"This is not a load fund family," said a Janus spokeswoman when the firm created its Adviser Series of funds and it looked like the company might begin catering more to financial advisers in 2000 [see MFMN 6/26/00].

Denver based-Janus still is not a load fund family, but come October, it won't be strictly a no-load shop, either. The firm has filed proxy statements for class "C" shares that carry a 1% level-load fee to be added to the 11 Janus Adviser Series funds, according to Russell Parker, vice president and director of distribution at Janus. Class C shares are geared toward sale through intermediaries.

"We're responding to the market," Parker said. "We're committed to providing investors with as much choice as possible, and more and more want to go through financial advisers, [whether they're] fee based [or] level load. Clearly, there's a movement to advice. We continue to have a very strong direct marketing business, but at the same time, advice is picking up steam."

Janus is not the only traditionally direct-sold firm that is opening up to the financial adviser distribution channel. Late last year, INVESCO of Denver announced that it would stop selling its products directly to investors and begin selling primarily through brokers and financial advisers. Zurich Scudder of Boston and Credit Suisse Asset Management of New York also converted their funds from no-load to load in 2001.

Other firms, including Strong Investment Management of Menomonee Falls, Wis., American Century Investments of Kansas City, Mo., and T. Rowe Price of Baltimore have all recently added loaded shares to their product lineups.

Janus is not making nearly as big a change as INVESCO or Scudder did. Retail investors are still the firm's primary focus and the C class shares are only being added on the 11 Adviser series funds, Parker said. However, INVESCO took similar steps towards intermediary distribution before making the total conversion in 2001. In 2000, INVESCO began offering C shares that carry a 100 basis point 12b-1 fee. Janus maintains that it is not at all considering a complete transition away from no-load distribution.

Janus first got involved with intermediary distribution in April of 2000, when it transferred the retirement class of its Janus Aspen funds to a new line known as the Janus Adviser Series, carrying a 0.25 percent 12b-1 fee. The series was designed to be sold through plan sponsors, broker/dealer wrap programs and variable annuities [see MFMN 4/10/00].

"I don't think it's surprising that Janus is coming out with C-shares," said Jim Folwell, an analyst with fund researcher Cerulli Associates of Boston. "They're branching out into another distribution channel and that's a logical move for them. We've see a number of [formerly] strictly no-load firms do it."

At this point, one would guess that Janus would jump at any chance to garner assets. Since the beginning of 2001, the firm has seen a net outflow of $11.9 billion from its funds, more than double the outflow of any other firm in that time, according to Financial Research Corporation. In that same time, assets under management have dwindled from $250 billion to $133 billion, according to Janus.

Although the addition of C shares is significant because it is indicative of the direction the industry is taking towards advice, it is not huge news for the firm or, especially, for Janus' parent firm, Stilwell Financial.

"It's irrelevant to the organization as a whole," said Lehman Brothers' Mark Constant, an equity analyst who covers Stilwell. "If Starbucks opens 10 stores does that make a difference? I don't see it making any meaningful impact at all."

Whether or not intermediaries react to the C share offering remains to be seen.

"I think that any time you offer more options, it helps," said Jim Dew, an independent financial adviser in Phoenix. "There will probably be some people who will want the C shares. I'm sure it'll help."

Dew added that he, like many financial advisers, will seek out no-load options and then charge their own fees. That is an option open to registered investment advisers (RIAs). Consequently, Janus' C share offering may appeal more to licensed securities dealers, who can sell C shares and receive a fee that way, Dew said. Anthony Vargo, an asset management adviser with Legend Financial Advisors of Pittsburgh, agreed.

"I think it's probably a good move on their part," Vargo said. "But what typically drives our choice of funds is the funds themselves, not the fees. We primarily buy no-load funds."

Although Janus is known as a no-load fund family that sells direct to retail investors, the days of single distribution channel companies are over, according to Cerulli's Folwell.

"I don't think it's about being dedicated to an individual distribution channel these days. For all companies, including Janus, it's about opening up to as many distribution channels as possible. Maybe they'll eventually add A and B shares, too. Who knows? Maybe they'll hire some wholesalers. But I think that's probably farther down the line."

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