Advisor Reliance on Fee-based Comp Prompts Changes in Distribution Strategies

Fact-Based Trends from Cogent Reports™    

Advisor Reliance on Fee-based Compensation Prompts Changes in Distribution Strategies

The fee-based advisor segment is one of the only advisor segments that is growing, causing ripple effects on advisors’ product preferences. In Q1 of this year, four in ten (43%) advisors said they are predominantly fee-based (deriving at least 75% of their total compensation from asset-based fees). Most notably, nearly half (48%) of National wirehouse advisors report they are now predominantly fee-based, a significant increase from just over one-third (39%) last year. As National wirehouse advisors’ compensation models begin to more closely resemble RIAs’, we observe a corresponding decline in National wirehouse advisors’ allocations to actively managed investments, from 73% in 2015 to 67% this year.

In light of these trends, asset managers that have historically been more focused on commissioned advisors must now work to strengthen relationships with fee-based producers. Product providers are responding by adding new share classes and commission schedules in addition to promoting the value of active management in particular asset classes. Firms are also ramping up their engagement with gatekeepers at large brokers/dealers as industry observers anticipate a shift toward more fee-based managed account programs. Continue reading

The Key to Success in International Marketing? Location, location, location!

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For US-based asset managers seeking to grow their institutional business overseas, the challenges are many. Asset managers deciding where to focus their efforts, which investment solutions to offer and how to differentiate their brands from those of the established local firms are all critical decisions. But the one consideration that dictates all others is location—determining which countries or regions to target. And what better way to decide where to set up shop than to pinpoint where demand for new managers is greatest?

Earlier this summer, Cogent asked pension investors across Europe how many new asset managers they anticipate adding to their lineups in the next 12 months. Encouragingly, European pensions remain interested in adding new managers to their lineups. Compared with 2014, more institutional investors are likely to add at least one manager to their lineups in the coming year. Opportunity appears greatest in the Netherlands, France and the UK. Similar to the US market, $1 billion-plus institutions are primarily driving the increased interest in new manager additions in the coming year, lending fuel to the strategies of many asset managers that are focusing on the upper end of the institutional market. Continue reading

Keeping Insurance Customers Satisfied During Catastrophe Response

Having just spent a long weekend in Central Oregon, I saw first-hand the haze of smoke from numerous forest fires filling the sky and listened to locals’ concerns about the progress of fires nearest them. This brought the routine news stories featuring a succession of natural disasters—from tropical storms along the Gulf Coast to wildfires across the Pacific Northwest to flooding in southern California—into sharp focus. Despite the certainty that these events will occur, forecasting when and where has become a multi-billion dollar business challenge for the US insurance industry. But one thing remains constant—each claim is experienced one household at a time by customers who never expected that it would happen to them.

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Relevance, The #1 Rule When Developing New Products

Relevance, The #1 Rule When Developing New ProductsWhen launching a new product, many factors impact the success of the product: timing, marketing, ease of use, availability, price… I could go on. But, across the board, one factor makes or breaks the success of a new product: Relevance.

Now more than ever, a product not designed to fit into the lifestyle of the customer will fail. The only question in those cases is how long it will take! While this is true for any industry, this is particularly the case for the financial services industry. Additionally, as FinTech changes the landscape for financial services companies, the need for new and innovative products is significantly increasing. Continue reading

Brand Stickiness: Boosting Technology Brands’ Customer Loyalty and Retention

Brand Stickiness

It’s midsummer, the season of sticky-sweet treats like popsicles and saltwater taffy. Man, these treats are good—and fun, even reminding us of childhood summers and beachy weekends away. But their appeal—like summer’s sunny skies and lightening bugs—is ephemeral. When brands strive for “stickiness,” they’re not going for this quickly-fading sugar buzz. They’re striving to capture the attention and loyalty of consumers, ultimately to become a long-term favored brand. And this long-term loyalty is really tough to achieve these days. In a time when we’re seeing increasingly fickle consumers choosing from countless options with a finite amount of time to give—how does a brand become sticky?

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Personalization Is Not a Technology Problem—It’s an Insight Challenge

Personalized shopping experience

Retailers that can’t deliver a personalized experience are at serious risk of becoming irrelevant soon. According to a study from Accenture, 75% of shoppers are more likely to do business with companies that recognize them by name, offer relevant recommendations and remember their purchase history.

This study highlights that we’re in the midst of a paradigm shift in the shopper-retailer relationship. With mobile technology and a wealth of information at their fingertips, shoppers want an experience that’s tailored to their individual needs and desires. They crave a one-to-one relationship with the retailers they do business with—and they’ll happily switch brands if that expectation isn’t met.

In the race for personalization, digital natives have an early lead. That’s because they’ve built infrastructure and business models that enable the real-time collection of data and the delivery of customer needs. But both incumbents and newcomers in retail need to realize that personalization isn’t simply a technology problem—it’s an insight problem that revolves around the customer journey.

To get personalization right, retailers need to take a step back, start from the beginning and look at the big picture. It requires understanding not just the logical aspect of purchases, but also the emotional triggers that convince shoppers to buy.

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To Reach DC Plan Sponsors, Tap The Wall Street Journal

Fact-Based Trends from Cogent Reports™    

Dozens of 401(k) plan providers are striving to increase awareness of their brands among plan sponsors, who are the ultimate decision-makers when hiring and firing plan providers or even initiating putting a DC plan out to bid. Advertising is a common tactic used to boost brand recognition, yet only 27% of DC plan sponsors recall seeing an ad for at least one of the 34 leading plan providers over the past six months. Part of the reason may be that the
ads are running in the wrong place.

Plan providers courting new business often turn to trade publications and websites to tout their recordkeeping capabilities among a targeted audience. Yet when we asked plan sponsors which print publications they read over the past six months, specifically for 401(k) best practices or 401(k) service providers, nearly half (49%) cite The Wall Street Journal. In comparison, just 13% point to Employee Benefit News and only 10% report reading PLANSPONSOR magazine.

Moreover, when asked to identify the online publications they viewed over the same period, wsj.com is just behind bloomberg.com as the most frequently cited website (30% and 32%, respectively). The New York Times, both print and online editions, is another common resource among plan sponsors, far ahead of trade-related publications such
as Pensions & Investments and HR Magazine. Continue reading

Strengthening the Patient/Provider Relationship

Strengthening the Patient/Provider Relationship

In the rapidly evolving healthcare marketplace, the role of a primary care physician (PCP) is changing. Healthcare organizations are working to surround PCPs with broader care teams—nutritionists, mental health professionals, social workers and physical therapists—to provide PCPs time to focus on the most critical patients. In addition, PCPs provide a valuable link in referring patients to a healthcare organization’s specialty care offering, leveraging the power of a unified electronic medical record, driving pay-for-performance reimbursements, and strengthening patient loyalty. It’s probably not surprising, therefore, that health systems we work with are seeking to learn more about the patient/provider relationship.

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Plan Sponsors Look to Make Shifts in Investment Lineups

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Plan sponsors’ desire to reduce plan costs is substantially impacting their approach to investment menu design and their relationships with DC investment managers. But the impact of the resulting activity varies by plan as well as by asset manager. Overall, 7% of plan sponsors intend to add at least one manager to their investment lineup in the next year. At the same time, 2% plan to drop a manager and 16% intend to do a combination of adding and dropping managers, suggesting that the future is not necessarily secure for all firms.

Plan Sponsors Adding and Dropping Investment Managers

When asked specifically about the managers they will continue to use, 29% of plan sponsors intend to award new business to existing firms while only 15% plan to pull business away—evidence that plan sponsors are concentrating their assets with the smaller number of managers they know. Continue reading

6 Ingredients for Effective Institutional Thought Leadership

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We know how challenging it can be to get the attention of institutional investors, but luckily for asset managers, there is one tool in the institutional marketing toolbox that offers the best opportunity of getting noticed: thought leadership. When done right, institutional investors will not only read thought leadership from managers they are already doing business with, but will also consume pieces from unknown managers, offering firms a way in—and a chance to build a favorable brand impression.

According to a series of focus groups and one-on-one interviews we conducted with institutional investors, thought leadership materials must have six ingredients to craft effective thought leadership materials for this exclusive audience:

  1. Timely
  2. Unique
  3. Sophisticated
  4. Engaging
  5. Objective
  6. Credible

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