Consumers are catching on. T. Rowe Price won't release details, but Gannon said the industry trend is that use of such services doubles every six to 12 months. When Fidelity started its interactive Web site in January 1997, it had about 30,000 visits a month. Today, the site has 9 million visits a month, said Stephen Killeen, senior vice president of interactive services at Fidelity, who said that 17 percent of Fidelity's mutual fund transactions are made online. Fidelity would like customers to do basic research on funds via the Internet and then use Fidelity's telephone crew to answer more complicated questions.
Funds have good reason to steer customers to the Internet, according to mutual fund analysts.
Creating an online service is costly, but fund analysts say that over the long term it should save money on providing information and executing trades. But Michael Gazala, senior analyst at Forrester Research Inc., a technology research firm in Cambridge, Mass., said interactive sites may help consumers demand that the savings be passed on by allowing them to shop around and compare. Another benefit for funds is that they can collect more information about investors online, both by asking questions directly about investment goals and by keeping track electronically of how a consumer uses the site. Financial service providers have only begun to scratch the surface of potential Internet investment, Gazala said. A recent Forrester survey showed that only 13 percent of consumers who are online have used the Internet to buy stocks and bonds or mutual funds.