Even as banks spend millions of dollars to build their brand names, some are shelling out significant sums to give their mutual fund families an identity of their own.
First Union Corp. and Fleet Financial Group have recently begun aggressive advertising campaigns for their mutual funds. The aim: to make them more competitive with funds offered by Fidelity Investments and other industry leaders.
Though both banks are in the midst of larger campaigns to boost their corporate names, they are intent on building separate brands for their funds.
"When we look at our competitors, we look at the Putnams, the AIMs, the Franklins, and the Fidelitys," said Ruth Papazian, director of marketing communications for First Union's Evergreen Funds.
Evergreen, she said, "is a different brand from First Union."
To be sure, many banks, including Citicorp, J.P. Morgan & Co., and NationsBank Corp., are marketing their funds under names that evoke their bank holding company lineage. These institutions are seeking to leverage the brands they have built in banking when competing in the investments arena.
"We use the Citibank name because that is the brand the customers know," said a Citibank spokeswoman. Citicorp scrapped its funds' Landmark label in 1996 and now offers two families of portfolios: CitiFunds and CitiSelect.
But increasingly, banking companies are opting for a distinct identity for their funds, especially as they seek to sell more of them through unaffiliated broker-dealers.
"The broker at Merrill Lynch sitting across the street from a bank branch is not going to want to sell a bank-named mutual fund," said Robert L. Ash, a Fleet managing director. "The customer is going to say, 'I can go across the street and buy it there.'"
Boston-based Fleet is spending a reported $8 million to $10 million on a television and print campaign touting its $13 billion Galaxy Fund family. The campaign follows one kicked off last fall to promote the Fleet name for banking services through television commercials and ads in publications like The Village Voice in New York.
First Union, Charlotte, N.C., meanwhile, has been pitching its $54 billion-asset Evergreen Funds in an array of print media-at the same time that it has been promoting the First Union name in an extensive network television and print campaign. The banking company is spending $4 million on the Evergreen effort and may double its budget next year.
The ad campaign is designed to put Evergreen on an equal footing with the fund industry at large, said Paul Brown, an account executive at Publicis & Hal Riney, the San Francisco advertising agency handling the Evergreen and First Union accounts.
"Fidelity is such an institution, people say, 'Here's my money,'" said Mr. Brown. "We want Evergreen to be like that."
Richard Evans, president of Evans & Associates, a branding consultancy in Weston, Conn., said there are other reasons for moving away from a bank name.
Though banks have been managing and marketing funds for years, consumers are still likely to assume that funds are guaranteed if they carry a bank moniker, he said. And banks continue to have a "stodgy" image among some investors, he added.
Charles B. Wendel, president of Financial Institutions Consulting in New York, agreed that many investors do not see banks as savvy purveyors of investment products. As he sees it, a bank would do well to build its own name and use it as an umbrella for several distinct brands.
Banks, he said, "need to develop an endorsed brand, something that's more universal, off of which they can create spokes."
At First Union's Evergreen, Ms. Papazian said she is confident the fund group's branding campaign is already boosting sales. But Galaxy's Mr. Ash is more hesitant to label his fund group's campaign a success.
"Branding or advertising does not have an impact for two or three years," he said. Right now, sales of the Galaxy Funds are getting a boost from several other factors, including a concerted effort by Fleet to mine its customer base, he said.
But branding does help build market share "whether it's for cereal or mutual funds," Mr. Ash said. So Fleet will continue to advertise the Galaxy Funds, though it has no such plan for its Columbia Asset Management unit in Portland, Ore.