The mutual fund marketplace is growing ever more complicated as products and pricing options proliferate, and that bodes well for financial advice-givers, a noted fund guru says.

"You need a well-trained set of eyes to help you in these decisions," A. Michael Lipper, president of Lipper Analytical Services, Summit, N.J., said in a recent meeting with reporters.

"For many people, it's not the label on the fund that will be key (in choosing an investment), but who they talk to or what they read," he said.

Mr. Lipper's prediction should give heart to brokers, financial planners, and bankers who aim to earn fees by giving financial advice to investors.

Financial intermediaries have been worried about the boom in sales of no-fee mutual funds through channels such as Charles Schwab & Co.'s OneSource supermarket and Fidelity Investments' FundsNetwork. But Mr. Lipper maintained that these sales won't keep rising unabated.

"The direct, unaided retail growth has topped out," he said. Firms like Schwab "really need the adviser piece" to keep drawing new customers.

Asked to identify the most important business development in mutual funds during 1996, Mr. Lipper cited "the blurring of distribution channels and in the pricing of funds."

More than 9,700 mutual funds are now sold, up from 3,128 in 1990. At the same time, consumers are being offered more and more ways to pay for their mutual fund purchases - up front, upon redemption, or annually, to name just the most popular options.

Mr. Lipper also reviewed the fund industry's performance in 1996 and offered a forecast for the new year.

Topping his predictions: World equity funds will outperform domestic equity funds in 1997, reversing last year's results. In 1996, general domestic equity funds produced total returns of 19.47%, versus 12.76% for funds that invest abroad.

Mr. Lipper also said he expects mutual fund performance to return to historic norms - total annual returns of 10% to 12% - over the next few years.

"After two good years, it's very tough to have a third good one. It is possible, but the odds are against it," he said.

Some of the exuberance over stock mutual funds was already dying down in the waning months of 1996, Mr. Lipper noted.

Net cash flows into equity funds totaled $24.7 billion in the first five months of 1996, and $13.8 billion in the next five months. One reason for the decline, he said, was that a large number of corporate pension plans were converted from a defined-benefit structure into a defined-contribution structure. Mutual funds have been the investment of choice for defined contribution plans, such as 401(k)s.

Turning to his own company, Mr. Lipper said business is booming, particularly overseas. Lipper Analytical recently expanded its London office and is opening its first Asian office in Hong Kong.

"The growth in the number of funds overseas is even higher than here," he noted.

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