Magazine article American Banker

Edgy Bank Brokers Working to Soothe Rattled Customers

Magazine article American Banker

Edgy Bank Brokers Working to Soothe Rattled Customers

Article excerpt

Last week's volatile stock market has made bank brokerage chiefs antsy, and several have acted to calm investors so they won't pull their money out of mutual funds and other investments.

Some brokerage executives are telling salespeople to make reassuring phone calls to nervous customers - and not to recommend risky stocks and aggressive stock funds.

"I think anyone with half a clue has been very edgy for many months now" about the stock market, said Edward Diamond, president of the brokerage at Dime Savings Bank of New York.

Some brokerage chiefs complained that the market had started to look shaky just as they were racking up record sales.

Mutual fund investors continued to pour money into stock portfolios in March, particularly last-minute deposits into tax-deferred retirement plans, according to the Investment Company Institute.

The Washington trade group for mutual fund companies estimated that net cash flow into stock funds was $21 billion last month, down from $21.9 billion in February but the third-largest inflow ever.

Responding to recent market swings, Dime's Mr. Diamond has begun confining his brokers' stock selections to blue chips like Wal-Mart Stores and J.P. Morgan & Co. Dime is sticking with its bread-and-butter mutual funds, which invest in growth and income stocks.

For investors seeking more aggressive funds, Mr. Diamond's sales force is recommending portfolios that invest in value stocks as opposed to growth stocks. …

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