Web sites geared toward financial advisors have changed dramatically in the past few years, and even more dramatic improvements are expected. The changes are being driven by competition and the need for mutual fund sellers to forge even closer links with intermediaries.

Firms that sell financial products have no choice but to catch up with the head of the pack if they want to continue to attract advisors and the huge pool of client assets they represent. Most industry leaders have been smart enough to change with the times and continually upgrade their Web offerings, according to Dalbar Inc. , a research firm with offices in Toronto and Boston. The laggards, in turn, are losing ground.

“If there is one area in which many fund companies’ sites fall short, it is the level of sales support that they offer advisors,” says Mark McDonald, Dalbar’s manager of client and public relations in Toronto. “The best sites are effective at this. But there is a large range in the level of information that sites provide.”

Dalbar has long monitored the metamorphosis of the financial services industry on the Internet and it closely tracks and researches industry Web sites. Thus, it has good basis for comparison.

“For instance, while some sites provide advisors with the selling points of each of the funds in their product line, assistance with composing prospecting letters to send to clients and PowerPoint presentations that the advisor can use to sell the particular product, there are just as many sites that provide none of it,” he says. “The reasons probably are manifold, from cost to the time necessary to produce these materials to bandwidth limits.”

Pressure to improve Web sites has arisen as more advisors have become savvy Internet users. And many clients — often baby boomers who have become fairly sophisticated investors — now are comfortable with the technology. As a result, the expectations of VIP visitors to a company’s site are rising.

McDonald says the most successful firms quickly realized that their online portals were becoming a vital sales and marketing link to advisors across Canada.

“Advisors and their assistants usually go to a fund company’s site to get information on a particular client’s account; to reprint a client’s statement or tax receipt; or to research funds,” says McDonald. “Companies are realizing there are both financial and goodwill benefits to providing that information.”

While some fund manufacturers were slow off the mark, all now realize the importance of readily serving advisors — but with varying degrees of effort.

“There are still differences from site to site in the level of account information offered to advisors,” McDonald says. “Some only provide basic information, such as account balances and unit balances. Bigger firms, such as AIM [Funds Management Inc. ] or Mackenzie [Financial Corp.] , will let advisors look at clients’ systematic investment plans, change a client’s address, change dividend options — things like that.”

Fund sellers are also finding that advisors’ assistants visit their sites as often as their bosses, so they are making it possible for support staff to handle many administrative tasks online.

MONEY GOES WHERE IT’S EASY

“There will always be a relationship between how easy it is to do business with a fund company and how much money an advisor sends to that firm,” says McDonald. Making life easier for the rep and his staff should be a priority.

Dalbar (www.dalbarcanada.-com) has noticed that the industry leaders have been using their sites to “become true business partners” with advisors. “Sites such as AIM’s, Dynamic [Mutual Funds Ltd.] ’s and Mackenzie’s are offering downloadable software that will help design portfolios for the advisors’ clients,” McDonald says. “The software suggests funds for the client to invest in and an asset mix, and will prepare a formal proposal for the advisor to take to his or her client.

“We’ve talked to the companies that offer these tools,” he adds. “And, for the most part, they’re quite pleased with the traffic the software is getting and the number of advisors that have downloaded the software to use on their own systems. While I wouldn’t call that a ‘must have’ right now, I think it will be soon.”

In the future, fund-selling sites will have to work even harder to solidify links with advisors and their staff and clients by offering more in-depth fund information and greater interaction.

@page_break@Fund companies also must acknowledge the competition and that periods of lacklustre performance may occur more frequently.

“Many companies are slow to allow users to compare the funds in their lineup to third-party, objective benchmarks,” says McDonald. “It is rare to see a company publish the Morningstar [Canada] ratings for its funds, or the performance of its funds alongside the performance of its funds’ benchmarks.

“That’s understandable,” he adds. “It takes fortitude to publicize the fact that your funds are underperforming their benchmarks or earning less than funds with stellar Morningstar ratings.”

The fund companies must also ensure product information is readily available through the growing number of new technologies that will soon be commonplace.

“Advisors want to know immediately about market recaps, earnings releases and interest rate hikes.” McDonald says. “Companies should start delivering that information as sound bites to advisors’ PDAs, e-mail inboxes and — when podcasts go wireless — those, too.”

For fund sellers, the future is about using every available technology to become more closely linked to advisors and their staff. Savvy fund companies will want to become indispensable by providing everything advisors want. IE



If you have Web sites to share with IE readers, e-mail Glenn Flanagan at gflanagan@sympatico.ca.