ING U.S. Financial Services wants to make its newly consolidated mutual fund family a household name - and boost its sales by more than 25% this year.
The unit of the Amsterdam financial conglomerate ING Group has spent the past several months integrating the sales and back-office systems of its two retail fund families, Aetna and Pilgrim. On Friday the company combined the families under the new name ING Funds.
The two families had a combined $35 billion of assets under management as of yearend, including $17.6 billion in retail mutual funds and $17.4 billion in variable annuity subaccounts.
Meanwhile, Bob Bouleware, the president of ING Funds Distributors Inc. in Scottsdale, Ariz., said ING has launched a major television advertising campaign.
The ads, which aired during last week's Grammy Awards and will be broadcast on other prominent shows, are meant to make consumers more generally aware of ING, so that broker-dealers will not have to explain what the company does when selling its fund products, he said.
ING expects the heightened brand awareness to produce a 27% increase in mutual fund sales this year, Bouleware said.
The brand merger combined two families with different investing philosophies that generally target different audiences: Aetna, best known for its retirement funds, and Pilgrim, whose funds are aimed mainly at the retail market.
The former Aetna retail funds deal mostly in index-based products, while the former Pilgrim funds are more actively managed.
Bouleware said ING had no qualms about combining the families under a single brand name. Tests of the brand by outside consultants got positive reactions from potential investors, he said.
Shareholders may now make exchanges between the fund families, Bouleware said - something they were unable to do before Friday. The Aetna and Pilgrim Web sites will be merged this month.
ING acquired Pilgrim Funds in 2000, when it bought ReliaStar Financial Corp. That same year the Dutch company acquired the mutual fund and life insurance operations of Aetna Inc. Both acquisitions were absorbed into ING U.S., and last spring ING's own small fund family was folded into the Pilgrim family, Bouleware said.
As part of its agreement to buy Aetna Funds from the health insurance company, which still uses the Aetna brand, ING said it would remove the Aetna name from the family by the first half of this year, according to a company spokesman.
Though ING U.S. is now one of the nation's top life insurers, its mutual funds have not made much of an impact, Bouleware said.
Charles Wendel, the president of Financial Institutions Consulting in New York, said that expanding in the crowded mutual fund market is always difficult, and it is even harder when a company is supporting multiple brands. Combining Aetna and Pilgrim "makes sense for the long term," he said.
ING has already had some success developing its fund sales in Canada, he said. However, in that country the funds are sold largely through a direct mail campaign, and Wendel said he doubts such tactics would work in the United States.
The U.S. unit's funds are sold mainly through financial advisers, but the company now has seven wholesalers dedicated to the bank channel, which it began to focus on about 10 months ago, Bouleware said.
Since then ING has sold $200 million of mutual funds through banks, Bouleware said. But Kenneth Kehrer, the president of the Princeton, N.J., consulting firm Kenneth Kehrer Associates, said ING is "clearly not a top-tier player" in the bank arena.
ING also has 20 independent wholesalers and 18 dedicated to the wirehouse channel, Bouleware said.
Despite announcing late last year that it would lay off about 1,600 people from its U.S. work force of 10,700, none of the U.S. unit's wholesalers have been let go, he said.