American Express Co. has allied itself with FleetBoston Financial Corp., its second major partnership in the area of investment products in a week.

The agreement between the Boston banking company and American Express Financial Corp., the Minneapolis financial services unit of the New York credit card giant, went into effect last week. It is both companies' latest step to build assets under management through distribution alliances.

American Express announced a similar development and distribution relationship with Wells Fargo & Co. last week and may seek others like it, said Randy Gabrielson, senior vice president of third-party distribution at Amex.

"Ultimately what it does for us is provide a much more competitive product for the consumer than we could provide on our own," Mr. Gabrielson said.

The deal will put Fleet's proprietary mutual funds in variable annuities underwritten by American Express. The companies might also collaborate on multimanager funds and wrap products and eventually extend the agreement to credit cards and other banking services, said Robert L. Ash, chief executive of FleetBoston's mutual funds arm.

The Amex agreement is also the latest in a series for FleetBoston, which has struck similar deals with Amsterdam-based ING Group, Liberty Financial Cos. in Boston, and United Overseas Bank Group of Singapore. Mr. Ash said that FleetBoston will announce another agreement with a U.S. financial services company as soon as next week and is looking for more partners overseas.

Dennis Gallant, a consultant at Cerulli Associates of Boston, said, "This may be a new era for proprietary products" as a growing number of asset managers enter distribution and product development alliances.

"There are a lot of proprietary shops looking for external distribution, and the fastest way to do it is a joint venture," Mr. Gallant said. "If you're only selling to a captive sales force, there's a ceiling as far as how much you can sell. With assets declining, firms are looking elsewhere."

The alliance gives Fleet access to 11,000 financial advisors, augmenting a 2,000-strong sales force spread among various subsidiaries.

Joint product development helps cement alliances, and might also overcome salespeople's skepticism about the performance of another firm's proprietary fund, Mr. Gallant said.

With the proliferation of packaged investment products, distribution is one area in which investment management companies can still carve out an advantage, FleetBoston's Mr. Ash said.

"Fixed annuities, variable annuities, and mutual funds have really become a commoditized industry in product and asset management capacity," he said.

FleetBoston has more than $100 billion of assets under management, while Amex manages $262 billion of assets.

Of course, distribution alone does not guarantee sales.

Neither Amex nor Fleet is known for "shoot-the-lights-out performance" in their fund groups, said Geoffrey H. Bobroff, a mutual fund consultant in East Greenwich, R.I. Joint distribution alliances often disintegrate when they fail to result in increased assets, he said.

But Rich Joseph, FleetBoston's managing director in charge of product distribution and development, said the strategy goes beyond distribution.

"The real strength of the partnership is joint product development and also assistance in selling products," he said.

The agreement involves "aggressively" marketing each other's funds. But alliances between Amex and other banking companies will not dilute the value of FleetBoston's deal, Mr. Joseph said.

"Given the size of Amex in distribution power, they can have [several] distribution partners as long as they're not originating and delivering the same product," he said.

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