A thousand bucks is not what is used to be. So points out the Wall Street Journal today in an article based on data gathered by Morningstar. The paper reports that the number of no-load funds welcoming investors carrying just $1,000 with open arms fell by 10 percent since the start of 2000.

Meanwhile, the number of funds requiring $5,000 to $50,000 to open an account has risen to 416 from 315, or roughly one third.

Not only are fund firms not welcoming new investors, a number of firms are also levying new fees on small account holders. The article provided American Century, Munder Capital and Scudder as examples of this trend.

The article recommends that small-time investors turn to life-cycle asset allocation funds, or exchange-traded funds as places to park their money.

For fund families the lesson may be a different one. Ironically, one of the lead examples in the article -- American Century -- was built in part by catering to small investors by requiring a low minimum investment and a simple, flat no-load structure.

Now that American Century matured it has abandoned both practices. The fund family has added loaded share classes and 12b-1 fees (both structures that James Stowers, the firm's family was proud of not offering just a decade ago).

Today, American Century is bowing to the wishes of JP Morgan Chase, its largest shareholder. Befitting the scion of the Rockefeller fortune, the New York bank is pushing the Kansas City firm to land larger clients, sell to affluent investors through broker-dealers and build its institutional business in the full-service 401(k) market. All of this makes sense for a large fund complex, but it also creates opportunities for small ones.

The maturation of the current generation of fund families may open the door for the emergence of the next generation. Rather than promising the moon in terms of investment returns, some hard-scrabble fund family may find that offering a square deal and a realistic minimum deposit schedule may be a better strategy. It certainly is a more sustainable way to build a brand.

Of course, that was a lesson lost in the go-go boom that just ended. It will most assuredly be relearned.  

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