Market Strategies International


Cogent Reports: DFA, Vanguard, T. Rowe Price, DoubleLine and American Funds Earn Strongest Loyalty among Growing Segment of Fee-Based Advisors

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. 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. DFA, Vanguard, T. Rowe Price, DoubleLine and American Funds earn the strongest loyalty among this increasingly important target market. While consistency of fund performance and having a distinctive company investment philosophy remain critical, fees and expenses offer the greatest potential to enhance loyalty among users who are predominantly fee-based. These and other findings are from Advisor Brandscape®, a Cogent Reports™ study released by Market Strategies International.

“Firms overlook this group of advisors at their peril,” said Meredith Lloyd Rice, a vice president at Market Strategies and author of the report. “We’ve heard from many advisors who feel the DOL fiduciary ruling is pushing them toward a fee-based compensation structure. For mutual fund managers seeking to secure and strengthen relationships with these high-end producers, highlighting consistent, long-term investment performance and value for the money is even more important to convey.”

Active mutual fund managers also have an opportunity to emphasize their firm’s distinctive investment philosophy and strong performance in asset classes, with the highest growth potential including US equities, non-US equities, US fixed income and emerging markets.

“During this period of industry disruption, strengthening advisor loyalty is more critical than ever,” said Linda York, senior vice president at Market Strategies. “We see many advisors consolidating the number of asset managers they work with, along with home offices beginning to limit the number of investment managers on the platform. Firms that have built the strongest levels of advisor loyalty are much less likely to be dropped.”

Top 10 Mutual Fund Company Loyalty Scores

(Base: Current Users; 75%+ Fee-based Advisors) 
  1.  DFA (Dimensional)
  2. Vanguard
  3. T. Rowe Price
  4. DoubleLine
  5. American Funds
  6. J.P. Morgan Funds
  7. MFS Investment Management
  8. BlackRock 
  9. Legg Mason 
  10. Franklin Templeton
Source: Market Strategies International. Cogent Reports™. Advisor Brandscape®, June 2016

About the Advisor Brandscape® Report

Cogent Reports conducted an online survey with 1,460 financial advisors from January to March of 2016. 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 replay of our webinar, Readying for the Financial Advisor Future.

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