Switching a fund complex's offerings from no-load to load products may seem like it would generate a tremendous amount of cash--and, provided a company garners positive flows, it does. But Credit Suisse Asset Management, which said this month that it will add loads to all of its 28 funds by year-end, says much of that revenue is sapped by costs associated with competing in the adviser channels.

Credit Suisse will charge 5.75% loads for its equity funds and 4.75% for its fixed-income products, said Shiv Mehta, who oversees the firms' product management. The firm hasn't posted positive flows since 1999, when investors socked $624 million into its funds, according to Financial Research Corporation of Boston. That means that if the firm had been charging an average load of 5.25% during 1999, it would have generated more than $32 million in fees.

But Mehta estimates that nearly all of the income Credit Suisse will charge will be spent on revenue sharing, wholesaler compensation and marketing costs.

"The fact that you have a little more money in the front end doesn't mean you get to keep it," Mehta said. "You just have more money to spend."

As of Sept. 30, Credit Suisse posted outflows of $1.4 billion, which, if it spends about 5% of its revenue on expenses associated with the transition to loads, would suggest that the firm will take a severe financial hit as it transitions to all-load products in December.

Mehta says that's not the case. Credit Suisse's other investment products, such as fixed-income and alternative vehicles, are posting positive flows and earning enough revenue to offset the costs of competing in the independent rep space, he said. He did not provide specific numbers.

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