Yet another mutual fund advisor has chosen to shed its corporate name and rebrand itself, adding to the growing list of fund groups that recently have, or soon will, change their own names or those of their proprietary mutual funds.
Later this week, U.S. Bancorp Asset Management of Minneapolis will morph into FAF Advisors. The new name leverages an abbreviated version of its successful $55 billion proprietary mutual fund group's brand, the First American Funds. The fund group sports 44 funds and was recently recognized by Lipper of New York as the best mixed equity small fund group for the three-year period ended Dec. 31, 2005 among 497 small fund companies. That Lipper designation is awarded to the group with the best three-year risk-adjusted performance using a combination of stocks and bonds to achieve consistent returns.
Only the U.S. Bancorp investment advisory unit will change its name, effective this Friday. The funds themselves will not undergo any change of identity. Nor will any change in brand take place for U.S. Bancorp Fund Services, the division of U.S. Bancorp that provides back-office services to non-proprietary mutual fund groups.
Adopting a Single Brand
Why the change? It was a combination of purpose and timing, said Tom Schreier, CEO of U.S. Bancorp Asset Management and president of the First American Funds in an interview. Although Lipper had recognized the fund group with three awards over the past two years and the group continued to receive accolades, "there was not a good connection with us and our fund family," he said. "We were trying to support two different brands," he added.
The rebranding to FAF Advisors allows the advisory unit to make that direct name connection with the funds as well as indicate to the institutional market that there are other products not directly related to the mutual funds, Schreier noted.
"This [rebranding] has created the right level of connection," he added. "Having a name that focuses on investment management and nothing else is the right thing."
The rebranding initiative comes complete with a fresh logo, although George Washington continues as the group's mascot. U.S. Bancorp first began using Washington's image in 2001 because he embodied certain characteristics similar to those of the firm. Those characteristics include integrity, which is now more important than ever in the marketplace, Schreier commented.
The change in the firm's advisory name comes at a time when the First American Funds have been expanding distribution beyond U.S. Bancorp's own proprietary channels and targeting wirehouses, regional broker/dealers, independent firms and other outside distributors. Open architecture has been the main goal, Schreier noted.
So far, the group has signed on 20 distribution partners, and in tandem, has significantly expanded its wholesaling force. One year ago, the First American Funds employed only five internal wholesalers. The group now employs a total of 30 wholesalers across 15 teams of one internal wholesaler partnered with an external wholesaler, he added.
U.S. Bancorp's asset management unit has also cast off its $34.5 billion private client group, which includes high-net-worth individuals, spinning the unit back to parent U.S. Bank almost three months ago. The private client group was originally brought into the asset management unit's fold in January 2002, said spokeswoman Cheryl Stone.
What's in a Name?
While the name change is a big initiative for the advisory company, it will likely be a non-event to current fund investors, predicted David Kendall, principal and creative director with Kendall Ross Brand Development & Design of Seattle. There are many examples of companies that have product names that have much stronger brands than the company name itself, he said. Often, consumers strongly identify with the product's brand identity and may just yawn at a parent company's name change. "The company name may be irrelevant," he said.
Case in point: The wildly popular American Funds has continued to attract record assets despite its sponsor, Capital Research & Management of Los Angeles, having a name that has little connection to the fund group's brand.
Changing a fund group's name, on the other hand, can be of great consequence to consumers, especially for a highly successful fund complex with a well-established brand, Kendall said. If Capital Research were to ever change the American Funds' name, investors would wonder if something negative was underlying the change, he added.
The Rebranding Rhumba
U.S. Bancorp is among a group of asset management firms that have, in recent months, chosen to change their identities or those of their fund groups, or that have announced intentions to do so.
Several months ago, The Reserve Funds of New York, best known as the first retail money fund group, simply became The Reserve. Late last year, American Express Financial Advisors rebranded its advisory company name to Ameriprise Financial and its proprietary funds to RiverSource Funds (see MME 1/23/06).
This past January, Merrill Lynch announced that its U.S. retail products, including its mutual funds managed by Merrill Lynch Investment Management of Princeton, N.J., would adopt the new name of Princeton Portfolio Research & Management. But two weeks later, Merrill reversed that decision. That became a moot point when, on Feb. 15, Merrill announced its merger with BlackRock of New York. A Merrill spokeswoman confirmed last week that the Princeton banner name has been scrapped and that all of Merrill's mutual funds will soon take on the BlackRock brand name.
On Feb. 6, Deutsche Bank officially changed the name of its U.S. fund family from Scudder Funds to DWS Funds, and the name of the funds' advisor from Deutsche Investment Management Americas to DWS Scudder. The DWS brand name reflects the moniker Deutsche has long used for its non-U.S. mutual fund groups.
And a Legg Mason spokeswoman confirmed that in April, the first of Smith Barney's three equity fund groups will take on the brand new Legg Mason Partners moniker, with the Salomon Brothers Funds group and the CitiFunds group to follow with a similar change.
All of Citigroup's proprietary fixed-income funds had already transferred to become part of the Western Asset Management group, a Legg Mason affiliate. Several months earlier in a landmark deal, Legg Mason and Citigroup had swapped their brokerage and asset management companies.
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