June 28, 1993
TO: TRANSFER AGENT ADVISORY COMMITTEE NO. 36-93
RE: 1993 MUTUAL FUND QUALITY OF SERVICE SURVEYS
__________________________________________________________
The Investment Company Institute is pleased to invite independent transfer
agent organizations to participate with mutual fund organizations in two
comprehensive studies of mutual fund service quality. Independent transfer agent
participants will receive the results of the studies in exchange for
participating in the funding of the studies and providing assistance with
questionnaire completion to participating fund group clients that request it.
As you know, the services offered to mutual fund shareholders play an
increasingly important role in their decisions to retain and add to existing fund
investments. Because most mutual funds have little face-to-face contact with
their shareholders, providing quality service presents special challenges to the
mutual fund industry. Therefore it is essential that the industry monitor both
the range and quality of services provided to mutual fund shareholders, and
shareholders' evaluations of those services.
Scope of Research
In response to strong member interest, the Institute will conduct two
comprehensive studies of mutual fund service quality in 1993. The Institute's
Operations Department will work with Coopers & Lybrand to perform Study I which
will present data collected from mutual fund organizations on products and
services offered to shareholders and will measure the quality of service in
several areas including telephone servicing, written correspondence, and
transaction processing. Study I will update and improve upon the ICI study
issued in 1990, Mutual Fund Service in the 1990's and will provide additional
creative analyses that will be useful to both independent transfer agents and
fund company executives in evaluating service quality.
The Institute's Research Department will perform Study II- 2 -
with Abt Associates, a research firm specializing in service quality measurement
from the customer's perspective. The key objective of Study II will be to obtain
an overall measurement of service quality, and examine in-depth shareholders'
perceptions of and satisfaction with mutual fund service. Shareholders' use of
and satisfaction with telephone service will be examined in detail, including the
types of information requested. The survey will identify the "key drivers" of
service for mutual fund customers and will identify shareholder-based service
standards. Study II will seek to update and improve upon the Institute's 1990
study of shareholders' perceptions of service, Mutual Fund Service: The
Shareholder's Perspective.
Benefits to Participants
The two ICI studies will be published in separate volumes and will provide
actionable information that is directly applicable to the responsibilities of
senior executives in the operations area of both mutual fund complexes and
independent transfer agent organizations.
Study I
In addition to quantitative measures of service quality, Study I will
include an analysis which will identify and discuss activities, functions or
operations associated with superior service within the industry. Thus,
participants will be able to conduct a meaningful assessment of their own service
quality against representative industry-wide benchmarks. The report will also
incorporate a special benchmarking analysis of telephone service activities from
an external or non-mutual fund industry perspective.
While the survey results will permit participans to benchmark themselves
generally within suitable or appropriate industry peer groups, Coopers & Lybrand
will be available on a consulting basis to perform participant-specified peer
group analysis for interested participants. Consulting arrangements should be
made through the ICI following completion of the survey.
To promote ease of participation and to help ensure accuracy and timeliness
of the data collection process, each participant will receive, in addition to a
hard copy of the survey questionnaire, a diskette containing a Microsoft Windows-
based automated version of the questionnaire. A workshop will be held to
instruct all participants on questionnaire completion. It is anticipated that
data will be collected for the second quarter of- 3 -
1993.
Study II
A key part of being a successful service provider is having an
understanding of shareholders' service expectations. The survey results from
Study II will provide an industry base to which fund companies and independent
transfer agents can refer in determining the role of service from the
shareholder's view. The data from respondents will be identified for
shareholders using the direct market and sales force channels, thus enabling
participants to focus on service evaluations within primary distribution
channels. Results will be reported on an aggregate basis. Individual fund
groups will not be identified or ranked.
Independent Transfer Agent Participant Responsibilities
The obligations of independent transfer agent participants are 1) to
furnish shareholder service data confidentially for participating fund complexes
that request assistance with questionnaire completion, and 2) to pay a share of
the cost of the survey. Only independent transfer agents that agree to
participate on this basis will receive the results of the survey.
Participant Fees
The cost to independent transfer agents of the two Mutual Fund Quality of
Service Surveys is $12,000. Participation fees will be billed during the data
collection phase of the project.
Action Requested
So that we may proceed with this project as quickly as
possible, it is important that we hear from you promptly as to your
interest in participating in the two Mutual Fund Quality of Service Surveys.
Please return the attached form to the Institute by July 16, 1993 via fax
(202/293-1058) or mail to indicate whether or not your organization will
participate. You may contact Diane Butler, Director of Operations & Fund Custody
at 202/955-3547 or Sandy West, Director of Marketing Research at 202/955-3509 if
you have any questions regarding this important industry project.
Donald J. Boteler
Assistant Vice President - Operations
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