Are Financial Wholesalers Going the Way of the Dinosaur?

Insights Powered by Cogent Reports™    

As technology becomes a bigger part of how financial advisors do their job, the need for external wholesalers is diminishing—at least in the traditional sense. To stay ahead of this trend, asset managers need to evaluate how well their current sales and marketing strategies meet the needs of advisors, as well as ways to leverage technology and tweak their distribution strategy to ride this impending wave of change.

Key things asset managers need to know:

  • Advisors have less time. Advisors are taking on more responsibility, enduring higher levels of scrutiny regarding how they service customers and utilizing more tools to help facilitate how they do their job. These factors have pushed a full 25% of advisors to decrease the number of wholesaler meetings that they accept. This presents the first challenge: In-person meetings have historically been a very important part of forging and maintaining strong relationships with advisors, so how do asset managers dial down the personal side of selling without putting the stability of the relationship at risk?
  • Technology is leading the way. You hear and read it everywhere. Email is the most effective and most desired form of communication, but the obvious issue is how to stand out among the hundreds of emails that land in the advisor’s mailbox. The second challenge: Email only works if the recipient is already engaged or open to being engaged. Adding another layer, if you are going to rely on email you better be sure the advisor you are trying to connect with actually prefers email. There is a whole subset that prefers social media to email. You can see in this article and video that email is not the way to engage these advisors.

Continue reading

Going Beyond Traditional Advisor Segments to Increase Marketing ROI

Insights Powered by Cogent Reports™    

All Cogent Advisor Segments

Asset managers are collecting more data on financial advisors than ever but often struggle to transform their CRM systems into relevant and meaningful opportunities for advisor outreach and engagement. Undoubtedly, the competition for the attention and assets controlled by financial advisors (FAs) is intensifying, prompting many asset managers to seek better ways to target and communicate with advisors.

Data analytics and distribution teams spend about half of their time on data acquisition and data management, with just 14% of their time on more advanced analytics that fuel advisor segmentation and sales-lead generation, according to Applying Data to Distribution, a report by Ignites Research.* Perhaps more astonishingly, the report reveals that only one-third (39%) of asset managers incorporate advisors’ content preferences into advisors’ CRM systems, and one-fifth (11%) categorize financial advisors by types or “personas” that help determine their sales and marketing approach.

The current methods for segmenting the FA population for sales and marketing tend to be broad in nature and fail to take into account important differences in the attitudes, mind-set and preferences of FAs. Often, the desire to send more-targeted, customized communication is there, but firms fall short in their efforts to implement effective strategies given the additional time and money required to create their own proprietary models. Continue reading

Ranks of Fee-Based Advisors Expected to Swell

Insights Powered by Cogent Reports™    


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

Robo-Advisors Lacking Key Human Element

Insights Powered by Cogent Reports™    

Robo Advisors Lacking Key Human Element

Everyone is talking about robo-advisors, which has caused a lot of tension among financial providers and traditional advisors, but is the popularity of these services overblown? This year, we sat down with financial advisors and affluent investors to discuss how they see the role of the advisor is changing in relation to robo-advisors. What we found is surprising—despite the perception that robo-advisors are taking over, it is clear that the actual role robo-advisors are anticipated to play is neither fully defined nor fully trusted. Investors aren’t looking to abandon their advisor relationships anytime soon.

What Investors Are Saying about Robo-Advisors

While investors may test the waters with robo-advisory services, there is still a strong need for human interaction. As we traveled the country talking to investors, we consistently heard this sentiment:

“I like the idea of robo but there’s something to be said also just for the personal contact….almost like a psychologist, just to reassure.” –An investor in San Francisco

Continue reading

New DOL Fiduciary Ruling Sparking Unprecedented Levels of Advisor Anxiety

Insights Powered by Cogent Reports™    

Advisor Anxiety

While advisors agree with the overall concept and spirit of the Department of Labor’s fiduciary ruling, concerns ring aplenty, as the vast majority have yet to be convinced that the new legislation will deliver on its intent. First and foremost, advisors lament that the DOL fiduciary ruling is casting an overall negative industry gloom and is fueling investors’ focus on fees.

Perhaps even more importantly, advisors believe that the DOL action is forcing them toward a fee-based compensation structure and limiting their product selection. As such, advisors fall into two camps: those who are already fee-based see the DOL action as formalizing an inevitable market shift, while commission-based advisors fear that commoditizing their service puts them at greater risk of being undercut by cheaper automated advice services. Continue reading

The Future of Financial Planning and Advice

Insights Powered by Cogent Reports™

S16370_Proposal Cover Image

Many forces are converging that could dramatically impact market expectations for financial planning and advice. Advances in technology, tightening fiduciary regulations and new expectations from the Millennial and Baby Boomer generations are raising the standard of investment advice and causing financial advisors, advice providers and product manufacturers to significantly adapt their strategies.

Advances in Technology

Both advisors and investors have an increasing number of sophisticated technology-based tools at their disposal to aid in making investment decisions. In fact, 33% of advisors currently offer digital investment advice to their clients through their firm’s proprietary platform and 30% of affluent investors are currently using robo-advisors.

Tightening Regulations

The DOL fiduciary rule is imposing fiduciary status on all registered representatives when providing investment recommendations and enforcing new regulations on investment advice in retirement accounts. While some are fighting these rules, others are already adapting, and distributors and providers would be wise to be proactive in adjusting their business models appropriately. Continue reading

Cutting Through the Marketing Clutter to Reach Advisors

Insights Powered by Cogent Reports™    

Cutting Through the Clutter to Reach Advisors

The age-old challenge of standing out among the marketing clutter continues to plague marketers despite a growing and evolving set of tools and data. The need to customize content is critical as advisors remain overwhelmed with both traditional and new modes of communication. How should asset managers be utilizing new marketing tools and technologies to create effective communication strategies? That’s the complex question we’re trying to answer.

Volume Persists

Advisors continue to receive a high volume of touches (100+/month) from financial services providers. In recent years, frequency was king, but that has changed. Advisors are inundated with information from all angles: email, print mail, social media, videos and apps. Processing this much information is overwhelming, which makes individual marketing campaigns much harder to stand out. If you want advisors to take note of your company, your marketing plan needs to be well above average. Continue reading

Expanding Media Reach to Investors & Advisors

Insights Powered by Cogent Reports™    

Expanding Media Reach

Despite being halfway through the second decade of the smartphone era, the most valuable source of business and financial news for affluent investors with at least $100,000 in investable assets is by far and away television (52%). This is not the case for advisors, where television (38%) and websites (36%) compete as their top sources of business and financial news. While top TV programs cited vary between investors and advisors, both audiences cite the website Yahoo! Finance most often and include Bloomberg in their top three most valuable websites.

Other digital mediums such as mobile apps and social media are mentioned by some as the most valuable source but with far less frequency. Turning to old-school mediums, print holds its ground as a third-place player, with about 1 in 10 advisors (11%) and investors (8%) choosing the medium as most valuable. Continue reading

Advisors Look to US Market for Growth

Insights Powered by Cogent Reports™


Following a year of strong inflows into international equities (and outflows from actively managed US equities), advisors anticipate a shift in their asset class use in the near future. According to the Cogent Beat™ Advisor portal, when advisors were asked in November of 2015 to anticipate how their use of 10 specific asset classes would change over the next 6 months, the greatest proportion of advisors (37%) now plan to increase their allocations to US public equities.

This represents a 54% increase from June of the same year when advisors were most likely to favor expanding their use of non-US equities (40%) and emerging markets (37%). In a corresponding finding, fewer advisors are expecting to increase their commitment to non-US equities and emerging markets at the present time compared with Q2 (down 33% and 35%, respectively). Continue reading

Advisor Enthusiasm for Smart Beta and Active ETFs Not Slowing

Insights Powered by Cogent Reports™     

Smart Beat and Active ETFs Not Slowing

As advisors’ ETF use surges and current users look for new ways to incorporate ETFs into their investment strategies, there is clearly an opportunity for traditional mutual fund managers and established ETF players to leverage this increasing market demand. To better pinpoint where this demand is coming from, Cogent Reports began tracking advisors’ current and anticipated use of specific types of ETFs in Q3 of this year. Specifically, we ask ETF producers how they expect their usage of ETFs to change over the next six months.

While the ETF category was founded on index-based products, interest now appears just as strong in other areas. During Q3 of 2015, nearly one-third (30%) of ETF users expressed a plan to increase their reliance on smart beta ETFs over the next six months, with non-users who are likely to start investing in the product contributing to this growth. Results are similar for active ETFs, with 28% of ETF producers anticipating they’ll increase their use of these products. Currently, 4 in 10 ETF users report using smart beta or active ETFs to some extent. Continue reading