Putnam Investments to cut fees

BOSTON, July 28 (Reuters) - Money manager Putnam Investments said on Tuesday it plans to cut fees on retail mutual funds as a way to draw in assets at a time the industry has lost billions of dollars because of the financial crisis.

Putnam chief executive Robert Reynolds, who took over the top job at the Boston-based company last year, said the cuts are designed to make the company more competitive.

"It was my belief we were too high" on fees, "and we needed to get it way down," Reynolds said in a telephone interview.

The fee cuts are the latest change initiated by Reynolds, who was recruited to restore luster to the firm. He has also brought in new money managers to improve performance and added new products to appeal to new investors.

Putnam, a unit of Canada's Power Financial Corp.(PWF.TO), said it will reduce fees on its fixed income products by an average of 13 percent, or about 7 basis points, and on its asset-allocation funds by 10 percent, or 5.6 basis points.

The company also said it will eliminate "wrap" management fees on certain retirement funds, saving investors about 5 basis points.

The reduction will make Putnam one of the less expensive fund firms, putting its fees in the bottom quartile instead of the bottom half, Reynolds said.

Putnam, which invests $103 billion for institutional and retail clients, has $54.6 billion as of June 30 in retail mutual funds, down from $83.7 billion a year earlier, according to data from Lipper, a Thomson Reuters company.

Net outflows from retail funds have slowed on Reynolds' watch to $433.9 million in June from more than a billion dollars a month as recently as January.

Putnam also said it will adopt performance fees on some funds to reflect their track record against a benchmark, and that it will tie asset-level discounts to mutual fund assets company-wide rather than to specific funds.

(Reporting by Ross Kerber; Editing by Svea Herbst-Bayliss and Gunna Dickson)