The Internet is causing profound changes to the mutual fund industry, but sales aren't increasing on mutual fund company Web sites, according to a soon-to-be-released study by Boston's Cerulli Associates.

"There's no evidence that the Internet is increasing sales flows," said John Payne, a consultant at Cerulli and co-author of the report.

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Cerulli Associates

One reason may be the poor quality of those sites. "Most sites make it very difficult for customers to open an account" said Steve Miyao, an e-business consultant for kasina. The result is that frustrated users just go elsewhere to buy funds.

That usually means a supermarket. Previous Cerulli studies found that supermarkets are capturing a lion's share of the online mutual fund market, with Charles Schwab and Fidelity accounting for nearly 90% of online mutual fund transactions.

The fact that hard sales haven't increased on company Web sites doesn't mean that the Internet isn't playing a more general role in sales. Payne points out that "Internet sites are playing an important role in disseminating information." Those more esoteric effects are difficult to quantify. "It's hard to assess the overall impact of the Internet on sales flows," said Payne.

The Internet is also being utilized for purposes other than sales. Studies show that investors prefer multiple channels for information dissemination, and company Web sites are one of those channels. Investors are also using the Web to redeem shares and to move money between accounts.

Clearly, the Internet is changing people's investing habits. But so far, fund company Web sites aren't sharing in the boom. 

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