As it readies for a massive pruning of its mutual fund family, Columbia Management Investment Advisers is promising a stronger, more affordable lineup.

The Boston firm, a unit of Ameriprise Financial Inc., has announced plans to consolidate 71 funds, which will leave it with a lineup of about 150 funds. The changes should save fund shareholders about $30 million a year, according to Chris Thompson, head of product management and marketing for Columbia Management.

"The overarching reason we can provide cost savings to shareholders is that we're passing on the economies of scale of a larger organization," he said.

The economies of scale include fee breakpoint discounts that will occur by creating bigger funds through mergers. The funds are also adopting a single clear fee structure that is more easily understandable for advisers, Thompson said.

The larger organization was created in the spring, when Ameriprise bought the long-term asset management business of Columbia Management Group LLC from Bank of America Corp.

Ameriprise, of Minneapolis, unveiled the transaction in September 2009, announcing that it would add $165 billion in funds and individual accounts to bring its total assets under management to nearly $380 billion. Ameriprise was already the parent company of RiverSource Investments.

The mutual fund lineups of the two complexes were broadly similar, meaning that leaders of the combined families were able to cherry pick the best funds in different categories, Thompson said.

"We were in the very envious position of being able to go through and really pick the best of the best," he said.

The RiverSource funds recently were renamed as Columbia funds, as were the Seligman funds, which had been a brand within Columbia.

The mergers are expected to be implemented in the first half of next year, subject to final approvals by fund boards and shareholders. Moving relatively swiftly to consolidate the RiverSource and Columbia lineups was important for the combined complex, said David Kathman, senior analyst at Morningstar Inc.

"Especially as a load shop that deals with intermediaries, they wanted to get the mergers out of the way," he said.

Thompson agreed: "When two firms come together, you want to move aggressively to provide clarity in the marketplace as far as what the product is going to look like."

The Columbia funds are sold through Ameriprise's network of advisers and through "all of the other intermediate channels" as well, Thompson said. As for the funds' performance, Kathman calls it "decent, not great."

"They've got bright spots in some areas and are so-so in some areas," he said.

One of its best performers is the Columbia CA Intermediate Muni Bond fund; Morningstar ranks it in the top 1% of such funds on a five-year basis. Columbia Global Value, on the other hand, places in the lowly 99th percentile among its peers.

For followers of the funds within this family, mergers are nothing new. The Columbia funds evolved through a series of mergers several years ago. And the Columbia Management lineup that was bought by Ameriprise was largely the result of the 2004 union of B of A — and its Nations Funds — with FleetBoston and its Columbia Funds.

That merger occurred when the fund companies were embroiled in the market-timing scandals of 2003 and 2004. The scandals and the efforts to settle with the authorities delayed the mergers and created "a big mess," Kathman said.

That combination necessitated a round of trimming that seems a smaller version of what's occurring now: Columbia eliminated about 30 funds through mergers and liquidations.

The current roster is slightly outperforming its peers: Through the end of August, their average return was 7.3%, compared with 7% for funds in the same categories.

One of the criteria used to eliminate funds was redundancy, but that does not mean that all overlap will disappear, Thompson said. The complex offers a number of strategies in the large-cap domestic-value arena, for example. Different funds in that space offer more of a yield bias, for example, or are more concentrated or more diverse, Thompson said.

Columbia Management touts itself as the eighth-largest long-term asset manager in the U.S., with $327 billion of assets under management at June 30, 2010.

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