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.

In Brief: The Garden picks CDs to take on daily creative leadership

Plus, Naked names two new leaders of its own and Digital Ethos comes to Canada.

The Garden promotes two creative directors

ACDs Lindsay Eady and Francheska Galloway-Davis have taken over responsibility for day-to-day creative leadership at The Garden after being promoted to creative director roles.

The pair will also help develop the agency’s creative talent, formalizing mentorship and leadership activities they have been doing since joining the agency four and three years ago, respectively. In addition to creating the agency’s internship program, the pair have worked on campaigns for Coinsquare, FitTrack and “The Coke Challenge” campaign for DanceSafe.

Eady and Galloway-Davis will continue to report to The Garden’s co-founder and chief creative officer Shane Ogilvie, who is stepping back from daily creative duties to a more high-level strategic role, allowing him to focus on client relationships and business growth.

Naked Creative Consultancy names new creative and strategy leadership

Toronto’s Naked Creative Consultancy has hired Yasmin Sahni as its new creative director. She is taking over creative leadership from David Kenyon, who has been in the role for 10 years and is moving into a new role as director of strategy, leading the discipline at the agency.

Sahni is coming off of three years as VP and ECD at GTB’s Toronto office, where she managed all the retail, social and service creative for Ford Canada. She previously managed both Vice Media and Vice’s in-house ad agency Virtue.

Peter Shier, president of Naked, says Sahni’s hiring adds to its creative bench and capabilities, as well as a track record of mentorship, a priority for the company. Meanwhile, Kenyon’s move to the strategy side, he says, makes sense because of his deep knowledge of its clients, which have included Ancestry and The Globe and Mail.

Digital Ethos opens a Toronto office

U.K. digital agency Digital Ethos is pursuing new growth opportunities in North America by opening a new office in Toronto.

Though it didn’t disclose them, the agency has begun serving a number of North American clients, and CEO/founder Luke Tobin says the “time was right to invest in a more formal and actual presence in the area.” whose services include design, SEO, pay-per-click, social media, influencer and PR,

This year, the agency’s growth has also allowed it to open an office in Hamburg, Germany, though it also has remote staff working in countries around the world.

Moray Hickes was the company’s first North American hire as VP of sales, tasked with business development in the region.