How does a fund firm get its products into brokerage companies' mutual-fund advisory programs? The Wall Street Journal's
Jaime Levy Pessin talks to gatekeepers from Charles Schwab and Wells Fargo on how they go about picking funds for their platforms.
Some takeaways for fundsters: Be prepared to articulate what has worked for you. Having a low asset base does not necessarily doom one's chances of landing on platforms. Consider recruiting a boldface PM.
"We're looking for a manager who can explain what has worked," Michael Iachini
, director of investment-manager research at Charles Schwab Corp.'s investment-advisory unit, tells the WSJ
. "Are you lucky or are you good? We're looking for managers who can convince us they're good."
A fund's size can also determine its chances of making it onto the platform. While brokerages
tend to shy away from funds that are too small, the WSJ
points out the opportunities
for smaller or newer funds. The pub notes that a small asset base can be preferable for small-cap funds.
The other gatekeeper quoted in the article is Ian MacEachern
, managing director for advisory and financial products at Wells Fargo Advisors. MacEachern tells the WSJ
that his firm is "always interested in new and creative solutions for our clients, [especially] if there's a budding market that hasn't been saturated with products." An example of that, he says, is the area of hedged mutual funds.
Another possible way to get in the door is by hiring a known PM: just ask the folks at Cornerstone Capital Management
Meanwhile, the article gives fundsters an idea of what it's like to be on the other side of the fence. Gatekeepers are "fielding five or 10 calls a week from mutual-fund companies pitching their products," Pessin wries.
Fund advisory accounts had $691 billion as of mid-2011, compared to $622 billion at the close of 2010, according to Cerulli data.
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