(August 1 – 08:55 ET) – A report from Merrill Lynch says that Investors Group is contemplating no-load funds and is looking to ramp up cross-selling within its sales force.
Merrill says that in the conference call to explain its recent results the firm indicated that it is looking at no-load funds as a way to combat its declining market share. “Specific details were not given,” Merrill reports, “but we would view the addition of no-load products to the mix as indicative of the need for the company to offer a full range of product to its sales
force. In the current marketplace, any weakness in product breadth has led to market share losses because a narrow product offering stands a lower chance of retaining assets as consumer choice shifts.”
Renowned active manager Altamira Management Ltd. made a similar bold move a couple of years ago when it lauched ultra-low fee index funds in an effort to broaden its product base and improve asset retention, an increasingly important ability for fund companies in the increasingly competitive fund business.
Investors Group also expects to have funds managed by Fidelity and Janus available by the end of August, and Merrill notes that Scudder Maxxum Co. has established a team of wholesalers to boost sales, too.
Merrill’s other big concern with Investors is the shrinking sales force. It reports, “Management suggested that they will refocus the sales force on penetrating its existing client base with the mortgage product through relationship pricing. This is likely to materialize in the form of extending rate discounts according to the strength of the client’s current relationship with Investors Group.”
-IE Staff