A measly 10 per cent of global investment fund companies offer an information app for use by their investors or potential investors, according to MyPrivateBanking Research’s latest report.

A measly 10 per cent of global investment fund companies offer an information app for use by their investors or potential investors – a finding linked to the fact that these players still rely heavily on intermediaries to promote their funds, according to MyPrivateBanking Research’s latest report, Mobile Apps for Fund Management 2014 – A Critical Channel to Reach Investors.

When asked by WealthBriefing if MyPrivateBanking Research has observed that a lower number of fund managers are providing apps compared to wealth managers in the industry, Carmela Melone, an analyst at the Swiss firm, said this was “absolutely” the case.

“They yet have to realise that through an own mobile app they have the possibility to re-gain control over their marketing strategy. Wealth managers, however, are a lot closer to their clients – most have already experience in developing apps as well as other digital channels,” Melone said.

That said, the research showed that many of those fund managers who do offer apps are getting it right. Having analysed and ranked the mobile apps of 20 leading fund managers globally, the Swiss research firm crowned Invesco the mobile app winner, with an overall score of 41 points out of a maximum of 50. Namely, Invesco was praised for the information it provided about the firm’s funds, as well as for an outstanding interactive investor tool and for its professionalism in design and content.

Rounding out the top five are: Franklin Templeton (38); Vanguard (36); Pictet Asset Management (33); and T Rowe Price (32). Franklin Templeton, MyPrivateBanking Research said, stood out with its excellent fund look-up functionality, sophisticated graphics and user friendliness. Vanguard was recognised for its strength in the provision of expert comment, research and analysis, and was rated the best-performing app in terms of integration with other social media.

(The other fund managers analysed were: AMP Capital; Barings; CM-CIC AM; DeAWM Active; Fidelity; Henderson, ING fondsen; JP Morgan AM; iShares by Blackrock; Legg Mason; Natixis; Nordea; Nuveen; PIMCO; and UBS.)

The headline finding that only 10 per cent of fund managers provide a mobile app is based on the P&I/Towers Watson world’s 500 largest asset managers ranking, Melone said. “Of those we could identify 21 meeting our criteria for being included (one requirement being that the fund management company holds a minimum AuM of $50 billion, for instance).”

“Although we believe that the investment fund industry as a whole is being worryingly slow to invest in mobile deployment, our Top 5 ranked fund managers demonstrate a variety of impressive achievements to serve the investing public with mobile apps,” said Francis Groves, senior analyst at MyPrivateBanking Research.

“However, the clock is ticking for the vast majority of fund management companies. If the fund companies’ apps are not in investors’ pockets, other financial players’ apps will be and fund companies will lose out in the near future as a result,” Groves said.

The findings echo those published in another recent report by the firm, that private banks have proved sluggish in embracing the power of apps. Only a small number of large retail banks have made significant progress in their mobile app offerings since last year’s report, it said. The firm told this publication that fear of the unknown and concerns about how different client segments would react to technology might be holding some firms back from taking a faster route. Christian Nolterieke, of MyPrivateBanking, when asked by this publication why banks are not making more progress, responded that “no one doubts anymore the importance of opening up to the mobile channels and therefore the willingness to spend money exists,” (see more here).

“MyPrivateBanking sees this slow uptake of mobile in the fund management industry as a threat to the success of individual fund management businesses,” the firm said, adding that mobile applications are “too important a marketing tool” for fund companies to ignore given heightened industry competition.

Shortcomings

Based on its latest research, MyPrivateBanking identified a raft of shortcomings in the app strategies of the fund managers examined.

Firstly, only 14 per cent make their apps available on the most important app platforms - iOS, Android, Microsoft Phone/Blackberry) – although 43 per cent offer at least iOS and Android versions, it said.

Second, just 12 out of the 21 apps evaluated provided downloadable, up-to-date fact sheets and only 57 per cent of all apps scored the maximum achievable points for covering all relevant fund information.

Meanwhile, the firm said that none of the apps obtained full points for communication; even among the top five – all of which met the criteria of telephone number provision - only 17 per cent provided a messaging or chat function.

Lastly, only half of the apps provided basic information on security and/or privacy policy while fewer still - a third - of those allowing for personalising the app in some way (such as with fund watch lists), offered password protection, for example.

Recommendations

In light of the report, MyPrivateBanking Research recommended a number of steps for the fund management sector to take.

It said most fund managers fail to see that apps are “more than a gimmick,” and are a way to engage existing clients and meet new potential investors. However, getting the basics right is essential, it said:

“Fund manager companies need to serve their mobile investors in three essential ways: firstly, providing easily accessible and comprehensive fund data, secondly by giving investors access to the best of their expert comment and analysis and, thirdly by including investor education materials.”

Meanwhile, it recommended that firms spend time on ensuring a user-friendly design, which it acknowledged can be a challenge and complicated by product names and masses of content (the app may need to cater for investors in numerous domiciles, for instance.)

“Providers need very robust development strategies, including, for example, user testing, to guarantee good apps that are well received in their target market,” the firm said.

When asked by this publication how much work and maintenance is generally required in the provision of a mobile app of this nature, Melone said that it depends.

“The work required for developing a fund management app depends on the [range of] jurisdictions that need to be met, the operating systems to be supported, the breadth of features destined to be included (multimedia, interactivity, informational depth…) and a whole lot more variables that should be considered beforehand,” she said.

“Thus, the development of a mobile app can vary between a few days and several months. But regardless of the initial development effort, we have observed regular updates after 6-9 months, which is usually sufficient.”