Van Kampen Funds Inc. became the first mutual fund company to have its website awarded the PricewaterhouseCoopers BetterWeb seal of approval, while several others are in the process of getting their own BetterWeb seals.
Designed to allay consumer fears about privacy and security online, web seals have been popping up on online commerce websites across the Internet, primarily in the form of the Trust-e seal and the Better Business Bureau BBB Online seal. Compared with other businesses, however, relatively few mutual fund companies have applied for web seals, until now.
A number of mutual fund companies, including Oakbrook Terrace, Ill.-based Van Kampen and applicants such as Putnam Investments Inc., Scudder Kemper Investments, Invesco Inc., Phoenix Investment Management Co. and First Union Corp., have shown interest, says Chris Cornwall, who heads the Pricewaterhouse seal's investment unit.
BetterWeb addresses the areas where consumers perceive the most risk in online transactions, such as ordering products and shipping and delivery, says Maryann Murphy, head of the BetterWeb Program.
Other issues include how information collected about the consumer is used and protection of information being transferred or stored.
"What we're doing is coming up with a fairly rigorous disclosure standards program whereby online organizations can obtain a license to display the BetterWeb seal if they agree to follow the disclosure practices," Ms. Murphy says.
The three- to six-week application process includes a "gap analysis," evaluation of the website against the BetterWeb standards and questionnaires filled out by the applicant. PriceWaterhouse also offers consultation on how to make recommended changes.
Ms. Murphy says she hopes BetterWeb provides disclosure standards that industries like financial services can rally around so that "consumers know what to look for."
Van Kampen opted for the BetterWeb seal because shareholders would recognize the Pricewaterhouse name, says Steve Messinger, senior vice president and director of e-commerce and strategic planning. In applying for the seal, adds Mr. Messinger, the firm was trying to get "more of our shareholder base comfortable with performing routine transactions online."
The biggest concern among Van Kampen clients, he said, was security. "We wanted to make sure that from a security standpoint, they felt like their transactions and the communications between their PCs and our servers was as secure as possible."
Mr. Messinger has noticed an increase in online transactions at Van Kampen since December, but he wouldn't say the seal was responsible. Van Kampen has done a series of mailings highlighting web transaction capabilities and has asked service representatives to talk up the website more. Also, he said, tax season generates more web activity.
