Scudder Kemper Investments Inc. has combined its bank and brokerage distribution channels into a single unit in response to consolidation in the financial services industry.
The new unit, called the broker-dealer division, is responsible for all fund sales through banks and brokers in the United States, the company said Monday.
Mike Harrington, a 14-year veteran of the company who was director of its cash products group, heads the new division.
Scudder decided to combine the two groups because the distinctions between banks and brokers are blurring, Mr. Harrington said. The new organization will let Scudder take better advantage of the larger distribution channels opening up as a result of mergers in the industry, he added.
The division will be responsible for about 65% of Scudder Kemper's U.S. fund sales, Mr. Harrington said, with 20% specifically through banks. Scudder is also revisiting its bank sales strategy, Mr. Harrington said, declining to elaborate.
Scudder sold $19.9 billion worth of funds through banks and brokers in 1999, up from $14.7 billion in 1997 but down from 1998, when it had sales of $27.4 billion through these channels, according to data from Lipper Inc.
Other units of Scudder Kemper - such as the insurance distribution unit - already combine bank and brokerage sales, he said.
Scudder is also revamping its overall domestic distribution system, said a spokeswoman for the company. A new unit, the U.S. retail distribution group, will be responsible for distributing retail products through all channels, she said.
The company's retirement products, insurance, and small-financial-adviser distribution network divisions are separate from the bank and brokerage distribution channel.
Retirement and insurance services are being kept separate because both tend to require somewhat more expertise and Scudder has a sales staff to handle these products.
Financial advisers require a different kind of attention than is given financial institutions with many branches and large sales forces, said Mr. Harrington. Because of advisers' relative independence, a wholesaler must take a different approach to selling funds through them.
Unlike advisers, banks and brokers have executives who can strongly influence what types of products are sold to retail investors, said Mr. Harrington.
The U.S. retail distribution group is to be led by Bill Glavin, who was chief operating officer for the company's U.S. mutual funds business. John Robinson, who headed the wire regional division, is to head up sales management for the new entity.
Gary Kocher, who led the financial institutions division, is to oversee national account management. Terry McBride has succeeded Mr. Harrington as director of the cash products business.