Meredith Lloyd Rice

About Meredith Lloyd Rice

Meredith Lloyd Rice is a vice president in Market Strategies' Syndicated division. She manages the firm’s syndicated research products focused on the financial advisor market and is the lead author of the Advisor Brandscape® report. She has more than 15 years of experience managing research initiatives in the wealth management industry and has explored a wide range of business issues on the client and supplier side. Prior to joining Market Strategies, Meredith was an associate VP at Chatham Partners where she oversaw a team of researchers and managed the overall design, analysis and interpretation of large-scale studies for institutional financial services clients. Meredith earned an MBA from Thunderbird School of Global Management and a bachelor’s degree from Colgate University. She is a former collegiate rower who now gets her exercise chasing after her 2-year-old daughter and Clumber Spaniel.

New Forces Dramatically Impact Financial Advisors

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The Future of the Financial Advisor Cogent Reports

Regardless of the uncertain fate of the DOL fiduciary ruling, one thing is certain: it unleashed new forces that will dramatically impact financial planning and advice for years to come. With many advisory firms and product manufacturers far down the road in adapting their strategies and communicating these changes to clients, it would be shortsighted for firms to fully reverse course now.

We already see advisors changing their business practices. As advisors move further toward fee-based compensation, predominantly fee-based advisors and RIAs are the only advisor segments that are growing. As a result, we’re seeing advisor-controlled assets gradually shifting toward lower-fee investment products. Compounding the challenge for asset managers, advisors are becoming less receptive to traditional wholesaler outreach and are instead seeking more personalized, on-demand support. Continue reading

Ranks of Fee-Based Advisors Expected to Swell

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Despite the uncertain fate of the Department of Labor fiduciary rule, we already see advisors changing their business practices. According to Cogent’s The Future of the Financial Advisor™ report, advisors earning at least three-quarters of their total compensation from asset-based fees could comprise half (49%) of all financial advisors by the end of 2017, up from 38% presently. This shift toward fee-based compensation is primarily being driven by advisors in the National, Regional and Independent channels. Continue reading

Financial Advisors and Investors at Odds Over DOL Fiduciary Ruling

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The future of the DOL fiduciary ruling is anything but certain. We do know, however, that the majority of financial advisors have some concerns about the ruling, with six in ten advisors (60%) favoring repeal. Advisors employed in the broker/dealer channels—particularly the Bank channel (82%)—and commission-based advisors (72%) are most likely to support repeal. In contrast, RIAs, most of whom are predominantly fee-based and already consider themselves fiduciaries, are more likely to oppose repeal (45%) than support it (29%).

Advisors Weigh in on the DOL Fiduciary Rule

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Targeting Fee-Based Advisors

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New forces are converging that could dramatically alter the advisor landscape in the coming years. As the ranks of financial advisors shrink, fee-based advisors represent an expanding segment signaling a trend savvy asset managers should act on. In fact, predominantly fee-based advisors (those earning at least three-quarters of their total compensation from asset-based fees) now comprise four in 10 financial advisors.

This segment of advisors doesn’t just include RIAs (33%), but is equally as likely to include advisors in the Independent (33%) channel with the National channel a close third (29%). Predominantly fee-based advisors represent an attractive target, managing relatively larger books of business ($152 million, on average) compared with just $71 million for commission-based advisors. Furthermore, predominantly fee-based advisors report relatively higher allocations to mutual fund and ETF products. Continue reading

Email Strategy Key to Optimizing Advisor Engagement

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Email Strategy is Key to Engaging Advisors

One of the first things many Americans do after they wake up is check their email, so it is no surprise that emails represent more than half of advisors’ reported monthly touches from financial services providers. Reflecting advisors’ busy schedules, a majority of advisors (56%) say email is the most effective method for financial services providers to communicate with them. This figure represents a significant increase over previous years, at the expense of more personal interactions. Furthermore, email is favored across all types of advisors. Continue reading

Advisors’ Go-to Firms for Thought Leadership

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Thought leadership serves as a leading driver of advisor consideration and loyalty, and is one of the most effective means of getting on a new advisor’s radar. That said, just a handful of firms stand out as go-to providers in this critical category. According to Cogent’s Advisor Engagement™ report, American Funds, First Trust, BlackRock, Jackson National and Fidelity Investments lead in thought-leadership distribution. In Q2 of this year, a majority of advisors said they received/downloaded thought leadership materials from these five firms in the past three months.

In terms of consumption, half of advisors read thought leadership materials from First Trust (51%), followed by 42% from American Funds and 37% from both BlackRock and J.P. Morgan Funds. In addition, First Trust had the greatest proportion of advisors who shared its thought leadership with others (19%), followed by American Funds (10%) and J.P. Morgan Funds (10%). Continue reading

Established ETF Players Outshine New Entrants in Emerging Smart Beta Category

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While historical market leaders iShares and Vanguard continue to top the list in advisor trust, well-known active managers relatively new to the ETF market—including Franklin Templeton, J.P. Morgan and Oppenheimer—rank among the 10 most trusted brands for the first time this year. Meanwhile, Fidelity ranks fifth in brand trust for the second year in a row, indicating there is market opportunity to extend trusted brands into new product categories (see the 10 most trusted ETF providers here).

That said, while these well-known active managers have a lot of potential to build upon their credibility as mutual fund providers, particularly in areas of perceived expertise, these firms still have their work cut out for them to realize their full potential in the ETF category. Continue reading

Readying for the Future

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An Excerpt from the 2016 Advisor Brandscape Report

Times are increasingly tough for those who make a living by providing others with financial advice. Public figures such as Elizabeth Warren, Suze Orman and John Oliver are blatantly challenging the value that financial advisors provide for the fees and commissions they receive, going so far as to paint advisors as villains who deceitfully take money from their clients to support their own financial interests. In addition, recent actions by the Department of Labor have made the word “fiduciary” a part of the common vernacular, calling into question the very foundation of the advisor-client relationship.

Market volatility, a prolonged period of low interest rates, the upcoming presidential election and unprecedented world events such as Brexit are heightening investors’ anxieties, leaving investors with little idea of where to turn or who to trust. Yet the need for financial advice has never been greater. Advisors are now staking their claim—and their futures—on their role on providing holistic financial planning, moving from the old-school role of a broker placing orders to a trusted partner with unique objectivity and insight. The advisor community is holding fast to the belief that this approach will continue to add more value than automated robo-advisor services that, by definition, will never completely fulfill the need for human interaction. Continue reading

ETFs Growing at Expense of Individual Securities

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ETFs Growing

The proportion of advisors selling ETFs has reached a new high at 77%, up from 68% in 2014. Fee-sensitive RIAs are among the groups most likely to be selling ETFs (85%), yet ETF use has increased significantly among advisors in the National and Regional channels, bringing their adoption levels in-line with their RIA counterparts. Increasing reliance on ETFs appears to be coming largely at the expense of individual securities, particularly in the RIA channel. Meanwhile, advisors continue to commit the largest percentage of their clients’ portfolios to mutual funds (35%).

Looking ahead, advisors expect to increase their allocations to ETFs over the next two years, while trimming back their use of mutual funds and individual securities. These marketplace dynamics are causing more asset managers to respond to advisors’ appetite for ETFs with an expanding array of products including smart beta and active offerings. The greatest proportion of advisors (38%) plan to increase their allocations to US equities, a trend which of late has tended to benefit passive managers. Yet in a reversal from last year, more advisors now expect to increase rather than decrease their reliance on US fixed income. These shifting dynamics represent an opportunity for active and passive managers to demonstrate their unique value. Continue reading

RIAs Seeking Diverse Perspectives Online

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RIAs Seeking Diverse Perepectives Online

As competition to reach financial advisors intensifies, asset managers are increasingly augmenting sales and marketing outreach with paid advertising. Advertising is a key touchpoint when building brand awareness, the first stage in the advisor journey toward consideration and usage. However, advertising is expensive, and firms often feel they lack the information they need to make smart decisions. Cogent Media Consumption™ Advisor captures advisors’ ongoing use of and preferences for all types of media, giving asset managers and their agencies critical information to inform targeted media buying strategies.

Within the website category, the top media properties visited by advisors are relatively consistent across distribution channels. Yahoo! Finance is in a heated battle with Morningstar for the highest reach (55% and 53%, respectively), followed by Bloomberg (46%), The Wall Street Journal (42%) and CNBC (38%). However, we observe some distinct differences in advisor preferences and use by channel when moving further down the list. Continue reading