June 16, 2015

13 fund attributes wanted by advisors

I recently met with my friend Charlie Dixson at CNBC who hand delivered a copy of their recent study on financial advisor media outlook and usage. This annual study provides insight into the thought process and preferences of financial advisors with regard to their media consumption and knowledge of ETFs and fund families.

One theme caught my attention:

Most advisors agree brand and customer service attributes such as reputation of the fund family (92% of advisors), company is a firm I know and trust (92%), responsive to advisor (82%) are important.

Surprisingly, it appears sales and marketing strategies don't play significant roles. For example, only half of advisors say company providing third-party educational, research and value added content (56%), quality of company's marketing materials (49%), and caliber of the company's sales force (45%) are important.

This is where studies don't tell the whole story. Sales and marketing are designed to strengthen reputation and trust. Although advisors may not admit they are influenced or appreciate fund firm communications and attempts for engagement in this study, they probably are.

It's like when my 2.5 year old son tries to get up on the chair "all by self" and doesn't realize my hand is on his upper back guiding him into the seated position.

Other interesting themes from the study:
When it comes to recommending investment products, the basics such as performance (93% of advisors), approach to managing volatility (92%), and fee structure (92%) are important.

Corporate messages such as longevity of company (80%), strength of company leadership (72%), and portfolio manager is personally invested in fund (62%) are important.

Finally, it appears fund companies are spending too much effort in the wrong areas. Many fund firms believe it is important to have a variety of product line. But that is only important to only 56% of advisors. The risk, especially for boutique firms, is to lose sight of what your firm is all about.

Email Charlie Dixson at CNBC to learn more about the advisor study.

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