First Union Revs Up National Sales Campaign for Its Funds

Article excerpt

In the latest sign of its aggressive approach to the investments business, First Union Corp. has launched an ambitious campaign to sell more of its mutual funds.

The initiative, which started this month and will be stepped up later in the year, entails merging the banking company's two mutual fund families and getting outside brokers to sell them.

As it begins the effort, First Union continues with a massive build-up of its branch-based investment sales force, and awaits the arrival next month of a senior executive to oversee its capital markets group, which includes mutual funds.

"We have a prestigious, nationally recognized fund organization with an extremely impressive, long-term track record," said William R. Ennis, First Union, mutual funds director.

"We want to be able to use that to distribute nationwide," he added.

Mr. Ennis said the first part of the fund-sales push - getting First Union's 1,600 brokers and platform-based investment specialists to sell the Evergreen mutual funds that First Union acquired last year - is off to an auspicious start.

This effort, which commenced this month, has quadrupled sales of the Evergreen Funds so far over the sales pace of last year, he said. First Union obtained the Evergreen Funds when it acquired money manager Lieber & Co. for stock valued at $127 million.

Previously, the Evergreen Funds were a no-load family sold through a toll-free telephone line. To finance broker sales commissions, First Union this month started imposing front-end sales loads that mirror those on the company's other mutual fund group - the First Union Funds.

Another key part of the marketing push is the $8 million First Union has allocated this year to advertise its mutual funds in publications including The Wall Street Journal and Smart Money. This is substantially more than was spent last year, Mr. Ennis said, without being more specific.

Mr. Ennis said First Union aims to start trying later this year to get outside brokers to sell its funds.

If First Union succeeds, it would join an elite few of the 100 largest banks in the mutual fund business - including Chase Manhattan Corp., Wells Fargo & Co., and Great Western Financial Corp. - that tap outside brokers for retail sales, said Kurt Cerulli, principal of Cerulli Associates Inc., a Boston-based consultant.

Outside sales are a key to making retail mutual funds viable, Mr. Cerulli said. But such sales are notoriously difficult, since thousands of mutual funds are competing for brokers' attention. …