fund supermarkets. It has been sending executives on road shows sponsored by Fidelity's Funds Network, a mutual fund supermarket that offers Riggs' funds.

Along with improving sales, Mr. Eads has been asked to find a mutual fund boutique to buy in order to complement the five funds managed by Riggs Investment Management Co. RIMCO also plans to build more of its own funds, he said.

The broker-dealer will continue to offer third-party funds as well as its own products, and it will be a registered investment adviser, meaning that it will be able to receive an advisory fee for selling wrap accounts.

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