Franklin Resources Inc. is introducing a new retirement planning service and has appointed the executive who ran its bank sales division to sell it.
The new 401(k) service is expected to sell much better than the mutual fund company's old 401(k) service because it will employ more modern technology and will get more marketing support.
"There hadn't been a lot of focus" on the old 401(k) service, acknowledged Kent Strazza, who was promoted last month to national sales manager for retirement plans from head of bank sales.
One key feature of the new service is the ability to calculate the value of employee retirement accounts each day. This capability is becoming standard in the 401(k) business, but it is also a capability that Franklin currently lacks.
"You really need daily valuation to compete," Mr. Strazza said in a telephone interview.
Franklin's new 401(k) offering will include back-office record keeping and accounting as well as investments. It is scheduled to be ready by summer. In the meantime, the company is recruiting two specialists in the 401(k) field to help Franklin's salespeople make presentations about the retirement savings products.
"We expect to see a lot of volume because we have 40 brokers out there with tremendous client relationships," Mr. Strazza said.
Currently these brokers act as "wholesalers" who get brokerage firms and banks to sell Franklin's mutual funds and other products to retail investors. They will also be assigned to persuade banks and brokerage firms to sell Franklin's 401(k) service to small, midsize, and large companies.
Franklin, based in San Mateo, Calif., was the second-biggest seller of mutual funds through banks last year, according to a study by the Boston consulting group Cerulli Associates. But it is a latecomer in developing a modern, full-featured 401(k) product. Mr. Strazza said that doesn't discourage him.
Franklin will focus on "the takeover market," Mr. Strazza said, meaning that it will try to pick up clients from companies that are unhappy with their current 401(k) plan.
Industry analysts said that if anyone can break into the 401(k) market late and win market share, Franklin can.
"I would consider them a credible competitor," said Kurt Cerulli, principal of Cerulli Associates.
"Franklin has very strong distribution and an extremely attractive product line, with both the Franklin and Templeton funds," he said.
Franklin's Templeton funds, which are noted for the strong stable of international portfolios, should be especially attractive to corporate sponsors of 401(k) plans.