NEW YORK (CNNfn) - Scudder does. Dreyfus doesn't. This is the age of e-trading and the time of the year when people make annual IRA contributions, but few mutual-fund companies allow you to do the job on their Web sites.
"You see a real disparity out there," said James Punishiller, an analyst at Forrester Research in Boston. "Some fund companies get it and some don't get it that the Web matters."
The Internet explosion has made it easy for millions of people to use online brokers to buy and sell stocks and funds for traditional investment accounts. Likewise, people routinely bank and shop online.
Many fund companies get good marks for Web sites that offer performance data, prospectuses, information on managers, and calculators to tell you whether or not you should convert to a Roth IRA. But fund companies often lag behind online brokers when it comes to Web-based transactions for Individual Retirement Accounts.
"Most fund companies are waiting to see how well investors embrace the Internet," said Vincent Sciplini, client manager at Dalbar Inc., a Boston research company that tracks services offered at U.S. fund companies. "They still think people like to pick up the phone."
One recent Dalbar study found that only 16 out of 60 fund companies surveyed allow investors to make new purchases for their IRAs on their Web sites. Only 19 out of the 60 allow investors to make exchanges.
Three of the companies don't even have Web sites, Sciplini said.
A variety of reasons are holding fund companies back, analysts said. For one, IRAs are highly regulated. The law requires your signature to open an IRA, and you must have the money in the account before making investments, Punishiller said. That is why you probably cannot open an IRA on any Web site, he said.
Fund companies are also nervous about security -- and building a comprehensive Web site does not come cheap, analysts said.
"Everyone wants to make money on the Web, but nobody wants to spend the money to do it," Punishiller said.
Also, some fund companies are preoccupied about preparing for the Millennium and are using most of their Internet budgets on Y2K problems, Sciplini said.
Ahead of the pack
Denver-based Janus Funds started offering investors the option of doing IRA transactions on the Internet in late 1998, said Mark Cohen, manager of Internet strategy and development. About 30,000 investors use the site daily, but the company doesn't track how many do IRA transactions online.
"I think part of 'getting it,' is understanding that every investor has different needs," Cohen said. "You're going to have so many people who want to conduct business on their terms."
T. Rowe Price, Alliance, Fidelity and Putnam also allow IRA transactions via their Web sites, officials from those companies said. You need to arrange Internet access and some type of bank transfer.
"Internet usage is growing dramatically," said Steven Norwitz, a spokesman at Baltimore-based T. Rowe Price. But most of T. Rowe Price's customers still use the 800-number to do their IRA contributions, he said.
Scudder has also seen the writing on the wall about the importance of the Web. About one-third of its retail interactions with customers in 1998 were on its Web site, whether it was queries about funds or existing accounts. That is a 21 percent increase over the previous year, said Iang Jeon, director of the company's electronic-commerce group.
Scudder recently redesigned its site to include new features such as a "Financial Concierge," which answers questions, and a portfolio tracker that will even follow holdings with other fund companies.
"For us it was more than adding features and bells and whistles," Jeon said. "There's a compelling argument for focusing on not just features or transactions, but the customer's whole experience online."
-- by staff writer Martine Costello