(January 22 – 18:10 ET) – An article in today’s Financial Times says that U.S. mutual fund giants are focusing on advisors.

The article points to the announcement that Fidelity Investments, Putnam Investments and Franklin Templeton Investments are partnering to create a dedicated Internet portal for advisors as evidence that U.S. fund giants are looking to advisors to keep their businesses rolling as mutual fund inflows decline. The Web site is expected allow advisors to view a consolidated statement of all of their clients’ mutual fund accounts drawn from multiple providers.

FT notes that this latest action from the traditional load companies follows a rash of recent initiatives from the no-load firms, such as T. Roew Price, Janus and Invesco, designed to curry favour with advisors.

“Financial planners and advisors have always been around, but as the economy slows, they are becoming far more prominent. Analysts said many retail mutual fund investors were growing more hesitant about making decisions themselves,” says the newspaper. “They have become wary of increased market choppiness or fear squandering a much larger portfolio than they had several years ago in the heyday of do-it-yourself investing. Hence, they are much more likely to consult an intermediary.”

Whitney Dow, an analyst at Financial Research Corp., said that his company believes the market share for no-load mutual funds will decrease dramatically over the next several years. The company estimates that the 40% share these funds had in 1990 will be eroded to 10% by 2005.

“They say ‘When it rains money, we put out buckets’. You want to have as many buckets as possible. The new Fidelity/Putnam/Franklin Templeton portal would seem to be yet another move in that direction, another blurring of traditional lines and borders between distribution channels,” said Mark Constant, asset manager analyst at Lehman Brothers.
-IE Staff