Calvert Group, a small Maryland mutual fund firm, has reorganized its sales staff along distribution channels - and banks aren't included.
Many fund companies have distribution arms dedicated specifically to banks, and even small companies new to banks are flooding bank brokerage operations with sales representatives.
But Calvert, which manages $4.1 billion in assets, doesn't think it's worth fighting against behemoths like Putnam Investments and Franklin Resources that target banks.
Banks contribute a paltry $350 million, or 8.5%, to the Bethesda, Md. - based company's assets, he said.
"We're a very small company with very limited resources. We have to be selective," said Steven Schueth, president of Calvert Distributors Inc.
Calvert's new strategy is to develop stronger relationships with the top-producing brokers at regional and large brokerage firms and independent financial planning companies.
Because the fund company has a niche - municipal bond funds and stock funds that invest in "socially and environmentally responsible" companies - it has been more successful with brokers who promote a diversified portfolio of funds to clients, Mr. Schueth said.
"We find that bank broker-dealers tend to be less like financial planning firms than wirehouses," he said.
The way Calvert used to approach brokers was inefficient, said David Leach, vice president institutional markets group, who oversees sales to bank trust departments and their cash management services.
The fund company had eight salespeople focusing on setting up seminar programs at one time with several brokers to push the company's various portfolios. It also had a support staff of 16 in-house who merely took telephone calls from brokers at all distribution channels.
"You generally don't reach the top brokers at these meetings," Mr. Leach said. "You get people there for just the free lunch."
But Calvert is not giving up on the bank distribution channel. More than 100 banks sell the company's funds by virtue of relationships with broker- dealers supplying banks with representatives.
Mr. Leach added that he has been assigned to promote Calvert as a company that can sub-advise municipal bond funds that banks manage.
"I won't stand here and tell you we're not going to focus on banks in the future, but it's not one of the three channels we will focus on now," Mr. Schueth said.
