Berger Funds is taking a flier on the Web to reach the 401(k) market. The firm announced a deal to distribute 10 of its funds through GoldK -- a provider of Web-based 401(k) administration. The firm offers its product through intermediaries and private-label arrangements with financial services firms.

Berger is also in the final stages of negotiating a deal to add its funds to Emplanet's e401k platform, say sources familiar with the situation. Emplanet was founded by former executives from Fidelity Investments.

"The popularity of electronic 401(k) plans is rapidly increasing and we want to ensure that our products are offered in whatever financial arena our clients choose to do business with us," said Dave Mertens, Berger's senior vice president of Institutional Marketing.

Mertens added that both GoldK and Emplanet have credible management and will enable the fund firm to add distribution to the small retirement plan market. Berger Funds has no bundled defined contribution product of its own and instead partners with third-party platforms.

The deal should be a relatively low-risk one for Berger. Details of the agreement were not provided in the release. But in the past, GoldK officials have explained that fund firms pay a revenue share to GoldK if plan sponsors use them. That means that Berger would presumably be out nothing if GoldK does not place its product.

The daunting challenge facing GoldK and other e401k startups is to build scale in a time when the technological cost base of providing these services is expanding. The firm is partnering with regional broker-dealers and other distributors of financial services products to gather these clients. Yet success is far from assured.

Fidelity Investments, the originator of the e401k concept yesterday said that it has 1,250 clients for its product. That is an impressive figure for a new product, but not enough business to for an e401k only firm to stay on the technological cutting edge.

Berger Funds will offer 10 funds through the program, including Berger Growth Fund, Berger Large Cap Growth Fund, Berger Small Company Growth Fund, Berger Mid Cap Growth Fund, Berger New Generation Fund, Berger Select Fund, and Berger Mid Cap Value Fund. Berger Balanced Fund, Berger Information Technology Fund, and Berger International Fund.  

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