S&Ls devise new ways to serve the conservative saver

Many of the new products coming from the financial services industry are aimed at the younger upscale generation. These are the people, the marketing specialists say, who have more money to invest and are considered more likely to try alternative savings ideas.

What, then, does a bank, savings-and-loan, and broker do if they are located in an area where the passbook savings account is still considered the safest, surest way to preserve capital? Or where investors prefer blue chip stocks and conservative mutual funds to the generally risky new issues market?

One S&L that is finding out is First Southern Federal Savings and Loan Association, a $1 billion insitution in Mobile, Ala. On one hand, First Southern is making many of the moves other aggressive S&Ls and banks are trying lately, including setting up loan offices in other states and converting itself to a publicly held, federally chartered savings-and-loan association.

At the same time, says James H. Gambill, First Southern's chief operating officer, the S&L is trying to get its somewhat more conservative customers accustomed to the changing financial services business.

''Many of the people in the South,'' Mr. Gambill observes, ''are just trying to get things together financially. They're trying to save for their children's education, for their retirement.

''We have attracted people who are rate sensitive, but are very, very safety conscious. They tend to be middle-aged and older.''

Mr. Gambill and Robert S. Moore Jr., the S&L's chief financial officer, were in Boston recently to discuss First Southern's plans to go public with a group of security analysts.

As an example of First Southern's somewhat more conservative approach is its decision not to add a discount brokerage service, for now, at least. Several banks and S&Ls in the US, working through firms like Charles Schwab or INVEST, have installed systems that permit customers to come into branch offices and place buy and sell orders for securities.

''We have studied that idea,'' Mr. Gambill says, ''and our current thinking is that this is another service we could offer our customers. But we don't see it as a real moneymaker. It would be a defensive-type move because commercial banks want to get into it.''

This does not mean there aren't any investors among First Southern's customers.

''A lot of out people are both (savers and investors),'' Mr. Moore noted. ''They just aren't going to deed the farm or the home to go into the stock market.''

Many of the S&L's customers are having trouble dealing with the changes in the financial services industry, Mr. Gambill says. With insurance companies, banks, savings-and-loans, brokerages, and department stores adding new financial products, merging or joining into working partnerships, it will take some time for the public to sort it all out. ''I think they really are confused. There are so many alternatives, so many degrees of safety, conservatism, so many new players.''

It's a dilemma for the banking industry, too, Mr. Moore added. ''a dilemma of niches, trying to select the best niche for your customers, for your area.''

Finding and maintaining a comfortable niche, the S&L executives believe, will be one key to the small banks' survival in the future, particularly if interstate banking is approved by Congress and larger banks start taking over smaller ones. It will be the smaller institutions now operating in bigger markets that will be most vulnerable to takeover, they believe.

''We saw in the last recession that the small institution in the small town was more insulated than the small bank in a large town that had to operate with heavy local competition,'' Mr. Gambill said. ''Banks in ethnic neighborhoods and small towns will be able to survive on their own.''

With over 850 outlets around the country and a large established customer base, Sears Roebuck & Co., with its Dean Witter brokerage subsidiary, is expected to be one of the small bank's toughest competitors.