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GuideStone Preaches to Broader Audience

Call it a smart business move with a bit of divine intervention. The financial services arm of the Southern Baptist Convention of Nashville, Tenn., has rebranded its operation, including its $8.5 billion mutual fund complex, under the GuideStone Financial Resources moniker and is reaching out to serve the financial needs of a broader audience of Christian evangelical colleges, schools, hospitals, churches and other organizations.

As such, the fund family is now called the GuideStone Funds. It was formerly known as the AB Funds, named after the organization's previous title of the Annuity Board of the Southern Baptist Convention. The 88-year-old organization was founded in 1918 after World War I in order to provide religiously based assistance to retired Southern Baptist pastors and widows in financial need. The group provides retirement plans, life, health and disability insurance, as well as investment programs and mutual funds. The Southern Baptist Convention, the affinity group itself, was founded in 1845 and now counts 16 million members across 42,000 churches in the U.S.

While that mission has since broadened to provide financial products and assistance to a larger group of Southern Baptist church staff and other related institutions, the financial services provider is once again expanding its core audience. Facing a saturated market and interest from other evangelical religious groups, 16 months ago, in mid-2004, it slowly began making its financial offerings available to those beyond its Southern Baptist core audience.

Now it's hoping to attract the attention of hundreds of other churches and ministry organizations within the great Christian evangelical marketplace by making its mutual funds, which it touts as the nation's largest Christian-screened funds, available on the recordkeeping platforms of various retirement plan sponsors, the 403(b) retirement plans of religiously inclined not-for-profit and charitable organizations.

Pitching Funds to a New Market

"We think this is an area of significant interest and opportunity to get on the recordkeeping systems and become an [investment] option," said John Jones, chief operating officer of GuideStone Capital Management, the investment advisor to the GuideStone Funds.

Reaching out to a religiously aligned market is a "natural evolution" for the organization, Jones noted. "We had discussed it in the 80s and during the 90s dynamic bull market," he said. "But given the need to maintain critical mass, it begged how we might best do that."

Although many of these Christian organizations already have retirement plan providers, many don't offer a broad family of Christian-based funds, said Roddy Cummins, chief investment officer of GuideStone.

Other Christian-based mutual funds exist, but most are niche funds and don't offer the same breadth of diverse investment choices that GuideStone offers, Jones added.

The diversified GuideStone Funds group includes nine core funds plus another eight funds-of-funds that invest in varying percentages in the nine core funds. The core funds were started in August 2001 after being converted from unregistered commingled trusts. The funds-of-funds debuted in July 2003.

Keeping faithful to their religious roots, the funds will not invest in companies with ties to liquor, tobacco, gambling, pornography or abortion, or companies judged to be incompatible with the organization's moral and ethical posture.

But GuideStone doesn't manage a dime of the funds' assets itself. Rather, it serves as a manger-of-managers, with each fund tapping into the investment expertise of outside managers. "Our clients gain exposure to the best sub-advisory firms that [they] would not otherwise be able to patch together," Cummins added.

New Name, Focus and Message

The recent name change from Annuity Board to GuideStone was not an easy decision to make after 88 years, according to Jones. "We ran across perception issues" that led to misunderstandings that the only form of retirement benefit was annuitization, he admitted. "We felt like a name change was warranted." As a result, the firm took its namesake from the Roman road markers, or guidestones, that were used to indicate directions or warn travelers of danger. "The idea is to help clients, as lifelong partners, trek on that road to financial well-being," Jones said.

The goal now it to build the awareness about what GuideStone has to offer, the executives said. "This will take an aggressive marketing plan to exposure this to the market," Jones said. That plan does not include a cadre of fund wholesalers but hinges on a print advertising campaign that GuideStone expects to begin toward the end of the first quarter of 2006. The group is currently assessing all financial industry and religious publications to determine where to place ads, said Lon Johnson, director of strategic marketing at GuideStone. The group will be creating ads internally, without the help of an outside ad agency. "People knew us before as the Annuity Board, and we want them to understand who we are and what we can offer as GuideStone," he added.

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