When it comes to a mutual fund company's success with branding and client referrals, financial advisors can play a key role.
Advisors can help fund providers boost their distribution levels by building solid reputations within the advisor community. "Having a good reputation with advisors can go a long way because it tends to spread," says Steve Savage, managing partner at Litman Gregory just outside San Francisco. "The advisor community is very close-knit where there is a lot of referencing and comparison of notes."
For the last nine years Phoenix Marketing International has released a semi-annual study to determine advisor ratings of the top 10 fund providers based on overall impressions and likelihood to consider recommending their products to clients. The Rhinebeck, N.Y.-based research company released findings from its latest financial advisor study on Feb. 26 and will be conducting its next research with fund companies in April.
The Phoenix analysis conducted in the last decade underscores the important role financial advisors across a variety of channels can play in aiding fund managers' successes. Many in the asset management industry have stepped up their marketing efforts in recent years with advisors hoping to boost their business and credibility in the marketplace. Carl Uttaro, senior research analyst and product manager at Phoenix, says while fund companies still target consumers in television ads, campaigns directed at advisors mainly in print trade publications can have a more specific message. Uttaro also emphasized that advisors can be an effective messenger of a fund manager's offerings to investors because of the trust they have with clients.
"Advertising toward advisors can be a lot more in-depth because they are such experts," says Uttaro. "An advisor's endorsement is always going to be powerful."
Uttaro pointed to BlackRock and Franklin Templeton as two fund managers who have performed well in recent years with targeted advertisements toward advisors introducing certain products. Both companies rate in the top 10 brands among all advisor channels surveyed in the Phoenix study.
BlackRock scored the best among the advisors surveyed who work at national full-service brokerage firms while Vanguard was tops from the registered investment advisor channel. American Funds came on top in the independent broker/dealer, insurance broker/dealer and regional broker/dealer categories.
The Phoenix study polled advisors who considered a number of attribute ratings for fund providers on factors such as brand consistency, product pricing and client trust. Asset managers were also scored on the advisors' likelihood to consider recommendation to their clients in the next six months.
Nationwide Funds has communicated with advisors through multiple channels including its "Let's Face it Together" digital and print ad campaigns along with social media channels through Twitter and LinkedIn. "In today's 24/7, mobile-friendly society advisors want access to information and tools in numerous ways, says Michael Spangler, president of Nationwide Funds. "We've listened to their input to deliver resources and services in ways their asking for it."
Education Campaigns
Andy O'Rourke, managing director and chief marking officer at Direxion, says communicating with advisors about the New York-based firm's lineup of alternative strategy mutual funds has been an increased focus in the last five years. Direxion has geared most of its outreach efforts toward education in the form of webinars and direct emails to those who express interest in their products. O'Rourke says wholesalers will also often attend industry conferences and hold face-to-face meetings with advisors while handing out printed material.
"We're building a brand with our marketing efforts but in terms of our individual advisors, they are our brand," says O'Rourke, who prior to arriving at Direxion in 2007 was director of distribution marketing for MassMutual Financial Group's Retirement Services division. "Our marketing to advisors is focused primarily on education."
Promoting Research to Advisors
Litman Gregory, which provides investment advisory services in addition to operating the Litman Gregory Masters Funds, works closely with advisors promoting the company's research offerings. Savage says while his team won't promote the firm's own products to its advisors due to its RIA platform, outreach is still done to advisory channels through seminars and conference calls to inform about what research can be provided. The more than 1,000 advisors signed up for Litman Gregory's AdvisorIntelligence research service have played an important role in communicating what the firm can offer the investment community, Savage explained.
"We have a great relationship with a number of advisors," says Savage. "We have gotten very good traction in the RIA space."
Savage attributes advisor support as a major reason why the Litman Gregory Masters Alternative Strategies Fund has more than $700 million in assets since opening on Sept. 30, 2011. He emphasizes though that without robust offerings, advisor support will become more of a challenge for fund managers.
"Fundamentally the most important thing is that you have quality products and that you are well run," says Savage. "That has to come first."
