Equipped with a new name, new share classes, and two new portfolios, Union Planters Corp.'s proprietary mutual fund family is about to go on sale to the public.

The Memphis banking company inherited the fund group, formerly called Magna Funds, when it bought Magna Group Inc., a St. Louis banking company, in July 1998. Renamed the Leader Funds last September, the family has until now only been sold through the bank's trust and institutional investments departments.

The decision to distribute the $750 million-asset Leader Funds more broadly came as part of a move to build up all Union Planters investment services, said Alan W. Kennebeck, the senior vice president in charge of retail services.

"Union Planters has a large retail distribution network," he said, which includes about 70 series 7-licensed brokers and about 1,500 series 6-licensed platform salespeople. About 80% of Union Planters' revenue is generated by packaged investment products, Mr. Kennebeck said.

Mr. Kennebeck, who joined Union Planters in February 2000 from Amcore Financial Inc. in Rockford, Ill., where he headed the investment division, said he would like to see the Leader Funds account for about a quarter of the company's fund sales.

Timothy S. Engelbrecht, a senior vice president at Union Planters and the Leader Funds product manager, said, "We've done a lot of reengineering of the fund family to make it more attractive and more saleable."

Last year Union Planters added a share class with a front-end load to the fund family and a sweep share class for the three money market portfolios, Mr. Engelbrecht said.

Union Planters is expected to add a balanced fund and a short-term bond fund to the current six portfolios today, and in the next few weeks the Leader Funds family will go on sale in Union Planters branches.

Licensed brokers in the branches are to start selling wrap products that include the Leader Funds by March. Later this year Leader Funds will be available for sale through PFIC Corp., Union Planters' Nashville-based third-party marketing subsidiary, and possibly through regional brokerages, Mr. Kennebeck said.

Bank brokers will be given sales goals for the proprietary funds, along with "some heavy-duty coaching," but no monetary incentives to sell them, Mr. Kennebeck added. He said he expects the wrap product to generate the most sales.

Mr. Engelbrecht said it will take time for the proprietary product to constitute one-quarter of the company's fund sales. In 1999, Union Planters sold about $380 million of mutual funds and annuities, and about $370 million in 2000, he said.

Most banks of any significant size have moved their proprietary mutual funds out of their trust departments and into the retail channel, said Geoffrey H. Bobroff, a mutual fund consultant in East Greenwich, R.I.

"More banks are coming to the conclusion that making money on the commercial side is not a growth area," he said. "Still, it's a puzzlement to see banks taking as long as they have to see that."

Proprietary mutual funds are a tough sell for almost all banks. But Union Planters' relatively small size and regional bent could work in its favor, Mr. Bobroff said. "A regional bank still has an identity in the community," he said.

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