Five asset managers -- American Funds, BlackRock, Fidelity, Franklin Templeton and Lord Abbett-- have achieved the best ranking for external wholesaler efforts in the latest market survey by Cogent Reports.

What sets these firms apart, according to the research findings, are above-average penetration by the firms' wholesalers among advisors and a relatively high impact of these wholesaling efforts.

Another 27 firms, the report notes, also experienced high-impact, but not the same broad reach as these firms.

The impact of ETFs as a tool for wealth management is partly one reason, as Cogent researchers say the widespread acceptance of ETFs have added to a "heightened fee sensitivity," among advisors.

A second survey report released by the Financial Planning Association says that ETFs have surpassed mutual funds in popularity with advisors, with 81% of advisors surveyed stating they used or recommended ETFs versus 78% who said they used or recommended mutual funds.

The industry-wide shift toward ETFs - most of which are lower-priced, index-based investments - reflects the steady move of the financial advisory service towards a fiduciary standard of care for clients, says Cameron Thornton, a planner in Burbank, Calif.

"If, in fact this push toward fiduciary is going to become a reality," Thornton says, "I think an investment advisor needs to look at the lowest-cost investment vehicles for their clients."

Thornton has gone through his own evolution toward lower-cost investments in the 33 years since he started his firm, he says. "When I started in the business in 1982 I did use load mutual funds. It's a reality," he says.

Then he moved into no-load mutual funds and then institutional mutual funds before switching to low-cost funds from Dimensional Fund Advisors, with fees ranging from 5 to 25 basis points, he says.

Thornton says he uses ETFs mainly to give his clients exposure to real estate investments at a low cost while maintaining liquidity.


The Cogent Report research, produced by Livonia, Mich.-based Market Strategies International, identifies three aspects that it measures wholesaling efforts: awareness, impression and overall consideration.

Apart from the top five firms, nine firms joined the external wholesaler ranking: Nuveen Investments, Pimco, Allianz Global Investors, Delaware Investments, AB (formerly AllianceBernstein), Nationwide, T. Rowe Price, Russell Investments and DFA.

Regardless of the traction ETFs are gaining against mutual funds, the report notes the continued importance of wholesalers for any product producer.

"Wholesalers are extremely effective in increasing top-of-mind awareness, impression and consideration among core targets for mutual fund offerings," the report states. "When comparing advisors who saw an external wholesaler to those who did not, mutual fund wholesaling achieves an average "lift" between 40 to 55 percentage points across the three critical metrics."

Mutual fund wholesaler contact provides nearly doubles the lift of any other type of sales and marketing touch, Cogent reports. "Developing robust wholesaling teams requires a significant investment compared to other efforts, and leveraging a mix of efforts that optimizes the cost/ benefit ratio is clearly critical to maximizing purchases."

The most effective mutual fund wholesaling team in the first quarter achieved a 51-point lift on impression, while the least effective wholesaling team achieved only a 19-point lift, Cogent notes.

Firms likely earning above average satisfaction ratings, Cogent researchers note, are highly regarded for providing business-building ideas and timely problem resolution. 

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