For a bank trying to promote its own mutual funds, sharing advertising space with a fund giant like Fidelity Investments might be considered a suicidal tactic.
But KeyCorp doesn't buy that.
Fidelity's name and logo appear alongside Key's in a recent advertising campaign to promote the Cleveland-based banking company's KeyMap asset allocation product.
"We benefit from being able to link our name with a company that is a leader in the fund industry," said David K. Konefal, senior vice president in charge of investment marketing.
Along with Key Investment Services, the ad prominently features Fidelity Advisor Funds, a line that Fidelity markets through intermediaries such as brokers and financial planners. It offers customers a "simple and easy" way to invest in funds from both companies.
Some banks are reluctant to even sell another company's funds, fearing the competition to their own products. But some experts say Key's strategy could work to its advantage.
"They are gaining credibility by association" with Fidelity, said A. Stewart Rose, a Boston-based consultant.
Indeed, Mr. Konefal said, "most banks have struggled to build the perception that we're competent and credible providers of investment products. It doesn't hurt to surround yourself with winners."
Fidelity is arguably the country's best-known fund company, commanding a 12.8% share of the mutual fund market and $379 billion under management.
Key, by contrast, manages $6.8 billion of mutual fund assets in its Victory Funds and Key Funds families. Its fund assets place it 17th among banks in the business.
Since January, Key has been pushing to raises awareness of its brand name. It hired Anthony Edwards, a star on the hit television show "E.R." for its "Key. For a new America" campaign.
Mr. Konefal said the bank was approached by Fidelity about adding the fund company's name to the ads.
Key had been looking for a way to promote KeyMap, which was made available in all its banking markets this past April. Fidelity was also trying raise the profile of its Advisor Funds, which are not as well known as the company's bread-and-butter, no-load funds.
With the help of Fidelity, the banking company developed a list of 50,000 households that bank with Key. Each received a direct mailing featuring the ad and information about the asset allocation product. Newspaper ads have also run, twice a week, in the Cleveland, Seattle, and Buffalo markets, Mr. Konefal said.
Key is following up with telephone calls to customers who received mailings. He said the company will decide soon whether to continue the ad campaign.
The KeyMap product invests assets in several Victory Fund and Fidelity Advisor portfolios, according to a customer's risk tolerance and financial objectives.
