The landscape of the thrift advisory business changed markedly late last year when Mark. B. Cohen took his 21-member team of mutual thrift- conversion specialists to Sandler O'Neill & Partners.

Mr. Cohen, co-founder 10 years ago of the now defunct boutique firm Adams Cohen, of Great Neck, N.Y., said the marketing and investment muscle of Sandler O'Neill will enable his group to capture most of the hotly contested mutual conversion advisory market.

"While we were very successful at Adams Cohen in bringing institutions public, we never could find the right mix in terms of developing a more total approach to a thrift," the soft-spoken executive said. "Now with Sandler O'Neill, once we get a client, that client will have no reason to go anywhere else. That wasn't the case with Adams Cohen."

But despite Mr. Cohen's optimism, Sandler O'Neill could face tough going as it tries to dominate the firms vying for the loyalty of the more than 700 remaining mutually owned thrifts.

Competition from the likes of Charles Webb, a Columbus, Ohio, adviser that recently teamed up with the Arlington, Va., investment bank Friedman, Billings & Ramsey, could limit the team's profitability.

And a number of sources contacted by this newspaper complained that Mr. Cohen, after weeks of negotiating his own contract with Sandler last year, left his team little choice but to join him.

More than one source, suggesting there may be defections in store, quoted team members complaining that they were "treated like galley slaves."

Another said of the new Sandler O'Neill team, which works out of offices in Great Neck, N.Y., formerly occupied by Adams Cohen: "There aren't a lot of smiling faces out here."

This is disputed not only by Mr. Cohen, but by other top managers on his team. They say most of the backbiting is coming from Adams Cohen's former trading and corporate finance units, which were left out in the cold when the company folded.

Nobody forced people to Sandler, Mr. Cohen said.

Nonetheless, the attractiveness of Adams Cohen to the mutual industry - its no-nonsense, community approach to taking institutions public - could be diluted by its submersion into the more Wall Street-like Sandler.

Adams Cohen was founded in 1984 on the premise Wall Street firms did not have mutuals' best interest in mind, Mr. Cohen said. The thrifts appreciated Adams Cohen, which pioneered the community syndication that kept the subscriptions local.

Said one informed source, a former Adams Cohen insider: "My concern is there will be a temptation by Sandler O'Neill to abuse the new relationship by selling fixed-income products like mortgage-backed securities" to clients of the Adams Cohen team.

In fact, the new team already has lost one client because of the move.

Bell Federal Savings and Loan Association of Bellevue, Pa., a $410 million-asset thrift, had contracted Adams Cohen for a conversion, but upon learning of the Sandler O'Neill development, dropped the team. The thrift recently hired Ryan, Beck & Co. to convert the institution.

"Its nothing against Sandler O'Neill," said Albert H. Eckert, president and chief executive of Bell Federal. But he expressed concern that the people hired from Adams Cohen would not be the ones assigned by Sandler O'Neill.

He also worried that because Sandler is a partnership, it would not be accountable if losses occurred in the conversion or later.

Clearly, this view is hardly universal among former Adams Cohen clients. "The general consensus here is it is going to be mutual benefit to both the existing firm and the industry itself," said Walter Mullins, executive vice president of Roosevelt Savings Bank, Garden City, N.Y.

Mr. Cohen, who claims credit for inventing the conversion idea in 1975, calls Bell Federal an isolated exception. He also said his breakup with partner Mark Adams was amicable.

The two, who are rumored to have barely talked to each other last year during their breakup, have slightly differing accounts of the company's demise.

Mr. Cohen blamed the firm's inability to diversify beyond thrift conversions.

Mr. Cohen was identified with the conversion unit, while Mr. Adams was viewed as the force behind a failed diversification effort.

The company hired a corporate finance group from Rothschild Inc. in January last year, but apparently its efforts were not enough to save the firm.

The head of the short-lived trading group, Benedict Fiducia, negotiated at first with Mr. Cohen, and then by himself, in a failed attempt to bring the trading team to Sandler O'Neill.

For his part, Mr. Adams, Mr. Cohen's senior by more than a decade, blamed inherent changes in the thrift conversion business.

"The margins paid to investment bankers have been rapidly deteriorating," he said. Firms like Charles Webb and Sandler O'Neill have been underpricing the market, he said.

The typical margin fee is 2.5% the total subscription, he said, but Charles Webb on a recent deal bid 75 basis points.

While the larger firms can rely on their trading and investment services for revenue, essentially performing conversions for free in an effort to gain clients, Adams Cohen could not, he said.

Observers blamed this margin contraction for a purported decision by Merrill Lynch & Co. to leave the conversion business following a concerted effort last year to win clients. Merrill denies it is leaving the field, but has let go most members of its team.

The mutual thrift industry appears ready for a period of rapid consolidation, all observers agree.

A regulatory overhaul and falling thrift stock prices last year limited the number of conversions. But the market for the advisory service is expected to grow as companies' need for capital pushes them to convert to stock institutions.

"Mutuality is certainly not on the rise," said Mr. Cohen, who predicted only a handful of mutuals would remain within five years.

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