Strong website good for business: survey

(September 21, 2005) Thinking about cutting your online budget? Think again. A feature rich website is a good investment — and that doesn’t come cheap.

Two of every three Canadian financial advisors say the quality of an asset manager’s website will determine if they will do business with that firm, according to a survey by U.S.-based consulting firm kasina and Vancouver-based Credo Consulting. As many as 72% of advisors say having client account access through a website is the most important feature they look for.

Moreover, advisors with around $10 million in assets under management are more likely to be attracted to a firm because of its website, though the importance of a good website diminishes as the AUM grows. Over half of respondents cited market commentaries and pricing and performance information as being important.

Other online features like sales tips or ordering literature were less critical to those surveyed, however Cynthia Enns, a partner with Credo, says that doesn’t mean these features should be taken down. Using the example of ordering literature, Enns said “there is still value in that but perhaps they are undervaluing them because it is a de facto standard thing now.”

The consulting firms looked at the websites of 24 leading Canadian asset managers and singled out five as the best, based on branding, content, online services, usability and web technology, which refers to the customization and industry specific tools available on the website. The top five sites were:

• AGF Funds
• AIM Trimark
• Fidelity Canada
• Franklin Templeton
• Talvest Mutual Funds

“Overall the Canadian marketplace is very strong and from an international perspective it competes with every other industry including the U.S. and Europe,” said Malachi Black, a senior business analyst with kasina. “Canadian asset management advisor websites are robust, they are well managed, well organized and usable.”

But developing a good website doesn’t come cheap. As many as 60% of the firms surveyed said they spent between $100,000 and $500,000 a year on their sites, excluding salaries. One-fifth of respondents said they spent $1 to $2 million a year.

Still, it is important to note that there is no direct correlation between spending and site quality. One of the firms that made it into the top five said its website wasn’t a high corporate priority, they simply put the resources they allocated to their site to good use, explained Black. Still, he cautioned, you can’t spend the bare minimum and expect to excel.

Account access was one of the strengths of the Canadian websites, though Black said all of the sites have an issue or two that could be improved upon.

In that sense, websites are always a work in progress. “While the overall standard is quite high, advisor expectations are continually rising as well,” said David Enns, president of Credo. “This means that asset managers must continually review their web presence, monitor usage of the tools that are provided, and update content and features on a regular basis.”

Filed by Mark Brown, Advisor.ca, mark.brown@advisor.rogers.com