A Different Way to Filter Mutual Funds Online
Many of our digital strategy engagements include a competitive analysis. Though we comprehensively cover the best practices for all components of asset managers’ Web sites, we often linger on mutual fund filtering. By filtering, we mean the interaction between user (typically financial advisor) and Web site to show a small set of relevant funds. Any manager with more than fifteen funds (less than that, you could just show a list) has to consider filtering. Clients often point to the J.P. Morgan filter as a favored practice.
I tend to agree, especially with the quick access to 4 & 5 star funds. Yet, I’ve been mulling a different approach to filtering.
The approach I’m thinking of is more akin to Starbucks coffee bean sales. As best I can tell, Starbucks has over 34 unique coffees. Starbucks walks you through a 3-question process to understand preference. After answering the questions, you receive a recommended coffee (for me it’s the Veranda Blend) with a few secondary recommendations. That’s similar to the emerging robo-advisors’ approach from companies likeBetterment and Personal Capital. The robo-advisors use 5 or 6 questions, and after answering all them you receive an asset allocation model. What if the approach more closely mimicked the Starbucks coffee finder or robo-advisor asset allocation analyzer? This sequential question approach has at least three advantages:
- Simple and straightforward
- Responds well on all devices (often those little filter buttons typical to asset management Web sites are difficult to toggle on my phone)
- Great analytics related to fund (broadly asset class) interest
These advantages cost internal time and resources. Most likely a cross-functional team (Marketing, Product, and Sales) needs to convene to develop/scrutinize the questions as well as develop the fund mapping. Given the potential benefits, this seems like an approach worth considering.