T. Rowe Price, which is known for selling directly to investors, is making a stronger push to sell its portfolios through banks.
The Baltimore company manages about $39 billion of assets through financial intermediaries, but only about $5 billion of that comes from banks, said John Cammack, director of third-party distribution. That could change, however.
T. Rowe recently tacked on distribution fees to some of its funds, is offering two new funds to institutional clients, and plans to increase its eight-person intermediary sales force to 14 by early summer.
"We would like to do more business with banks," Mr. Cammack said.
T. Rowe Price, which managed about $180 billion of total assets through March 31, is among a growing number of fund companies trying to branch out through intermediaries. Janus Capital Corp. of Denver, for example, is adding distribution fees to some of its funds.
Because Janus' fund flows have been strong the past several months, other fund companies are eager to see how this move plays out.
Invesco Funds Group and American Century Investments Inc. have boosted their presence with intermediaries by offering level-load shares, in which investors incur no up-front sales charges, paying an annual asset-based fee instead.
"Fund groups are trying to figure out a different way to attract assets," said John Yeager, managing director at J.Z. Partners, a strategic consulting firm in Denver.
Brand strength, distribution, and performance will determine how well these efforts work, Mr. Yeager said. "Those are definitely the three keys, and I think you've got to at least have two of them - with performance being the one you have to have," he said.
T. Rowe Price this month began offering an advisor class for 10 of its funds, including its mid-cap growth, equity income, and high-yield portfolios.
The new share class carries 12B-1 fees and can charge up to 25 basis points for distribution costs.
The class is designed for broker-dealer wrap programs, 401(k) providers, and bank trust programs in states where revenue-sharing is allowed. Some brokerages will not include a company's products in their mutual fund wrap programs without such fees. Likewise, some 401(k) providers will not offer funds without the fees, Mr. Cammack said.
T. Rowe Price began offering two new funds on April 1 - a value portfolio and a small-cap stock fund - to institutional clients such as bank trust departments, Mr. Cammack said. In May it plans to unveil three Web sites - for bank trust departments, defined contribution providers, and broker-dealers.
The sites will include fund performance, portfolio management commentary, news releases, and institutional marketing materials, Mr. Cammack said.
