Franklin Templeton Group is retooling its in-house sales force.
The San Mateo, Calif., mutual fund company plans to hire at least two in-house wholesalers for every field wholesaler, said H.G. Mumford Jr., sales director of the financial institutions division. The current ratio is about 1 to 1, he said.
Franklin has 68 wholesalers in the field and at least 60 in-house.
The hiring strategy should be complete in three to six months and will span all channels, including the bank division, which has 19 field wholesalers and 19 in-house ones, Mr. Mumford said.
The move could give the $159.8 billion-asset firm a jump on the competition. Competitors such as AIM Management Group of Houston and OppenheimerFunds Inc. of New York operate with an in-house wholesaler for every field one in most territories. And Massachusetts Financial Services of Boston plans to have a 1-to-1 ratio by the end of the year, a spokesman said.
Franklin Templeton has also redefined the job description for in-house wholesalers, requiring them to pitch sales ideas to brokers and scout out other ways to drum up business. Previously, they performed mainly support tasks, such as scheduling appointments for field wholesalers and sending information to brokers.
The company is taking the in-house wholesalers out of the "lick, stick, and staple business" and trying to make them more proactive, Mr. Mumford said, which is in line with what some competitors are doing.
Geoffrey Bobroff, a mutual fund consultant in East Greenwich, R.I., said internal wholesalers have become more important in recent years and that Franklin Templeton has been criticized for its lack of coverage. "They're trying to show that they're building a more robust internal wholesaling capability," Mr. Bobroff said.
Franklin Templeton's initiatives come as the fund company is trying to recover from sales fallout because of performance of its value funds. It sold $4 billion of mutual funds through banks last year, and Mr. Mumford said he expected this year's sales to be off roughly 20%.
Though performance of the funds has picked up, it "takes a while for that message to get out," he said. For example, last year its Mutual Shares Fund class A returned 0.01% and ranked 345th out of 403 funds, according to Lipper Inc. of Summit, N.J. By contrast, the fund returned 6.14% through Sept. 30, 1999, ranking 53d out of 497, Lipper said.
Separately, Franklin Templeton's banking division plans to hire another field wholesaler by yearend, bringing its total to 20. It has also added a key account manager to focus on the company's top 28 banking clients.
The company may add a fourth key account manager in 2000, Mr. Mumford said. In addition, it has cut the size of its territories, as several fund companies are doing, to improve wholesaler coverage.
John Bellingham, vice president and sales manager of brokerage at Jersey City's Provident Savings Bank, called Franklin Templeton's plans "a step in the right direction." He said brokers at Provident Investment Services Inc. mostly sell funds from AIM and American Funds Group of Los Angeles, primarily because they are familiar with them. If Franklin Templeton has a story, it "better get it out there," he said.