The Profitable Piece Corps

From La Paz to Luxembourg, the mutual fund has turned out to be as exportable a U.S. commodity as Coca-Cola or cowboy movies. And no firm sells mutuals with more vigor than Investors Overseas Services, a Panama-chartered, Switzerland-based company headed by U.S. expatriates that after five years has 20,000 clients in 62 countries. Since its organization in 1956 by Bernard Cornfeld, a pudgy onetime Philadelphia social worker and mutual-fund salesman, I.O.S. has doubled sales every year. This year I.O.S. expects to sell long-term mutual-fund shares and contracts worth $100 million. Profit last year, after taxes to Panama of only $300, was $234,000.

The I.O.S. success, says President Cornfeld, 35, rests partly on the fact that overseas "you're not the 19th fund salesman calling on a client." But it is also due to the doggedness of I.O.S.'s global salesmen. One flew into Portuguese Guinea to sell a prospective client, learned that his quarry was out in the bush, signed up four others before trekking into the bush after the first man. He bought. Another salesman lectured the Addis Ababa Rotary Club on mutuals, at meal's end had even the waiters trying to buy in. A salesman in Italy was less successful; Gangster Lucky Luciano died three days before their scheduled appointment.

Seeking Humor. I.O.S. offers a choice of 80 mutual funds. But the U.S.'s high-rated Dreyfus Fund, whose President Jack Dreyfus let Cornfeld handle his fund abroad to start I.O.S., accounts for 75% of sales. Last week I.O.S. launched a fund of its own, the so-called Fund of Funds, consisting of shares from half a dozen mutuals.

Cornfeld conceived what he calls his "piece corps" (for piece of industry) during a 1955 Paris vacation. Discovering that 3,500,000 Americans lived overseas, he set out to sell them, using a battered Chrysler convertible as a mobile office and concentrating at first on the G.I. trade. Flourishing, he moved to offices in Geneva, advertised in the Paris edition of the New York Herald Tribune for salesmen "with a sense of humor." Among those who hired on were a musician, a veterinarian, a helicopter pilot and an economics student. New salesmen are introduced to the business in five-day cram courses. Commissions range up to 6% of sales; last year's leader earned $82,000.

Branching Out. Today 70% of Cornfeld's customers are non-Americans. And business is no longer confined to mutuals.

One newborn subsidiary is International Life Insurance Co. ; Cornfeld's agents will push policies as well as funds.

Living high in Switzerland, Bachelor Cornfeld is hugely satisfied with his worldwide success. Meeting a former social-work classmate recently, Cornfeld was asked what kind of agency he had gone into. Said he: "A preventive agency.

We find our people before they're destitute, and do something about it."

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