Countrywide Credit Industries of Calabasas, Calif. has launched a new financial services unit just 12 months after selling its Countrywide Financial Services unit and the unit's proprietary 16-fund, $1.3 billion mutual fund family to a subsidiary of Western-Southern Insurance Co. of Cincinnati.

Countrywide Credit is a global diversified financial services company which has focused primarily on offering its retail and business customers mortgages, home equity loans, credit cards, insurance and banking services.

Now, instead of selling proprietary investment products, the new unit, named Countrywide Investment Services, will offer "best-of-breed" financial services including mutual funds, annuities and individual securities from third-party providers. All products will be offered as part of Countrywide's new initiative to provide financial planning and investment advice through a network of Series 7- and Series 63-licensed financial advisers that Countrywide is developing.

Six advisers have already been hired and two more are being sought, said Keith Pipes, who is the president and chief executive officer of the new division. Pipes, who joined Countrywide 11 months ago, was the co-founder, CFO and managing director of the 13 ill-fated Worldwide Index Funds managed by LMI Investment Advisors of Pasadena, Calif.

Last year, after amassing a scant $50 million in assets, the no-load fund group was liquidated. The fund group succumbed to a lack of distribution, said Pipes.

"It doesn't matter how great the business is if you can't get distribution," he said. The fund group included 11 single-country index funds and two "funds of funds" - one international and one European continent fund - which invested in the index funds.

Before that, Pipes had been with Sierra Advisors, the proprietary fund family of Great Western Financial Corp. of Chatsworth, Calif. for 15 years. Most recently, he was CFO. Sierra Advisors was purchased by and merged with the Washington Mutual funds group of Seattle in 1998.

The financial advisors will be placed

in Countrywide branches in southern California over the next 90 days, said Pipes. The advisory network will gradually be expanded to northern California, then elsewhere. Advisors are expected to be located in Countrywide's other existing branches in Texas, Florida and Colorado, he said.

While the advisors will be focused on gathering assets, they will have a broad financial planning mandate, Pipes said.

"We don't think customers are looking for a plethora of products," he said. "What they want is advice and guidance and information on how to invest." The advisers will be responsible for developing relationships with customers by suggesting top investment products.

At least initially, Countrywide intends to focus on offering its third-party financial products to its current 2.7 million customers, mostly through a direct mail advertising campaign that will include statement inserts and messages tucked into loan packages. The mail campaign will begin within the next few weeks, said Pipes.

Countrywide has hired National Financial Correspondent Services, the subsidiary of Fidelity Management & Research of Boston, to serve as its clearing agent. That gives Countrywide access to various mutual funds and securities that it can then offer to clients, said Pipes.

But Countrywide's new unit has also quietly been forging relationships of its own directly with five mutual fund families and three insurance companies through which it will offer fixed-annuity products, said Pipes. It has also signed agreements with five providers of variable annuity products. Pipes declined to name the companies with which it has formed partnerships. But, both load and no-load funds would be offered, he said.

The new Countrywide Investment Services is based in Rosemead, Calif. The original Countrywide Financial Services subsidiary which was based in Cincinnati, said Pipes.

In August 1999, Countrywide Credit announced it had agreed to sell the three lines of business of its Countrywide Financial Services subsidiary to a subsidiary of the Western-Southern Life Insurance Company.

Countrywide Investments, the adviser to the company's proprietary mutual fund family, and a unit of Countrywide Financial, was purchased by Fort Washington Investment Advisors, also of Cincinnati. The deal closed last October and more than doubled Western-Southern's mutual fund product offerings.

Earlier this year, the Countrywide Funds were merged into the Touchstone Mutual Funds, managed by Touchstone Advisors of Cincinnati, another Western-Southern investment management division.

The sale of Countrywide Financial also included Countrywide Fund Services which provided fund administration, accounting and transfer agency services to outside funds and CW Fund Distributors, which offered distribution and licensing services to small independent funds.

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