While e-mail and corporate Web sites are nothing new, fully mastering their capabilities to interact with intermediaries and clients is still very much a work in progress - and many financial companies still just don't get it.

A recent study by IT strategic consulting firm kasina of New York shows that asset-management firms plan to triple e-mail budgets over the next three years even though a large number of firms still lack a coherent e-mail strategy.

Further, few firms are using e-mail for marketing, which all advisers are keen on, said Steve Miyao, kasina's chief executive. Less than half the industry, or 40%, is concerning itself with click-through rates, an important metric, Miyao said, which every company should pay attention to. Find out how many people are looking at your e-mails or going through to your Web site, he suggested.

And keep it simple, Miyao added. E-mails with simple teasers receive 40% to 50% click-throughs, while those with full content in the e-mails receive a paltry 5% to 15% click through.

Lacking e-strategy finesse, firms nonetheless are still increasing their spending, with kasina finding that today's average $30,000 annual e-mail budget is slated to triple over the next three years - topping a quarter million annually at leading firms.

The study, "Intermediary e-Mail Trends and Best Practices," focuses on subscription e-mail messages, marketing campaigns, wholesalers and e-mail. The results are based on an analysis of 18 asset-management firms in various countries, including the U.S., in addition to in-depth interviews with 30 of the firms and interviews with more than 400 financial intermediaries.

Spam Attack

"Advisers are just inundated," said Karen Valdez, marketing strategist at Click Communications. "Firms that are not focused risk being ignored.

Asset-management firms send an average of 65,442 e-mails to financial intermediaries every month, a large number of which are often deleted without even being read.

"Financial advisers feel like they are being spammed by the asset management companies," Miyao said. "And the issue at hand is not that one company sends 1,000 emails a day to one adviser, it's that they're getting e-mails from every single company."

However some companies have combated these problems and have even put in measures to bar employees from sending out too many emails a week.

Others, such as Putnam Investments and Scudder Investments, are among a few firms that have account alerts, whereby financial advisors can set very specific triggers, so they will be alerted when certain activities take place within their clients' accounts, like when a client redeems or adds a certain amount of money.

Gordon Forrester, managing director and director of marketing at Putnam, said that his firm notifies clients of redemptions and purchases via e-mail, and also uses it to send literature pieces, updates and important news.

"The only drawback is oversaturation," he admitted, adding it can be avoided if the industry collectively uses e-mail responsibly.

Phoenix Investment Partners allows users to receive very detailed, very segmented information.

"E-mail is a more effective medium than any of the other marketing mediums - and is fairly cheap," Miyao said. "The reason it is more effective is because you can get immediate feedback on it. Segmentation is much easier to do, and when you are segmenting the information more, you reach people in a time-effective manner, it's a very good value proposition."

Kerri Connolly, director of strategic services at the New York offices of Digital Impact, said segmenting and personalizing information allows fund companies to contact someone with less money invested in an easy and economical way, and still let that investor feel important.

This information and segmentation can all be generated with relatively little work by the companies, as long as they have certain engines and technologies in place. And the information can further be used to market different products to them or "inform" the individual about different products from the company.

Copyright 2003 Thomson Media Inc. All Rights Reserved.

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.