Marketer Discusses U.S. Bancorp's New Brand of Funds
December 17, 2001
Peter Torvik is VP and head of marketing and product development for U.S. Bancorp Asset Management, formerly U.S. Bancorp Piper Jaffray Asset Management, and is responsible for marketing its First American Funds family. Before joining U.S. Bancorp, he was president of DPG Group, an affinity marketing and hedge fund distribution firm. In February, U.S. Bancorp announced a merged with Firstar Corp. When the acquisition was completed in September, the firm merged the First American Funds and the Firstar Funds. Mutual Fund Market News discussed marketing the combined fund family with Torvik, as well as the key aspects of selling funds with a bank as a parent corporation. An edited account of his conversation with Andrew Brent follows.
MFMN: The First American Funds family is the fifth-largest bank-affiliated mutual fund complex in the country. How does marketing and selling mutual funds as a bank differ from that of other investment managers?
Torvik: The biggest difference would be our affiliated channels. We have affiliated brokerage channels and trust channels that account for the bulk of our sales, which makes us more internally focused than, say, a Janus or an Oppenheimer. That's really the main difference.
We enjoy what I would call privileged access' to those channels. Although they sell other funds and other fund companies in all cases, we do have inside knowledge and great relationships across the enterprise. So whether it be Piper Jaffray or U.S. Bancorp Investments, which are financial consultants that work out of the bank branches, our corporate trust department or our 401(k) platform, we do have the inside track with these folks.
MFMN: How does the dynamic work between the funds and the other groups? Do you have the inside track simply because of contact or is it more formal than that?
Torvik: I'd really say it's contact. We don't have quotas. We don't have differential payouts. What we do have is really some great close relationships with these channels. And, you know, we're privy to their strategies and to their needs. It's kind of like arm's length from the standpoint that we do wholesale to them. We have a full team of internal and external wholesalers, a product group, a marketing group a communications group, so we really do treat them the same way they're treated by other vendors, but we're on a first name basis. We all work for the same organization. We all have the same stock options. There are good reasons to work together.
MFMN: Most fund family names carry the name of the asset manager behind them. Where did the name First American Funds' come from?
Torvik: The First American Funds is an old name starting from an old money market fund from the early 80s. So that name has been around a long time and has grown through internal growth and acquisition. The Piper [Jaffray] acquisition [in 1998] brought in Piper Capital and their funds and [funds were added with] the recent Firstar merger. But with the Firstar Funds we went through, I think, a very deliberative review process of what we're going to name our fund company and why we're going to name it that. And First American seemed to have solid imagery around the table.
For regulatory reasons, we didn't feel that U.S. Bancorp was good because of the fact that you can't use the name bank' in fund groups and various things like that. And there were reasons to keep the name separate. Overall we had a million customers with First American accounts, and a name change is disruptive. We didn't feel like the disruption was worth it vis a vis what we thought we might pick up in another name. So we just rallied around the First American name. We've re-branded it, put the George Washington imagery on it, totally new set of materials and marketing tools, and everyone's pretty excited.
MFMN: When did you initiate that re-branding campaign?
Torvik: September 24th was the final merger week [with Firstar] and after that we've been on the road showing off George.
MFMN: Internal road shows?
Torvik: Right, we've been visiting our brokers and groups in their branches both at Piper and the bank. We've been meeting with personal trust officers around the country and really showing them the new fund family that emerged out of the mergers.
MFMN: Clearly, your most aggressive marketing is towards the internal bank and brokerage group. Are there other external channels that you go after?