Responding to criticism that it isn't committed to marketing its funds through banks, Fidelity Investments has set up a Bank Services Group.
The nation's largest mutual fund company named executive vice president Michael Kellogg, a former bank trust department director at Colorado National Bank, to oversee the new division. The 37-year-old Mr. Kellogg joined Fidelity's institutional services unit last year.
"The formation of the Bank Services Group is our acknowledgement that we need greater customer focus on the banks," Mr. Kellogg said.
With the reorganization, Fidelity will have nearly 200 sales representatives, telemarketers, and other internal staff devoted solely to supporting banks.
The moves come in the wake of a larger reshuffling within Fidelity on Monday, which included the reassignment of Paul J. Hondros, formerly president of Fidelity Investments Institutional Services Co., to head the retail investments group.
Mr. Hondros' new job prompted a reorganization of his former unit, which includes the team of executives that market to banks.
Despite large sales through banks, many financial institutions have recently complained that there have been so many management changes, they don't know who is in charge or how important they are to Fidelity.
But Mr. Kellogg, as well as some bankers, said the most recent changes should defuse those charges.
"If it's more focused and brings more resources to the bank channel, I think it's a positive," said Jack Kopnisky, president of the brokerage at KeyCorp, Cleveland.
In his new role, Mr. Kellogg also will oversee sales to financial planners, who will have their own set of sales representatives. Previously, the company had executives who developed relationships with bank clients, but shared sales staff with other distribution channels.
The latest reorganization tinkered with other parts of the institutional services company. Fidelity named executive vice president William O'Grady head of sales to stockbrokers and insurance companies. Previously, Mr. O'Grady oversaw the sales forces of all distribution channels.
Mr. O'Grady joined Fidelity in 1994 to head its bank marketing efforts.
Fidelity's recent management changes baffled observers, who said the company's chairman Edward C. Johnson 3d has long been fixated on revamping units.
This preoccupation has been more acute recently, these observers said, as Fidelity struggles with an outflow of portfolio managers, and bad publicity stemming from poor performance in its flagship Magellan Fund.
"The wonders that go on in Ned Johnson's mind are his and his alone," said Louis Harvey, president of Dalbar Inc., a Boston-based company that performs industry research for mutual fund companies.
Indeed, Mr. Kellogg's career at Fidelity symbolizes the typical pinball movements of executives there.
He was hired in July of 1995 as a senior vice president, responsible for marketing to large bank trust departments. Six months later, he was promoted and asked to develop products for all distribution channels. Now he's back focusing on banks.
Some observers don't put much stock in Fidelity's management moves. "Every time you move a piece on the checkerboard, a hole develops," said Burton Greenwald, a mutual fund consultant in Philadelphia. "I don't read too much into it."
