Mutual fund service providers are too slow in adapting to changing technology and business practices, according to financial intermediaries, including fund supermarkets, banks, and financial planners.

The increasing consumer focus on savings and retirement, and the unprecedented availability of financial information, is having a profound impact on the needs of financial intermediaries, said Darlene DeRemer of DeRemer and Associates of Wrentham, Mass. By 2007, traditionally-distributed, load retail funds will account for only four percent of the marketplace, said DeRemer. As a result, the operational and marketing programs designed to support this channel are quickly becoming obsolete.

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