The fund wholesaler is a bit of a sacred cow in the fund industry. After all, what firm wants to eliminate positions that drive sales?
But in what may be an indication of how serious the situation has become, several mutual fund companies have culled the ranks of their wholesalers in an effort to improve the bottom line.
Most recently, Phoenix Investment Partners and Citizens Advisers announced that they would cut some sales positions. Hartford, Conn.-based Phoenix said it would eliminate seven external wholesaler positions from its private client group in reaction to market pressures and as part of a strategy to focus on the wirehouse and managed account channels. Citizens, a Portsmouth, N.H.-based social fund advisor, eliminated 15 positions in its sales and marketing departments due to market pressures and Milwaukee-based Ziegler Companies slashed 35 positions from its ranks late last month, affecting two wholesalers.
Those moves follow similar cuts made by larger firms like Delaware Investments and Putnam Investments earlier in the year. And those are just the cuts that have been made public. Industry sources say that there are scores of other cuts that were quietly made and not announced.
And it doesn't appear to be getting any better. American Skandia is preparing to make another round of cuts, adding to the two cuts it made earlier this year. (See MFMN, 11/5/01). The job cuts it made earlier in the year did not match the drop in sales revenue for the firm, said Tim Klahs, director of investor relations with the firm, and more are needed.