American Skandia, a leading underwriter of variable annuities, has launched a training program to help bank brokers do a better job of selling their products.

The Shelton, Conn.-based variable annuity company found in a recent survey that bank brokers sell one-third fewer variable annuities than traditional stock brokers, said Alan Blank, a national sales manager with American Skandia.

Mr. Blank added that only 20% of all bank brokers sell variable annuities. After a year of surveying bank brokers and annuity providers, "I came to the conclusion it's a matter of training," Mr. Blank said.

He and other industry experts suggest that the variable annuities are harder investments to sell than mutual funds and fixed annuities, which are popular offerings at banks.

Because the product has more wrinkles, such as penalties for early withdrawal, it takes longer to explain to a bank customer.

A vehicle for investors to build up tax-deferred savings for retirement income, a variable annuity is composed of mutual-fund-like accounts ranging from aggressive equity to fixed income.

To help brokers, American Skandia is offering its bank clients a seminar lasting 60 to 90 minutes that teaches brokers how to quickly identify appropriate customers and pitch the product.

The company is also offering videotapes and audio cassettes with paid actors who play the role of brokers and clients.

American Skandia, the sixth-largest seller of variable annuities, isn't charging for the training. But Mr. Blank said banks or the marketing companies that promote annuities to banks, won't get access to the training if they don't guarantee his company a spot on their lists of preferred annuities providers.

Bankers are asking companies to help train their brokers, Mr. Blank said.

"We had a bank call us and say, we don't want to use your product but can you sell us the training?" Mr. Blank said.

Over the last six months, variable annuity sales at banks dropped 35% from the same period in 1994, according to Kenneth Kehrer, a consultant in Princeton, N.J. He added that in 1994, banks sold $1 of variable annuities for every $6 of fixed annuities.

Mr. Kehrer said bank customers tend to be first-time mutual fund buyers, so they aren't sophisticated enough to jump into the complex world of variable annuities.

Mr. Kehrer adds, however, that banks want to sell variable annuities because the commissions are generally higher than those on mutual funds.

Also, the penalties for early withdrawal compel a customer to keep assets in variable annuities longer, so the bank keeps making commissions over a longer period.

Some bankers said training programs aren't much more than sales gimmicks for the annuity companies, and aren't the real answer to boosting variable annuity sales.

"I don't think it's a more difficult sale than a mutual fund. It's only a mutual fund with a tax-deferral feature," said J. Edward Diamond, president of Dime Securities Inc., the brokerage subsidiary of Dime Savings Bank of New York.

Mr. Diamond said sales of variable annuities at Dime were flat for the first six months but are picking up. They make up 10% of the company's sales of investment products, more than most other banks, he said.

He said variable annuity sales are higher at his bank because, unlike most banks, it emphasizes equity-based investments instead of those intended to generate fixed income.

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