Category: E-Business, Industry Trends

Key Trends Driving the Fund Industry: Changes in Consumer and Advisor Behaviors and Expectations


PrintThis is the fourth of five blog posts in our industry trends series. In this series we will look at the top five key trends driving the fund industry in 2014.

I am often asked what trends I see driving and shaping the shareholder and advisor market. A few come to mind immediately. These trends not only are what we see among fund companies, but also represent the three-to-five year lag of mutual fund behind other channels such as entertainment and retail.

Proliferation of Mobile Device Use

The average U.S. adult spends 141 minutes per day using a mobile device. (Advertising Age) This shift in how shareholders and advisors view websites has many asset management firms catching up. It is no longer acceptable to have “mobile enablement” as a special project. It must be integrated into your overall digital, marketing, and sales strategy. Firms are looking at the pros and cons of building stand-alone apps, redesigning their sites to be mobile friendly (using responsive design), or both to meet shareholder and advisor demand. Firms lagging behind with their overall mobile strategies may see declines in shareholder and advisor satisfaction, brand perception, and perhaps ongoing business.

Increased Expectations for Online Functions

Many of the self-serve features enjoyed in the banking industry are not yet available in the mutual fund arena. These include the ease of updating banking information, more advanced authentication methods, SMS alerts, and more. As consumers use these features more and more at their banks, they become service expectations and not luxuries.

From an information gathering standpoint, the parallel is the retail online experience. Shoppers can find reviews, detailed product information, blog entries, community discussions, and more before making a purchase. For mutual funds, basic statistical information exists, but due to regulatory concerns, much of the “real-world” experience and analysis may be lacking. Some firms fill this void by providing commentary, attribution analysis, and an added degree of rationale and transparency, all within the confines of the regulatory bodies. This helps tremendously, but many companies only provide these commentaries for a limited product set. Google did some analysis on this a few years back and concluded that the average number of sources of content consumed by a shopper doubled from 5 to 10 pieces of content between 2010 and 2011.

Social Media 

While social media has been used extensively to promote products in the entertainment and retail industries, true business-driving campaigns for the mutual fund industry are still lacking. Over 85 percent of high tech companies use social technologies, yet only 64 percent of financial services companies have adopted such technologies. (McKinsey)

Despite regulatory concerns, monitoring and control, and disclosure requirements, there is definitely a place for social media in mutual funds. Delivering the proper content in the proper context will be crucial for any shade of success.

Overall, the overarching trends haven’t changed much in the past 12-18 months. Mobile, social, and changing expectations will continue to drive how firm’s digital and sales strategies evolve.

True change will happen when these strategies are not thought of as stand-alone items, but fully integrated into a firm’s overall strategic vision and goals.


Brian Melter

Brian Melter

Brian joined Boston Financial in 2012 as the Managing Director for the E-Business Solutions Division. Brian helps to advance web, mobile, social media, and emerging technology-based solutions to foster innovation, cost-effective growth, and enhance client and advisor engagement. Brian has more than 21 years of experience in mutual fund technology, operations, marketing, and strategy. Prior to joining Boston Financial, Brian was with Wells Fargo Funds Management, where he led the Operations, Retail Marketing, and E-Business teams. Before Wells Fargo Funds Management, Brian led E-Commerce strategy, design, development, and online marketing for Strong Financial Corporation.

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