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Cogent Reports: Active Managers Here to Stay

Despite the growth of fee-based advisors and reported death of active management, new research shows a resurgence for particular active managers. This year, a handful of active managers rival low-fee providers known more for their passively managed investment strategies for advisors’ mutual fund dollars. These and other findings are from Advisor Brandscape®, a Cogent Reports™ study released by Market Strategies International.

American Funds, PIMCO and T. Rowe Price are three active managers gaining ground with fee-based advisors, having successfully weathered past downturns by maintaining a strong, consistent brand identity. American Funds earns the strongest associations of any provider with “is a company I trust,” “consistent performance” and “is a leader in equities.” PIMCO enjoys a strong advantage in “is a leader in fixed income.” While Vanguard remains the undisputed leader in “good value for the money,” American Funds and T. Rowe Price rank second and third, respectively, both having improved their ratings over the past two years.

“Asset managers that are known for particular asset classes have an opportunity to promote their expertise, but it’s about more than that,” said Meredith Lloyd Rice, a vice president at Market Strategies and author of the report. “The market leaders have been continuously communicating their strengths and reinforcing their brand identity with advisors for many years, and that, in turn, builds advisors’ trust.”

“Active managers that have historically been more focused on commissioned advisors must now work to strengthen relationships with fee-based producers,” said Linda York, a senior vice president at Market Strategies. “Firms that stay true to their value proposition will be most credible when making this transition.”

Top 10 Mutual Fund Companies in Overall Consideration among Fee-based Advisors* 

2017

2016

1

1

American Funds

2

2

BlackRock Funds

3

4

Vanguard ▲‘16‘15

4

3

Franklin Templeton Funds

5

5

Fidelity Investments/Advisor Solutions

6

6

PIMCO Funds ▲‘16‘15

7

7

J.P. Morgan Funds

8

10

T. Rowe Price ▲‘15

9

9

OppenheimerFunds

10

8

MFS Investment Management

 * 50%+ fee-based advisors with at least $25 million in AUM

▲= Significant increase in rating from stated year
Source: Market Strategies International. Cogent Reports™. Advisor Brandscape®. June 2017.

About Advisor Brandscape®

Cogent Reports conducted an online survey with 1,355 financial advisors from January to March of 2017. In order to qualify, respondents were required to have an active book of business of at least $5 million and offer investment advice or planning services to individual investors on a fee or transactional basis. Cogent Reports set quota targets and weighted the data to be representative of the overall advisor universe using the Discovery Data Financial Services Industry database as a sample source. Market Strategies will supply the exact wording of any survey question upon request.

For more findings from the Advisor Brandscape report, watch a pre-recorded webinar, Advisors Adapting to the New Normal.

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