TD clicks ahead with Internet-based mutual fund

While most mutual fund marketers have set aside a portion of their budgets for Internet-based advertising and marketing, TD Bank has taken things a step further with the launch this RRSP season of Canada's first Internet-based mutual fund. The TD 'eFund'...

While most mutual fund marketers have set aside a portion of their budgets for Internet-based advertising and marketing, TD Bank has taken things a step further with the launch this RRSP season of Canada’s first Internet-based mutual fund.

The TD ‘eFund’ completed its national rollout last month. To date, it is the only Canadian fund sold exclusively over the Internet. The fund charges about half the fee investors would normally pay if they bought a similar fund through a bank branch. It also offers e-mail investment advice and live Web-chat.

‘To retain our current customers and attract the growing number of Web-savvy investors, we have to be able to offer them investment vehicles in the manner they are demanding – and they are demanding it over the Web,’ says Patricia Lovett-Reid, TD Asset Management director of communications.

As the Canadian mutual fund market continues to consolidate, marketers are scrambling for ways to entice new investors and retain their current clients. While the market rebounded somewhat – February saw the strongest mutual fund sales in nearly two years, with $6.5 billion in net sales – last year investors redeemed a whopping $1.3 billion, according to the Investment Funds Institute of Canada.

About 40% of eFund’s investors are new clients who have not transacted business with TD bank before, says Lovett-Reid.

The TD bank has long positioned itself as a leader in online financial services. Its Internet discount brokerage, TD Waterhouse, is huge, with more accounts than its three Canadian competitors combined.

However, investors are not flocking to the Net to determine where to invest their RRSP dollars, says Al Hay, president of Toronto-based Burwell Hay Market Research.

Only 13% of those surveyed said they logged on to the Internet to investigate RRSP investment opportunities. While this figure has doubled since 1997, it still represents a small minority of investors.

‘Canadians still prefer to talk to their financial advisors face to face rather than log on to the Internet,’ says Hay.

That is reflected in the advertising strategies of many mutual fund marketers. Even for TD’s eFund, promotion on the Internet has taken a back seat to more traditional forms of advertising, says Angel Kasparian, TD Asset Management director of marketing.

While there was some limited banner advertising, the lion’s share of the budget went to print ads in The Financial Post and The Globe and Mail’s Report on Business with support from advertising in computer publications.

‘It is still a big question how effective the Web is in marketing our products,’ says Kasparian. ‘We are not sure how we can translate the clickthroughs that we get into money in our pocket.’

That’s a sentiment echoed by other mutual fund marketers.

Virtual bank ING Direct introduced its first line of mutual funds earlier this RRSP season. While the funds are not yet sold over the Internet, ING plans to add that capability soon, says Stacey Grant-Thompson, ING senior vice-president of marketing.

While ING’s Web site is highlighted in all its advertising efforts, the company still looks to traditional channels such as television, out-of-home and direct mail to promote its offerings, she says.

‘The Internet for us is still mainly an information medium rather than a branding medium,’ she says.

AGF Management, for its part, uses its Web presence to inform consumers about its products and services and keep current clients up to date with their investments. Traffic on the site has exploded to 400,000 hits this current RRSP season from only 20,000 hits a year ago.

From Karen Howe’s dining table: Creativity, COVID and Cannes

ICYMI, The Township's founder gathers the best of the best campaigns and trends so far.

Cannes Base Camp

By Karen Howe

I’m attending Cannes from the glory of my dining room table. There’s not a palm tree in sight, yet inspiration and intel are present in abundance.

Cannes Lions is a global cultural pulse check. The social course correction in the wake of the murder of George Floyd and BLM has delivered far greater diversity in the judging panels as well as the work. And we are all better for it.

I’m proud to say that creativity defeated COVID, which speaks to its power. Great work and big ideas flourished, despite unimaginable odds.

The work from the past two years spans a vast emotional range. From the profundity of Dove’s “Courage is Beautiful” to the hyper exuberance of Burberry’s “Festive,” they are opposite ends of the spectrum, but each answered a need in us.

Take note, the ascendency of gaming cannot be understated. Smart brands have embraced the channel. It makes sense, because gamers participate to meet others around the world, not just to play. And they represent a huge and powerful community. That’s why QSR Wendy’s gamified their iconic gal in RPG’s Feast of Legends.

Burger King sponsored the unknown Stevenage Football Club, transforming the team into online heroes and vaulting BK into the fray at the same time. Once again, the brand embedded itself in culture.

The birth of gaming tourism arrived when Xbox snuggled up to travel guides and created a brilliant baby: a travel guide for gaming worlds. It, too, embedded itself in culture.

From the standpoint of social good, Reporter Without Borders showed how it worked with Mindcraft for its “Uncensored Library” to bypass press censorship, with Minecraft providing a loophole to a space where young people could be educated. It provided youth with a powerful tool to fight oppression: truth.

COVID changed us in unexpected ways. We learned how to pay attention again and there was a notable lack of 30-second commercials. Instead, longer format content thrived. Apple’s WFH was seven minutes long. Entertainment reigned king, so we find ourselves returning to our advertising roots.

Seeing competitive brands form partnerships was one of this year’s other great surprises. The brilliantly simple “Beer Cap Project” by Aguila to reduce binge-drinking saw the brand reach out to competitive beers to join in. Aguila put incentivizing (keyword: free) reminders to drink water, eat food and get home safely on its bottle caps from all sorts of fast food chains, ride-share co’s and H2O brands.

On a personal level, I’m so proud of Canada again this year. Given that it was two years of work from all over the world being judged, even making the Cannes shortlist was an accomplishment. Canada is herding in the Lions in tremendous numbers – and it’s not even over. Fingers are crossed.

KAREN-HOWE-PIC-higher-rez-300x263Karen Howe is a Canadian Cannes Advisory Board Member and founder of The Township Group