SunAmerica Corp., a Los Angeles-based firm that is known chiefly for its insurance prowess, is making a big push into banks as a marketer of mutual funds and annuities.

Under a new program that it has dubbed the Source, the company is mobilizing salespeople from its two broker-dealer units to sell investment products in financial institutions. The program is aimed at banks with $500 million or less in assets.

"We see more banks opening their doors to us as a way of offering mutual funds and annuities to customers," said Gary Krat, head of SunAmerica's broker-dealers, Royal Alliance Associates and SunAmerica Securities.

SunAmerica formally launched the bank-focused program last year and now counts 27 financial institutions as Source clients.

Deals in the Wings

Contracts are pending at nearly 20 other financial institutions, Mr. Krat said.

The Source traces its beginnings to a single broker, Clint Cogbill, operating out of a Royal Alliance affiliate.

Mr. Cogbill started an early version of the Source program after he lost a $100,000 account to a bank.

The experience "drove home the point that banks have built-in trust and credibility," Mr. Cogbill said. "I decided that's where I wanted to be."

Mr. Cogbill's efforts to put brokers and financial planners in banks did not go unnoticed by the home office.

"We liked the fact that he was able to go into various banks and sell them on the concept," Mr. Krat said. Mr. Cogbill was soon tapped to develop the Source as an alternative delivery channel for SunAmerica's brokers, who number more than 3,000.

Mr. Cogbill maintains that the development of a formal program with support from corporate headquarters has not placed pressure on Source brokers to push SunAmerica annuities and mutual funds over other companies' products.

In fact, "I think it's safe to say some of our banks don't use any of SunAmerica's products," Mr. Cogbill said.

That kind of independence helps build necessary credibility with banks, he said. Admittedly, "Some still look at us with a suspicious eye."

But that is happening less often, Mr. Cogbill maintains. "We're seeing more acceptance of our concept and its benefits for financial institutions."

Under a typical arrangement, a broker leases space from the bank and turns a percentage of his commissions over to it.

Level Playing Field

Commissions are earned on the sale of mutual funds, annuities, or individual securities. And, to keep a level playing field, SunAmerica brokers do not receive incentives to push the company's own products, Mr. Krat said.

Even so, Mr. Cogbill says SunAmerica's Polaris variable annuity has been particularly popular.

Polaris has 18 investment pools, ranging from guaranteed fixed returns to riskier equity funds.

SunAmerica has also tapped six institutional money managers from such firms as Goldman Sachs to oversee Polaris investment strategies.

The product "has the kind of variety that appeals to a broad swath of bank customers," Mr. Cogbill said.

SunAmerica also makes Polaris available through third-party marketing firms that cater specifically to financial institutions, such as Invest Financial Corp.

"We're trying to cover all bases," Mr. Krat said. "The bank market is that important to us."

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