Because Glass-Steagall restrictions prohibit banks from managing and distributing their own mutual funds, banks must enter into partnerships with third-party providers.

Although such companies are very similar in the products and services they offer, there are strategic differences in the ways they do business.

Below are profiles of 10 third-party mutual fund marketers that provide retail brokerage services to banks. They are among the largest third-party providers, based on 1991 sales of mutual funds through client banks, as determined by American Brokerage Consultants, St. Petersburg, Fla.

Invest: Biggest,

Getting Bigger

In reaction to today's rock-bottom interest rates, bank customers are stampeding to mutual funds in search of higher yields.

"Consumers are no longer uneducated about mutual funds. They view the bank not only as a legitimate but a convenient place to buy mutual funds," said D. Mark Olson, president and chief executive of Invest Financial Corp., the nation's largest third-party provider of mutual funds through banks.

"There are a lot of banks that decided to get into the broker-dealer business of mutual funds in the 1980s and do it all themselves. When the dust settled, they generated anywhere from 10% to 17% on investments," said Mr. Olson. "That's not so hot when you consider that I can go in, take all the risk, and because of the economies of scale I have, give them 30% back right off the top."

Based in Tampa, Fla., the company does business in 41 states, with nearly 1,400 representatives, and 760 centers.

"These days banks are being forced to offer more than traditional banking services. You're not competitive unless you're able to offer your clients investment and insurance opportunities too," said Mr. Olson.

In 1988, Invest sold $735 million in mutual funds. Last year, the figure was $1.4 billion. This year, Mr. Olson expects to top $1.9 billion in sales. Invest's share of the commissions on sales varies according to the type of service provided for each bank.

Typically, for each dollar of revenue, 33% will cover administrative costs, such as compliance, due diligence, and accounting; another third goes to sales commissions.

The purchasing surge of mutual funds is not a fluke, said Mr. Olson. "People are going to continue to buy mutual funds in huge volumes," he said. "The assets are going to leave the CDs and other accounts. Bankers can either sit on the sidelines and have the assets and fee income go to someone else, or get in the game and at least salvage the fee income."

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