For the second blog in CI’s series on transactions, we have more research-backed tips to help asset managers stand out. Just like the first installment in this series, this post has a specific focus—this time, we chose mutual fund exchanges.

Mutual fund exchanges are vital for asset managers, as exchanges help individual retail investors rebalance their portfolios and find the right asset allocations as the markets change. Plus, effective exchanges encourage investors to keep their mutual fund holdings at the same firm.

In essence, the easier the exchange process, the more likely investors are to stay with the firm. Read on for our top three tips to help asset managers take their mutual fund exchanges to the next level.

1. Show it off: make exchange capabilities easily findable

Many firms fall into the trap of lumping exchanges with buying and selling by placing them all under the same link name. In truth, exchanges are their own distinct process.

To avoid confusion and showcase exchange capabilities, firms must use the correct nomenclature. Firms should also make the capability stand out with bright colors, bold text and distinct buttons.

The best places for exchanges are the following easily findable locations:

  • The account information page — allows investors to perform exchanges as they review portfolio details
  • The secure site main navigation menu — enables investors to access transaction functionality from any page on the secure site
  • The secure site homepage — encourages investors to start the exchange process as soon as they log in

BNY Mellon and Voya stand out for placing prominent Exchange links in multiple secure site locations.

Voya's exchange button is one example of a top exchanges experience
Voya Secure Site Main Navigation – Exchange Button

2. The fewer the better: streamline exchange steps for a quicker and simpler process

Stocks and ETFs trade more quickly and easily than mutual funds, meaning firms must do all they can to encourage mutual fund purchases—and a great way to offer mutual funds a turn in the spotlight is by making the exchange process short and sweet. Though firms in our coverage set averaged 4.5 steps to exchange mutual fund shares, investors can actually complete the process in the following three steps:

  1. Selection of fund for withdrawal and fund for deposit
  2. Verification
  3. Confirmation

Even more than narrowing down the exchange process to only three steps, firms can stand out by offering the whole process on one page. MFS takes home the prize for a three-step, one-page process that is sure to keep investors happy.

MFS's exchange process places all three steps on a single page
MFS Exchange Process Step One – Exchange Shares

3. Email is essential: give investors peace of mind through detailed confirmation emails

We’ve already suggested this tip for buying and selling in our previous blog post, but email confirmations are so vital for the customer experience that it does not hurt to say it twice.

Beyond the importance of having an easily accessible record of a sale or purchase, fast communication is essential for giving investors peace of mind. Ultimately, it saves asset managers time, too—why field phone calls when a simple email will do the trick?

While any email is better than no email, firms should include the following value-added features in their emails to better stand out:

  • Logos — help to make sure investors do not disregard the email as spam
  • Customer service information — connects investors with the firm if they have any questions or concerns
  • Exchange transaction time — allows investors to double-check exchange details and ensures security
  • Additional resources — enable investors to take full advantage of the firm’s offerings

T. Rowe Price sends an excellent confirmation email. Not only does it provide basic details about the exchange, but it also includes customer service information, a link to the account login page and additional resources.

T. Rowe Price's confirmation email includes exchange details and customer service information.
T. Rowe Price Confirmation Email

Tips to Help Asset Managers Stand Out

These exchange process tips will help asset managers, not only to stand out from the competition but also to maintain their current customers. For an in-depth analysis across the coverage set, view the full report (Asset Management Monitor – Investor subscription required) on the asset management exchange experience, the second in our series of three transaction-related reports.

To learn more about the user experience asset management firms provide to investors, contact us at CI about our Asset Management Monitor research services.

Simone Burde
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