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Portal Will Spread Account Information

Four major financial services companies announced last week that they will jointly operate a new Internet portal that will provide investment advisors with a wide array of mutual fund information.

A letter of intent to create the portal was signed by three asset management companies - Fidelity Investments Institutional Services Company of Boston, Franklin Templeton Investments of San Mateo, Calif., and Putnam Investments of Boston - and by PFPC, a mutual fund service provider of Wilmington, Del. The portal, which has not yet been given a name, is expected to begin operating in the third quarter of 2001, according to Jennifer Bolt, chief web officer at Franklin Templeton.

The portal will be designed for independent advisors and will provide consolidated information on clients' holdings, fund performance history, prospectuses and quarterly reports, said Bolt. It will also have transaction capabilities and will be able to provide account maintenance, she said. Advisors will be able to download both client account and fund data from the portal, she said. The major advantage of the portal will be that such information will be available from multiple fund companies, according to Bolt.

Although the portal will be owned by the four companies, information about any firms' funds may be provided through the site once a firm registers and pays a fee to have the information included. The portal will start with about 100 fund families, said Kenneth Rathgeber, chief operations officer of Fidelity Investments Institutional.

"I use the term an even playing field,'" said Rathgeber. "We were very conscious that that's what we want this to be."

While the portal is open to all funds, it is designed exclusively for independent financial planners.

"It's targeted to investment reps who do business directly with the fund companies, but right now have to contact the fund companies individually," said Bolt.

"The focus here really is the independent financial planners that don't have the infrastructure that a bank or brokerage house has," said Karnig Durgarian, senior managing director and chief of operations at Putnam. "We're really offering this to put technology in the hands of independent advisors."

The advisors who use the portal will not only be able to obtain information themselves, but they will also be able to relay it as a service to customers, according Rathgeber. The service will be free to advisors. There will be a charge to the mutual fund companies who participate. That fee has not yet been determined, according to Durgarian. It will be used not as a profit source, but to cover costs, he said. The service is expected to ultimately provide cost savings for the fund companies, he said.

"The goal here is really an industry utility," said Rathgeber.

Industry demand caused the companies to begin work on the project, according to the company executives.

"Our investment professionals have asked to be able to gain information across fund families," said Rathgeber.

"This is something reps have wanted for a long time," said Bolt.

One reason the service is just now being offered is the availability of a new service - Interactive Inquiry. Developed and supported by the National Securities Clearing Corporation of New York, Interactive Inquiry, which will be released later this month, is a service which

provides instantaneous information from mutual fund transfer agencies to financial intermediaries using a new Extensible Markup Language switch. (See related story p. 6)

"To really be able to offer [this service]...we needed the NSCC to offer this ability," said Durgarian. "The NSCC has listened [to industry needs] as well."

The rest of the technology is mostly in place, according to Paul Flood, senior vice president for E-commerce of PFPC. PFPC already retrieves information from fund transfer agencies and the portal should be simply an extension of that, said Flood.

"Our current platform has upwards of 10,000 investment professionals using a similar process," said Flood. "Looking out a year or two, I see 30,000."

There will be a separate management team to run the portal that will operate at an arm's length' from the three fund families, according to Rathgeber. While terms among the four companies have not yet been finalized, there is no lead company for the portal, he said.

"This was not any one firm," he said. "This is an industry issue that we have met with and then talked about."