MutualFundWire.com: Fee Chats Are Critical for Dalbar Awards

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Friday, December 16, 2011

Fee Chats Are Critical for Dalbar Awards

Dalbar just gave executives at six mutual fund firms and a distributor something extra to smile about this holiday season, thanks to professional customer service and proactive discussion of fees.

On Thursday the Boston-based consulting firm named BlackRock [profile], Deutsche Bank's DWS [profile], JPMorgan [profile], Lord Abbett [profile], New York Life's Mainstay [profile], Primerica, Power Financial's Putnam [profile] and Aegon's Transamerica [profile] the winners of its 2011 mutual fund service awards, recognizing superior customer service.

These winners, unlike half of the industry, make sure clients are "fully informed" about fees before any transaction, Dalbar found. And Dalbar also praised the winners for the immediate professionalism of their call center staff on 85 percent of calls (compared with 58 percent for the industry overall).

Kathleen Whalen, managing director at Dalbar, noted the likelihood that new 401(k) fee disclosure taking effect next year may spur more fee questions in the broader fund marketplace, too.

"The stark difference between them [the winners] and the rest of the industry is fairly large," Whalen told MFWire.com. "They realize that there can be some institutional differentation around creating that greater level of service interaction … They have the ability to use service as a business-building tool."

Whalen confirmed that Dalbar started the awards in the late 1980s. Dalbar uses several broad areas to evaluate customer service calls, including: accommodation, attitude, depth of understanding and knowledge, and the ability to handle "dead air."

"We're examining a total of 26 firms," Whalen said. "We do a mystery-shop type of approach, and we tap into calls … We're doing it all year-round."

Company Press Release

BOSTON, MA, Dec 15, 2011 -- Today DALBAR released the 2011 winners of its annual Mutual Fund Service Award. BlackRock, DWS Investments, JPMorgan Funds, Lord Abbett, Mainstay Investments, Primerica, Putnam Investments and Transamerica Funds emerged as the leaders in customer service in 2011.

For over two decades, DALBAR has conducted rigorous testing of service delivery and, each year identifies those mutual fund firms that were found to be above their peers in service to clients after a full year of rigorous testing.

DALBAR found the service these firms provide to be far superior to the industry at large. Two significant areas of excellence this year were:

When an investor contacts their call centers, the personnel demonstrate an immediate high level of professionalism, respect and appreciation for the relationship more than 85% of the time. This compares to an industry average of 58%.

50 percent of the industry fails to talk about fees. The award-winning firms ensure that if there is a fee or a sales charge associated with a transaction, the client is fully informed. This eliminates the element of surprise and/or gives them the opportunity to decide whether they want to execute the transaction.

"In 2012, for the first time, seventy two million people will get reporting that will clearly outline any fees associated with their retirement plan. This is sure to spill over and create questions regarding what they are paying for the mutual funds they own. The award-winning firms understand the critical nature of proactively keeping their clients informed," said Kathleen Whalen, Managing Director at DALBAR.

The Mutual Fund Service Award is based on systematic testing of customer service throughout the year. DALBAR conducts thousands of tests to measure how financial companies respond to the need for service from their customers. Companies that exceed a variety of industry benchmarks after one year of testing earn the DALBAR Mutual Fund Service Award.

DALBAR, Inc., the nation's leading financial services market research and consulting firm, is committed to raising the standards of excellence in the financial services industry. With offices in both the US and Canada, DALBAR develops standards for, and provides research, ratings, and rankings of intangible factors to the mutual fund, broker/dealer, life insurance, property and casualty, and managed account industries. Measurements include investor behavior, customer satisfaction, service quality, communications, Internet services, and financial professional ratings.