Getting Biz from Advisor Buzz

At the 2013 SunStar Strategic Client Conference for Mutual Funds: Energizing Your Growth Strategy, Bob Hermann, Managing Director at Discovery Data, and John Meunier, Managing Director of the Syndicated Division at Cogent Reports spoke on ways to use data to target advisors.

Discovery Data is a database offering a single consolidated view of the financial services industry, including 34,000 firms and over 2 million professionals. Hermann highlighted their new Market Insight dashboards, which include interactive charts utilizing the history of their data. He remarked on several trends he’s noticed, including the decline in number of broker-dealer reps but rise of RIA reps. This has been a steady increase except for blips related to regulatory issue that led to more registration/filing of reps. Currently, there is approximately $55 trillion in the RIA market, with only a small portion of that being purely retail. “Independent RIAs may be better target for boutique funds as these advisors are competing against big guys and seek unique products to compete with,” Hermann said.

The Market Research Reports by Cogent Research are created by carefully evaluating current market trends, demographics, industry analysis and other information that affects how the market behaves. Cogent actually surveys advisors via Discovery’s data, which helps them publish their reports, including their Advisor Landscape Report, which comes out annually in June. “We’ve seen an increase in fee based compensation, and about 60 percent of advisors’ compensation comes from fees,” Meunier said. Also, 75 percent of advisors are now selling ETFs, with 12 percent of their total AUM coming from this space. When it comes to maintaining advisor loyalty to your firm, it’s important to score high for metrics such as honesty and performance. “There is an opportunity to attract new advisors who don’t yet have loyalty to particular firms,” he explained. In their surveys, Cogent asks advisors what new products they’ve been using the past few months to gauge potential interest in new products. One trend he has noticed is that advisors don’t want wholesalers who don’t take the time to learn their businesses and how new products may work with their strategy—not doing your homework as a wholesaler is an immediate turnoff. Also big firms are looking to create boutique style solutions because they recognize the opportunity it provides, but this just adds to your competition as a boutique firm.