Wells Fargo & Co. is looking outside its newly expanded operation for fund sales growth.
The mutual fund group at the San Francisco bank is recruiting salespeople to target brokerage firms.
The addition of two wholesalers this week doubles the number of professionals calling on brokers, said Michael J. Hogan, senior vice president and managing director of the mutual funds group at Wells. Mr. Hogan said he hopes to have 10 wholesalers by July.
"We want to be a top 10 mutual fund company," he said in an interview here recently. "We can't get there exclusively through internal distribution."
Wells Fargo was bought by Norwest Corp. on Nov. 2, but the company kept the Wells name. The combined company plans to merge Wells' mutual fund family with Norwest's in September.
There are about $52 billion of assets under management in 43 Norwest Advantage funds and 42 Wells' Stagecoach funds. Fifteen to 20 redundant funds probably will be absorbed by the merger.
Norwest fund holders are primarily institutional investors, including 401(k) plans; Stagecoach fund holders are mostly private and retail clients, Mr. Hogan said.
The new company carries a torch first lit at Norwest: to double the amount of earnings contributed by investment management, brokerage services, trust, and insurance. At Norwest 14% of earnings in 1997 came from those business lines; a corresponding figure for Wells was not available.
That goal translates to mutual fund sales outside the banking company exceeding $1 billion "within a couple of years," Mr. Hogan said. Wells and Norwest each had internal sales of about $1 billion last year, he added.
Meanwhile, Wells is busy introducing customers from both sides of the merger to the Advantage and the Stagecoach funds. And it's paying off, Mr. Hogan said. He said he expects $100 million of new assets to flow into the Norwest Advantage Large Company Growth Fund by the end of February.
The fund's manager, John S. Dale of Peregrine Asset Management, an institutional asset management subsidiary of the old Norwest, has been promoting the portfolio to private clients from the original Wells franchise in the West.
Mr. Hogan said the immediate challenge-for internal or external sales-is to decide whether the merged fund family would leverage the bank name, as Chase Manhattan Corp. does, or follow the example of First Union Corp., which uses a different brand name for its funds.
Because many brokers already call wholesalers from the banking company by the "Wells" name instead of "Stagecoach," using the bank brand could work, he said.