When the fur started flying last fall in the mutual fund industry, Putnam Investments was the first firm charged with fraud. The Marsh & McLennan unit settled with the SEC in November and paid out $110 million in fines and restitution last month.

Investors responded to the scandal by watch-listing or pulling money out of Putnam funds. Great-West Life put the firm on watch in November.

Now the Canadian insurance giant is dropping Putnam and reassigning its international funds. UBS Warburg will take over the International Equity Fund. JP Morgan Fleming Asset Management will take over the International Opportunity Fund, and Brandywine Asset Management will take over the International Bond Fund.

"We believe that Putnam has acted capably on behalf of our unitholders over the past decade, but with our review we have identified other international sub-advisers who we believe will enhance our international fund offerings," said Rick Rausch, senior vice-president of individual retirement and investment services at Great-West Life.

Laura McNamara, a spokesperson for Putnam, gave the firm's boilerplate response to a client leaving. "We're disappointed with their decision, but hope to manage funds for them in the future," she said.

The changes will take effect on July 19.  

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