The problem is that most fund companies don't understand the concept of brand marketing, said Jim Dettore, CEO of the Brand Institute. Fund companies want to offer a diverse product line that can provide every type of product for every type of investor, he said. As a result, many fund groups have "lost their core competency. They are too many things to too many people."

Instead, firms need to trim their product offerings to match what they want their brand names to be. The days of offering a one-size fits all product line is no longer realistic with shrinking assets and nervous investors, he said. "You will see an evolution of these companies taking their brand and moving it to the next level," he said. "You will see [firms] cutting back and promoting their overall mission."

As fund companies slowly develop branding strategies, they should look at creating a recognizable name considering one of three propositions: best product, best value or best service, he said. Firms need to create their branding strategies recognizing that they cannot stray too far from one of those three propositions.

For example, a company that offers terrific service capabilities and funds with higher than average expense ratios cannot develop its brand on value by cutting costs. "Regarding positioning, you have to be very careful," Dettore said. "You may lose your customer base and give competitors fuel to criticize that you're inexperienced in the market."

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