By Leonard Sloane N.Y. Times News Service Walk into many banks
or savings institutions these days and most likely there will be
experts on hand to offer mutual funds, annuities and other
investment or insurance products.
The traditional services, including checking and savings
accounts and certificates of deposit, are still there, of course,
but today about half of the nation's 1,600 savings and loan
associations and many banks, both large and small, are also selling
an array of securities and the like.
"There's a major movement in the industry now to market a broad
range of investment services," said James Shelton, executive
director of the Bank Securities Association, a trade organization
for banks based in San Francisco. "It is a natural distribution
Fred DeBussey, senior vice president of Fitch Investors
Service, a major rating agency, said: "People feel comfortable with
folks they know and a lot of people feel comfortable dealing with
banks. Nationwide, this is a trend that is going to grow all
through this decade."
Spurring this growth is the current low interest-rate
environment, which has forced six-month bank CD rates down to an
average of less than 4 percent. Many individuals who for a long
time became accustomed to high CD rates, which as recently as a
year ago averaged about 6 percent, are searching for alternative
investment possibilities with larger yields; among the choices are
common-stock mutual funds and long-term government bonds.
Retail bankers are seeking ways to provide these and other
options to keep their customers from taking their certificate of
deposit dollars to brokerage or mutual fund concerns, or to
"If they have to go elsewhere to buy an investment option,
maybe they will go elsewhere with their other business as well,"
said Anthony Ronda, a vice president of Apple Bank for Savings in
New York. "And then we might lose them as a customer."
Richard Davies, president of First Chicago Investment Corp., a
subsidiary of First Chicago Corp., said: "There's nothing we can't
Early in the 80s, investment products were a little sideline.
We really view this now as a key strategic product line."
As banks expand the range of their services and move more
aggressively into investments, and as regulators continue to
interpret the laws separating banking and securities more
liberally, consumers are becoming more accustomed to a separate
area in their branch devoted solely to these kinds of products.
Some banks have even developed their own group of proprietary
funds available only in their branches to sell along with the
nationally known funds from groups like Fidelity, Dreyfus and
In buying non-traditional products from banks, cost is rarely a