WealthManagement Magazine

Dean Witter Launches Fund Wrap Program

As of press time in early September, Dean Witter was set to launch its mutual fund wrap program--the last of the wirehouses to do so.Brokers at the firm report that Dean Witter has been holding meetings on the new program, and a roll-out appeared imminent.But it won't be "fully competitive," says Burton Greenwald, a Philadelphia mutual fund consultant. Bowing to pressure from mutual fund companies

As of press time in early September, Dean Witter was set to launch its mutual fund wrap program--the last of the wirehouses to do so.

Brokers at the firm report that Dean Witter has been holding meetings on the new program, and a roll-out appeared imminent.

But it won't be "fully competitive," says Burton Greenwald, a Philadelphia mutual fund consultant. Bowing to pressure from mutual fund companies on the firm's select list, the program is expected to debut with about 50 funds from such fund families as AIM, Oppenheimer, MFS, Franklin Templeton, Kemper and Putnam. Both no-load funds and Dean Witter's in-house funds will be left out.

"There's been a lot of friction with the select list funds that 80% of Dean Witter's mutual fund sales are still proprietary," says Greenwald, even after a "very aggressive" two-year effort by the firm to build a commitment to the outside funds. "Leaving proprietary funds off the program is somewhat of a concession to them."

The decision has angered those running the InterCapital funds, says a Dean Witter broker in New York who has seen a prototype of the program's client agreement. But another rep at the firm notes that "InterCapital doesn't seem to have as much power" as they did prior to the merger.

It won't be long, though, before both proprietary and no-loads will be added, Greenwald believes. Dean Witter reps also report that the program won't be portable.

Dean Witter's proprietary funds have not had multiple share classes, another reason Greenwald says proprietary funds won't be part of the program's debut. Yet Dean Witter has begun to change that, this summer introducing A, C and D options in its predominantly B-share InterCapital fund group (see related story below).

Greenwald says pressure from brokers will compel Dean Witter to add no-load funds, but brokers don't seem to be pushing. "I haven't heard any huge cry from brokers that they need no-loads in the program," says a Dean Witter broker in Georgia. Another rep at the firm says "it sounds like a pretty good program" that will compete with other fund supermarkets, although this rep had no details of the funds in the program.

The firm may face slow-going in getting the program off the ground, says Andrew Guillette, a consultant with Cerulli Associates in Boston. "It's not just a matter of getting the program structured," he says. "Because it's a cultural shift for them to promote third-party products, there are more training and communication issues than there were for other firms."

Dean Witter did not respond to phone calls.

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