Increasing competition and rising distribution costs in the fund industry have prompted a growing number of companies to adopt Web-based strategies designed to cut distribution costs as well as differentiate their products and services to advisors and investors.

Last month alone, at least five different fund companies launched some sort of online initiative. Whether it was adding new online tools to improve navigation on their Web sites or offering funds through online advisor portals, the ultimate goal of such initiatives is to ease advisors' and investors' access to investment products, said Lee Kowarski, a consultant with New York-based technology consulting firm, kasina. "Two things are going on. Firms are realizing that clients are struggling with the usability of their Web sites. At the same time companies are trying to take a closer look at who they are reaching and how they can more effectively reach the markets they are looking for and they are exploring different tools that may help them."

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.