Category: E-Business

Why Do Our Investors Love Paper?


So often the question is asked, “How can we increase our e-adoption rate?” With many firms lamenting their e-delivery consent percentages in the single digits, one has to ask, why do mutual fund investors love their paper as much as they do?

While the answer isn’t totally clear, it’s true that the mutual fund industry lags significantly behind many others such as telecommunications, utilities and credit cards. As I continued to think about this, I realized there’s more than meets the eye when it comes to e-consent and e-delivery.

Ownership of an Intangible Asset

While many individuals have selected electronic delivery for their credit and wireless bills, the same individuals may not choose electronic delivery for their mutual fund assets. Why? In my mind, since certificates were abandoned by the industry (for good reason), paper statements are truly the only form of “ownership” that a shareholder may have from a mindset and psychological standpoint. That piece of paper is the only link to their intangible assets.

Also, we’ve made it very easy for shareholders to throw their enveloped statement into a file and not think twice. In other industries, some type of action is usually required or one would face some not so pleasant follow ups in the form of fees or worse.

More Than a Single Marketing Campaign- Lather, Rinse, Repeat (and Test)

Coming from a Marketing and E-Business background, I know that the key to any message is repetition. I also know that repetition of the same message in the same format and medium is probably not going to succeed. To that end, different offers will resonate with different sets of investors. Some clients are interested in green messaging in terms of saving paper and envelopes, some in the reduction of overall fund expenses, while others are sick of shredding their statements as they receive them. Has your company tested offers and mediums and taken a look at the corresponding response rates? These simple and inexpensive tests will ensure that you pinpoint efforts on those that work and matter most to your client base.

Have We Asked Why?

While we all complain about low participation rates, have we reached out to our end clients or enlisted the help of our investor services representatives to truly uncover the core issues or “rebuttals” that shareholders use when opting not to enroll in e-delivery? If not, why? These clients hold the key to assist in further developing the solutions to make e-delivery a compelling offer for them.

Multiple Touch Points

In looking at the many efforts firms are using to increase e-adoption participation rates, most are starting after the fact. If you begin marketing efforts after your clients have already established their accounts, you have missed at least three to four touch points showcasing the benefits of e-delivery. Think of all shareholder touch points, from paper applications to the online account opening process, as opportunities to gain a client’s consent. Not stopping there, continue to think about registration for online account access, welcome kits and opening confirmation statements. Call center representatives and other more traditional marketing communications such as envelope backers and report wrappers also provide ways to promote e-delivery and gather consent. If you aren’t taking the time to look at the entire account opening experience, you may be missing opportunities.

Making it Easy

Now that you’ve developed an overall e-adoption strategy, it’s time to look at the overall investor experience and make enrollment as easy as possible for clients. Are communications clear, concise and consistent? Does the investor receive confirmation of their choices? Are they forced to wade/scroll through pages of disclosure? How many clicks does it take for them to agree to e-delivery? Looking at the investor experience and making it as clear and simple as possible are crucial to the success of your overall campaign.

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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