is gearing up to serve an up-and-coming sales channel -- the Canadian bank branch network.
Aim Funds Management Inc. is trying to become a consultant to banks that want to leverage the retail channel for sales of individual third-party funds. Several Canadian banks already sell third-party funds in branches, but they do so primarily through asset-allocation products.
"I really do believe that banks understand the importance of this area and are just now determining how best to make this happen," said Dwayne Dreger, vice president of Aim's Canadian arm. Mr. Dreger, who was hired last month from the Toronto-based asset manager BPI Financial Corp., is to oversee a soon-to-be-hired team of wholesalers that will serve the bank branch channel.
The number of wholesalers hired depends on the reception the company receives, said Robert Hain, president and chief executive of Aim Funds Management. "We're just preparing ourselves because of an expectation that (banks will) go this route," he said.
Jeffrey R. Marsden, a consultant at Toronto-based Taddingstone Consulting Group, said more banks will start to give advice on third-party funds on an individual basis in order to offer a broader product menu. Observers said this has not yet happened in Canada on a national basis.
TD Bank Financial Group, however, has taken the lead in this area. In June it began training sales representatives in 58 branches in Vancouver, British Columbia, to give advice on the AGF Group of Funds and funds from Fidelity Investments Canada Ltd. on an individual basis, said Beth Grudzinski, vice president of national sales for the Toronto-based banking company.
TD Bank Financial plans to bring the program into its other 872 Canadian branches by early next year and is in talks with other mutual fund companies, Ms. Grudzinski said, though she declined to identify them.
Mr. Dreger said he has received positive feedback from early rounds of talks with Canadian banks. Nonetheless, he said, it will take time for the channel to develop -- partly because it raises compensation, training, and staffing issues at banks.
The Canadian mutual fund industry is a small but growing market, with $242.32 billion under management (in U.S. dollar value) at Sept. 30, according to the Investment Funds Institute of Canada. By contrast, the U.S. fund market stood at $5.976 trillion at Sept. 30, the Investment Company Institute reported.
Aim had $2.84 billion of Canadian assets under management at Sept. 30, ranking it 20th, the Canadian mutual fund trade group said.