A strong defense is often the best offense when it comes to the competitive game of investment products.

New Jersey's Summit Bank has taken that philosophy to heart by concentrating on sales to existing bank customers, instead of soliciting outsiders.

"Right now, what we want to do is accommodate our existing customers," said Peter J. Boucher, vice president of Summit Financial Services Group, the bank's investment products arm.

Significant Fee Income

The strategy apparently is working. The bank, a unit of the $4.3 billion-asset Summit Ban-corp, not only is retaining customers but is gaining some significant fee income, executives say. In the first four months of this year, revenue from investment products hit $2 million, they say.

"We're happy with the revenue, but we're also happy that we can service our customers and keep them from going elsewhere with their business," Mr. Boucher said.

Summit, with more than 80 retail banking offices in 11 New Jersey counties, sells mutual funds and annuities through Essex Corp., an investment products marketer based in New York.

Fixed-income mutual funds account for about two-thirds of the bank's investment products business.

The top-selling funds come from the Putnam, Franklin, and Alliance families of funds.

Not 'Full Service'

The bank recently signed an agreement with Essex to offer individual securities to its customers, and also plans to offer new variable annuity and life insurance products.

But even with the new services, Mr. Boucher declined to characterize the brokerage as "full service." Instead, he said, it merely provides another set of services that keep his clientele happy and in the fold.

Mr. Boucher takes competition seriously, and for the moment, sees local brokers as the biggest threat.

"If we're losing customers, we're losing them to brokers," he said.

But this could change.

"In the long run, we'll be competing against the other banks in the area," he said.

The bank counts itself lucky to have emerged unscathed from the recent turmoil in the markets.

In addition to helping retain customers, the investment products program has attracted some new customers to Summit, said Jim Little, executive vice president of the bank's trust department.

Summit officials acknowledge, however, that the task of finding new business has become more difficult in the wake of the market tumble earlier this year.

"There are more people straddling the fence," Mr. Boucher said. "We need to work harder to help them make the decision."

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