SAN FRANCISCO -- Wells Fargo Bank has come up with a simple and graphic way of informing its investment-products customers that mutual funds don't carry deposit insurance.

The lead bank of Wells Fargo & Co. recently incorporated into all its mutual fund marketing literature a universally recognized emblem: a bold circle with a diagonal slash across it.

In this case, the slash overlies the familiar Federal Deposit Insurance Corp. seal that promises "each deposit insured up to 100,000."

By putting a thick line through the FDIC's seal, Wells Fargo hopes to make it clear to customers that mutual funds carry a definite risk of loss.

A Primary Issue

Wells' innovation comes at a time when regulators are becoming more adamant about the need for banks to disclose investment risks to customers.

Federal regulators, including the FDIC, have made disclosure on the lack of deposit insurance a prime issue for banks wishing to sell mutual funds, annuities, and individual securities.

Banks could face a massive backlash if the market falls and customers can prove they didn't know products they bought from branch salespeople uninsured.

Other Offerings

Wells Fargo's marketing department devised the logo this spring as a way of stepping up disclosure to customers, a spokeswoman said. "We think it's important for our customers to know exactly what they're investing in."

Wells Fargo offers its Stagecoach Funds and other companies' investment products in 620 branches. It also manages the Overland Funds for institutional investors and the Wells Funds for 40 1 (k) plans. ,

The bank operates its retail sales program with support from Marketing One, which applauds use of the logo.

'Gets Message Across'

"I thought, 'What a great idea,"' said Sharon Pennell, director of regulatory and legislative affairs at the Portland, Ore.-based marketer. "It visually gets the message across."

An FDIC official said the agency has no problem with Wells Fargo using the stamped-out version of the FDIC logo, provided the bank doesn't use it as a stand-alone measure.

In addition to the logo, Wells Fargo's marketing materials include prominent written references to investment products' volatility and lack of deposit insurance.

The bank does have its detractors. Alvin Schechter, a corporate-identity consultant in New York, warned that the logo could backfire. Customers could see only the FDIC seal, not the slash, and think their investments are protected, Mr. Schechter said.

The slashed-through FDIC logo and several other disclaimers appear on large signs that sit on desks of the bank's 250 securities salespeople.

The emblem is on all documents that customers receive when opening investment product accounts and making purchases. Wells positions the graphic just to the side of spaces that customers must sign.

All prospectuses, or marketing documents, for the bank's 11 Stagecoach Funds contain the emblem.

Wells' creative use of the FDIC logo drew admiring nods from bankers who have been trying to come up with their own ways of stepping up disclosure.

"We don't want the message [that mutual funds lack FDIC insurance] to get lost in the maze of acknowledgements," said R. William Shauman, senior vice president in charge of investment products at First of America, Kalamazoo, Mich.

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