Pioneer Group's bank sales business, launched in earnest four years ago to help balance the company's distribution, has quickly grown to respectability.
Now comes the hard part.
The Boston fund company wants each distribution channel-banks, wire houses, regional brokerages, insurance agents, and independent financial planners-to eventually account for about 20% of sales.
And though sales through banks are growing-they should account for as much as 10% of Pioneer's domestic fund sales this year, up from 7% a year earlier-so are sales through other channels.
"It makes getting a percentage sales goal in any one channel quite a challenge because it's such a moving target," said Barry G. Knight, who heads the company's bank sales division.
Pioneer declined to release sales figures for each channel, but overall net sales are growing fast.
Through the first three quarters they were $1.26 billion, about triple the year-earlier figure, the company said.
That is largely a testament to Pioneer's success in building a presence in banks and nonbank brokerages. A decade ago the company sold its funds only through insurance agencies and independent financial planners.
Mr. Knight's unit owes a lot of its growth to sales agreements signed this year with the likes of Amsouth Bancorp of Birmingham, Ala., Fleet in Boston, and BankAmerica Corp. of Charlotte, N.C. The latter now offers Pioneer funds to clients who have wrap accounts.
In all, it has active sales agreements with about 100 banks. Seven wholesalers handle those relationships, and if growth continues as planned, Pioneer would add two in the third quarter of 1999, Mr. Knight said.
He touted Pioneer's ability to cater to large banking companies, such as Fleet Financial Group, while remaining responsive enough to stand out among small ones such as Brenton Banks Inc. of Des Moines.
"They support our sales efforts very well," said Kevin Hansen, product manager and vice president at Brenton Investments, the bank's retail brokerage arm.
Mr. Hansen said Pioneer's wholesalers are accessible and responsive and the fund company keeps the bank well informed about products and sales strategies.
Maybe Pioneer should consider concentrating on big banks, said Kenneth Kehrer, a consultant in Princeton, N.J.
Getting just a fund or two on a big bank's "A" list can be extremely lucrative because of the sheer sales volume these institutions generate.
Winning over small banks is "great if they can do it," Mr. Kehrer said. "But the bottom line is that a small bank will produce much fewer sales than a big bank."