Personalizing AMC websites. Why is it imperative now?

Historically, with over 80% of Assets Under Management (AUM) originating from intermediaries such as Mutual Fund Distributors (MFD) and online Mutual Fund Aggregators (MFA), Indian Mutual Funds (MF) had little incentive to engage directly with unit holders.

However, the dynamics of the industry have undergone a transformation. The conventional roles played by intermediaries are now redefined and constrained.

Recent trends suggest that, despite the extensive and well-established distributor network, Asset Management Company (AMC) websites are now witnessing a substantial influx of traffic directly from clients and leads.

In this article, Xerago presents perspectives, arguments, and insights on why, given the evolving landscape of industry participants and regulatory frameworks, it is now vital for AMC Marketing Leaders and Experience Officers to adopt a personalized approach for refining their digital presence for direct investor engagement.

Recent regulatory changes have imposed limitations on Mutual Fund Distributors (MFDs) and Mutual Fund Advisors (MFAs), confining their role to information dissemination and execution. The exclusive prerogative to dispense investment advice is now with qualified and Registered Investment Advisors (RIA).

The realities of investment advisory intermediaries

In contrast to MFDs, RIAs are not authorized to sell mutual fund schemes, precluding them from earning commissions. RIAs can only levy an advisory fee. However, many individuals, with modest investible capital and those living in Tier-2 and Tier-3 cities, are reluctant to pay for advisory services.

A recent regulatory update designated MFAs to work as Execution Only Platforms (EOP) only, preventing them from providing investment advice as well.

A call to personalized investment advice

Xerago identifies this as an opportunity for Asset Management Companies (AMCs) to address a gap in the high-quality investment advisory market, particularly for small and medium-sized investors. This creates a strategic opening for AMCs to leverage customer data analytics and deliver customized investment advice through optimized digital channels.

Consider the following table of figures for 28 days ending Oct’23, from the web analytics tool

Source: www.similarweb.com.

The writing on the wall is dire.

On any given day, an average of 15,000 to 400,000 individuals peruses AMC websites. Of these, nearly half fall within the 25-34 age bracket. Astonishingly, their stay lasts less than 5 minutes, with half departing without further engagement – neglecting links to ancillary pages, and forgoing login procedures, even if they hold units.

One must inquire: what quest propels these visitors? Is it reasonable to presume that within a mere 5 minutes, they unearth the sought-after information embedded within the landing or home page itself?

Chances are, these swift exits are rooted in vexation towards a website inundated with information, yet bereft of intuitive organization, rendering the pursuit for desired content an arduous task.

This predicament is particularly acute for the young demographic, adept in navigating digital platforms, but conspicuously intolerant of haphazardly designed interfaces. They place a premium on flawless user experiences.

This audience, though frustrated, is an immediate asset to AMCs. It is imperative that AMCs embark on a mission to elevate engagement levels through refined user interfaces and tailored user experiences.

The growing threat

Be it casual browsers or unit holders who have channels investments through intermediaries, their choice to engage directly with your brand presents a singular opportunity for deepened interaction, personalization, and trust-building.

Xerago unequivocally urges AMCs to take prompt action, lest this opportunity dissipates in favor of the increasingly popular digital alternative – online Mutual Fund Aggregators (MFA). These entities, guided by regulatory mandates, are obligated to furnish investment options within a straightforward filter-and-search enabled interface.

Do AMCs see their investors?

Not really. The perspective afforded to them is at best a blinkered or demographically aggregated view.

Mutual Fund Distributors (MFD) were the human face of AMCs, hand-holding investors to take the first and subsequent steps to investing through evolving life situations. AMCs had an aggregated view of the customers during investor roadshows, or through the hazy filters of MFD disclosures.

Yet, even these limited perspectives are poised to diminish, as intermediaries such as MFDs and MFAs find their roles relegated solely to execution.

Vital functions like KYC completion, investor folio management, and reporting have been outsourced to Registered Transfer Agents (RTA). While this reservoir of information is at the fingertips of AMCs, it often remains obscured in the shadows of neglect.

The path to purchase

In this curious ecosystem of participants and roles, investor journeys paths of go largely unnoticed and unmapped. The triggers that propel customers through their life-cycle experiences, from initial awareness to decisive action, remain uncharted.

Now is the opportune moment for AMCs to seize total visibility into investors' data and leverage insights to unlock a wealth of benefits, revitalizing the website experience into one that is personalized, pertinent, and profoundly engaging.

The dividends of this approach will extend far beyond retention, encompassing investor loyalty and advocacy, forging a deep connection between AMCs and their investors.

We think not. Unlike when buying candy, Mutual Fund (MF) investors exhibit deliberate in their decision-making process. They demonstrate a penchant for thorough and comprehensive research before committing their capital.

Consider the absence of investment advisors among a significant portion of small and medium-sized investors. Instead, they rely on publicly available sources for their due diligence, often revisiting the Asset Management Company (AMC) website for verification and validation of information. This underscores the importance of a user-friendly and informative online platform.

The importance of “Welcome back”!

Considering this, are AMC Digital Experience Officers monitoring potential investors on the AMC website, diligently tracing their navigational journeys and monitoring their progress through forms? Furthermore, are returning visitors afforded the facility to seamlessly resume their activities from the point of their previous interaction, or if they are compelled to commence anew with each visit?

Leveraging analytics for the purpose of scrutinizing website traffic and personalizing user experiences emerges as a critical practice. This endeavor serves as a tangible demonstration of the fund's unwavering commitment to facilitating and enhancing the investing process for potential investors.