Signaling a new era of cooperation between banks and big brokerages, Smith Barney Inc. is considering selling its mutual funds through banks.

Such a move would put the nation's second-largest brokerage among the first Wall Street firms to pitch its proprietary mutual funds through banks. Smith Barney and other big retail brokerages have long avoided selling their products at banks for fear of angering their own sales forces.

But Jessica Bibliowicz, the executive vice president who oversees Smith Barney's $70 billion mutual fund complex, said she is eager to cash in on the close relationships banks enjoy with their retail customers. Big mutual fund companies, including Fidelity Investments and Putnam Investments, have been successfully gathering assets from bank customers for years.

"Any channels are appealing where money is today," Ms. Bibliowicz said in an interview after a Smith Barney press briefing.

Ms. Bibliowicz said no definite plan has been made to sell Smith Barney's funds through banks. She said she would have more to say on the matter in February or March.

Meanwhile, Smith Barney is likely to get a chilly reception at some banks, which view the brokerage behemoths as direct competitors of their brokerage programs. In 1994, Dean Witter Financial had to scrap an attempt to sell its investment products through NationsBank Corp. due to cultural rifts. The brokerage is now piloting a similar effort with Banc One Corp.

Smith Barney, for its part, boasts $420 billion of assets; it pushes financial products through 11,000 brokers in 500 offices nationwide.

"My gut reaction is that they will have a bit of uphill sledding," said Timothy J. Leach, president of U.S. Bancorp's Qualivest Capital Management. "It may be difficult for a bank to see their way clear to use a Smith Barney product when Smith Barney brokers are actively calling on their customers."

By the same token, Smith Barney, along with Wall Street giants like Merrill Lynch & Co. and Prudential Securities Inc., has long been wary of pitting its brokers against those employed by banks.

Burton J. Greenwald, a Philadelphia-based mutual fund consultant, said research suggests that nonbank and bank brokerages are "not mutually exclusive." Still, he predicted that veteran Smith Barney brokers would be alarmed if the firm were to align itself with banks.

But if anybody in the brokerage industry could make such an uneasy alliance work, it would be Ms. Bibliowicz, observers said. "I think Jessica Bibliowicz is very creative," Mr. Greenwald said.

The daughter of Sanford Weill, who is chairman of Smith Barney's parent, Travelers Group, Ms. Bibliowicz showed herself to be an iconoclast last year when she made the company's proprietary funds "portable," meaning clients could carry the funds with them when they switched brokerage firms.

And she has said many times that her firm needs to compete as a traditional mutual fund company if it is to succeed.

Banks, for their part, have been more inclined toward doing business with the very fund companies that Ms. Bibliowicz is striving to emulate. Companies like Fidelity and Putnam focus on bank distribution without acting as competitors, Mr. Leach said.

Still, he acknowledged, even players like Putnam make their funds available through other, nonbank broker-dealers.

Some observers speculated that, in addition to pushing its portfolios through banks, Smith Barney may look to help banks run their mutual fund sales programs. Discount brokerage giant Charles Schwab & Co., for instance, recently began offering access to its popular mutual fund supermarket through bank branches.

Teaming up with Smith Barney "could be an avenue that might present some interesting opportunities," Mr. Leach said, including offering banks access to an array of sophisticated products and services.

Smith Barney would be an attractive partner to small and midsize banks because it would inject an aggressive sales culture into the bank environment, Mr. Greenwald said. "Banks wouldn't even be thinking of (these alliances) now if they had developed the sales culture that the brokerages have."

Even banks like First Union Corp. and NationsBank Corp. - which are both looking to get more brokerages to carry their proprietary funds - have yet to succeed in building a strong sales environment, Mr. Greenwald added.

"Clearly, the development of a sales culture within a banking organization takes a long, long time," he said.

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