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Rating:A Quiet Mutual Fund Giant Adds a New Channel Not Rated 4.0 Email Routing List Email & Route  Print Print
Wednesday, January 06, 2010

A Quiet Mutual Fund Giant Adds a New Channel

Reported by Neil Anderson, Managing Editor

John Blood
Dimensional Fund Advisors
Dimensional Fund Advisors has long focused on distributing to institutional investors and through select, qualified independent RIAs, but now DFA is diving into a third distribution channel. Michael Lane, vice president and head of DFA's broker-dealer, bank trust and third party asset management provider programs, confirmed that John Blood joined on Monday to work specifically with independent broker-dealers. And Lane also confided that DFA has already lined up relationships with five "core" indie B-Ds.

"There could be a significant increase in the number of advisors we work with," Lane told The MFWire, noting that the firm already works with about 1,700 approved advisors. "In 2010, we may approve 100 new advisors in the broker-dealers."

Blood brings B-D street cred to a firm historically focused on the indie RIA channel (about $90 billion of DFA's $165 billion is handled by advisors). He most recently served as chief market strategist and vice president of investments at Commonwealth Financial Network, an indie B-D that is one of the initial "core five" DFA recently started working with. Lane confirmed that the other four are AIG's B-Ds, Cambridge, ING's B-Ds and LPL.

The MFWire could not immediately reach a Commonwealth spokesperson for comment on how Blood's duties are being handled.

Lane added that DFA will also shift one of its RIA support specialists, senior associate Hunt Cairnes, to work with Blood focused on the indie B-Ds. (Cairnes will take his new post on February 8 and move to DFA's Austin, Texas headquarters.) And DFA's current regional director force (numbering about 16) supporting RIAs will work the indie B-Ds' advisors, too.

DFA has always kept tight control over which advisors can distribute its funds, using its own screening process for each individual RIA, and Lane insisted that the process will remain "consistent" for individual advisors with indie B-D partners.

"Yes, we're approving the broker-dealer, but we're still maintaining controls," Lane said. "It's an opportunity for us to expand the reach of Dimensional while not moving away from what got us here."

To that end, Lane noted that, at least for now, DFA is looking to distribute "strictly through independent broker-dealers," not full-service B-Ds like the wirehouses.

"It's so difficult to maintain controls in the big wirehouse B-Ds," Lane lamented, adding that such firms' systems clash with DFA's individual advisor approval process. "They want everybody to have access."


Company Press Release

AUSTIN, Texas, Jan. 6 /PRNewswire/ -- Dimensional Fund Advisors announced today that it has hired John Blood, formerly with Commonwealth Financial, to lead a new initiative to develop strategic relationships within the broker/dealer community.

"We are establishing selling agreements with select independent broker/dealers that will allow their fee-based advisors to provide clients with Dimensional strategies," said Michael Lane, Vice President and head of Dimensional's broker/dealer, bank trust and TAMP (third party asset management provider) programs. "John's investment and industry experience will be invaluable to us as we expand our presence within this important industry segment."

"This outreach will be consistent with our approach with fee-only advisors and complements the successful partnerships that Dimensional has developed over the past 20 years with TAMPs," Lane continued. "TAMPs are a perfect fit for advisors who are seeking support in areas such as operations and marketing. Our broker/dealer program will focus on serving advisors who have their own operations and marketing resources and want to work with Dimensional to develop opportunities for mutual growth."

John Blood, CFA, joins Dimensional from Commonwealth Financial, where he was the firm's chief market strategist and vice president of investments. In this role, he provided investment advice on mutual funds, ETFs, and other investment products to 1400 independent financial advisors. He has an MBA and an MS in Finance from Boston College.

Dimensional Fund Advisors is a global institutional asset management firm owned primarily by employees and directors. The firm's broadly diversified mutual funds are engineered and managed to precisely target dimensions of risk and capture their expected returns. As of December 31, 2009, Dimensional had $165 billion in assets under management. The firm has offices in Austin, London, Santa Monica, Sydney, and Vancouver.

SOURCE Dimensional Fund Advisors 

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