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CONSUMER KNOWLEDGE GAP EXISTS REGARDING GROWTH OF INVESTMENT PRODUCTS AT BANKS

 BOSTON, Jan. 19 /PRNewswire/ -- Lagging consumer awareness of the burgeoning growth at banks around the country of diverse investment products such as mutual funds, insurance and annuities, has created a significant marketing challenge to banks, according to the results of a new national study conducted for Liberty Financial Companies and released today.
 "Consumers are just beginning to become aware of the massive change that has taken place within the banking industry," said Kenneth R. Leibler, president and chief operating officer of Liberty Financial Companies. "Conservative estimates indicate that banks now control 11 percent of mutual fund assets under management or, $156 billion. That represents an increase from 5 percent of all mutual fund assets in just over the past five years. The results of the new study indicate that consumers, for the most part, do not yet fully realize the significance of this major development in the banking industry."
 The survey of middle income and affluent consumers entitled Upscale Consumer Views of Banks as Sources of Non-Traditional Products, was sponsored by Liberty Financial companies, a diversified financial services organization based in Boston, and conducted by Research & Forecasts Inc., a New York public opinion survey research firm. The findings are based on a nationwide telephone survey of 250 randomly selected upscale consumers with $50,000 to $200,000 in total 1991 household income. The interviews took place between Aug. 31 and Sept. 14, 1992, and the margin of error for the total sample is +/-6 percent.
 The study findings indicate that 86 percent of respondents already have relationships with banks, representing a potentially large market for the investment products offered by banks. Yet, many middle income and affluent consumers are not yet fully aware that banks offer particular strengths in the sale of investment products. Respondents who see banks as resources for investment products rate those strengths as convenience (17 percent), a sense that banks are safe and trustworthy (12 percent), and the fact that some consumers already feel they have a close relationship with a banker (11 percent). They also cite a variety of factors such as lower or no commissions, better service, and more knowledgeable people. However, 57 percent are either unsure of the advantages or see no advantages in dealing with banks.
 The most important criteria in choosing an institution from which to buy investments, according to the study, are knowledgable salespeople (90 percent), low risk/insured safety (88 percent), offering tax exempt investment (84 percent), low commissions (82 percent), previous experience with the selling organization (78 percent) and offering a wide variety of products (67 percent).
 "Apparently, many consumers are slow to recognize the benefits of buying investments from banks. They may not be aware that banks can provide as much experience as other institutions, particularly when they establish partnerships with professionals in third party organizations who have proven expertise in the field," said Leibler.
 "The findings of this study further support an earlier study we conducted in which banks themselves viewed non-traditional products, such as mutual funds, to be the wave of the future for the industry's profitability," said Ronald S. Robbins, president of Liberty Financial Bank Group. "It is interesting to note that consumers seem unaware that banks can now provide the same investment products and services available through other sources."
 In terms of offering the best investment advice, the study found that banks are rated virtually even with mutual fund companies (17 percent banks vs. 19 percent mutual fund companies) and better than insurance companies (17 percent banks vs. 6 percent insurance companies). However, in this area, banks are rated behind brokerage houses (17 percent banks vs. 28 percent brokerage houses).
 According to the previous survey conducted for Liberty Financial Companies, Non-Traditional Products: The Wave of the Future, released October 1992, banks are gaining investment and insurance customers from among their own customer base -- the median percentage of bank investment/insurance customers who are existing customers of the bank is 80 percent.
 "Clearly, there is a confluence of consumer interests and bank industry strengths in terms of the consumer's desire for and banking industry's ability to provide quality investment products and services," added Robbins. "As consumer awareness of these benefits increases, and the number of banks entering this area of business also increases, we will see both the banking industry and consumer reap the benefits."
 Liberty Financial Companies is a widely diversified financial services organization with over $30 billion in assets under management. The Liberty Financial Bank Group, with more than $1 billion in annual product sales, is a leading full-service marketer and distributor of investment and insurance products to banking institutions across the U.S. Other Liberty Financial operating companies include: Stein Roe & Farnham Incorporated; Keyport Life Insurance Co.; Liberty Asset Management Co. and Liberty Financial Real Estate Group.
 -0- 1/19/93
 /CONTACT: William Rice of Liberty Financial, 617-722-0897; David Fridling of Ruder Finn, 212-593-6321, for Liberty Mutual/


CO: Liberty Financial Companies ST: Massachusetts IN: FIN SU:

CH -- NE021 -- 6533 01/19/93 16:15 EST
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Date:Jan 19, 1993
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