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Blake Goldring delights in handing out a yellow, hard-cover book commemorating the 50th anniversary of AGF Management Ltd., the mutual fund company co-founded by his father.

It certainly has been, as Mr. Goldring observes, a "golden year." AGF ended a four-year sales slump last summer, and for four months this spring was the top-seller of long-term funds among the non-bank firms.

Mr. Goldring takes particular pride in having defied the skeptics in pulling off the turnaround without buying a financial planning business to help sell funds, as some of his major Canadian rivals have done.

"It's a strategy that I don't believe in," said Mr. Goldring, chief executive officer of AGF. "The best way to silence the critics is to prove them wrong."

Mr. Goldring's approach means he has not been forced to go head-to-head with Canada's big banks, which can use their vast branch networks to try to convert depositors into buyers of their own mutual funds.

"If you try to emulate them, it's going to be very difficult and very costly for us," he said in an interview Friday. "More important is that [financial advisers]will always go for fund performance and service."

There have been two models at work in the industry when it comes to distribution. Investors Group Inc., a unit of Winnipeg-based IGM Financial Inc., has long been successful selling its funds through its own financial advisers. The more recent trend has been for mutual companies to acquire independent financial planning firms whose advisers are not bound to give preference to their owners' funds.

IGM, which also owns Mackenzie Financial Corp., bought independent financial planning firm IPC Investment Planning Counsel in 2004. CI Financial Income Fund purchased Assante, while Dundee Wealth Management Inc., which runs Dynamic funds, acquired Cartier Partners Financial Group.

Despite the arm's-length relationships in most cases, Mr. Goldring believes the rationale behind the trend is "if you have distribution, they would sell your product during the good and bad times."

But that premise is "faulty," he said. AGF had a 400-person sales force in the 1960s, but when economic conditions became tough in 1973 it had to lay them off. "People were just not buying our product."

Another problem with financial advisers tied to a mutual fund company is that consumers wonder whether the person recommending a fund is doing so in the best interest of the consumer, or the parent company.

"We wanted to avoid any perception that there is a conflict," Mr. Goldring said.

Times were good for AGF until 2002. Money had been flowing easily into the firm, largely on the success of funds managed by San Francisco-based Brandes Investment Partners LLP, which ran one-third of AGF's assets. When Brandes left to set up its on Canadian company, AGF was hit by a flood of redemptions.

AGF had been so "wildly successful" selling one product - AGF International Value Fund run by Brandes - that it "lost contact" with advisers, Mr. Goldring said. "We had to start listening again very closely … It's not rocket science. It's making sure they have the products and services to meet the needs of their clients."

The redemptions forced AGF to take a hard look at all of its operations. There were "no sacred cows" save its dual-class voting share structure that gives the Goldring family control and protects AGF from a takeover.

Mr. Goldring revamped the sales and marketing team. He hired Randy Ambrosie, a former Edmonton Eskimos football player who began his financial career an investment adviser, to head that department in 2004. He has since been promoted to become president of the mutual fund arm.

AGF hired more "wholesalers" - the sales force that meet the advisers. AGF fund managers who couldn't cut it on performance were turfed, and those who stayed became more active in talking to financial planners.

The company introduced new products such as Elements, a fund portfolio that pays rebates to investors if returns fall short of performance benchmarks. AGF also got lucky in that Ottawa lifted the 30-per-cent foreign content limit on pension funds, making its global funds - a specialty - more attractive.

"The proof in the pudding" was when AGF climbed back into net sales last year, and won the 2006 Advisors' Choice Investment Fund Company Award, said Mr. Goldring. "The whole team worked very hard to make this happen, and make it a sustainable solid foundation to launch us into the next 50 years."

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