Many fund companies are at a crossroads, according to Charles O'Neill, president, Diversified Management Resources. In order to keep costs down, many complexes that built out during the boom years of the 1990s are going to have to drop part of their business and concentrate more on specific areas, O'Neill said. "Fund companies are going to have to decide essentially whether they are product distributors or product manufacturers. That's what it comes down to," O'Neill said.

The general outlook for the mutual fund industry is not good at all, either. "I don't expect employment in the mutual fund area to be really strengthened for some time, [although] that's really dependent on the markets," O'Neill said. "Around year-end you're going to see the first of another wave, which will be the result of companies reevaluating their structures."

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