NEW YORK (July 3, 2023) – ISS Market Intelligence (ISS MI), a unit of Institutional Shareholder Services and a leading global provider of data, analytics, insights, media, and events solutions to the global financial services industry, today announced the results of its ISS MI Market Metrics Fintech Study based on interviews of 814 U.S.-based financial advisors. The survey, undertaken in May as part of the ongoing Selling Retail Investment Products Through Intermediaries research effort, measures advisor interest in financial technology provided by asset managers, home offices, and third-party sources.
The survey finds that more than 95 percent of responding advisors report using fintech for trading and clearing, portfolio rebalancing, and/or investment analytics. Trading and clearing were decidedly the most popular uses of fintech among surveyed advisors, as only 3.8 percent reported not using the technology for these purposes. Despite that heavy usage, there is seemingly little room for third-party fintech providers to offer their services as over three quarters of advisors reported using software provided by a home office for trading and clearing.
By contrast, investment analytics proved a more competitive area for managers and third-party firms alike, with 26 percent of reporting advisors using asset manager software and 41 percent using third-party software for this purpose. BlackRock was the most popular provider of asset manager-provided investment analytics software, used by 26 percent of survey participants – nearly 10 percentage points ahead of the second-place manager, JPMorgan.
Asset managers saw high uptake of their software in direct indexing and portfolio construction, with 24 percent and 29 percent of advisors, respectively, using asset manager-provided software for these functions. Vanguard proved to be the most popular manager for direct indexing software, with one in five surveyed advisors reporting their platform as the best, though other managers found success within specific channels. Wirehouse advisors—the most enthusiastic adopters of direct indexing relative to other distribution channels—reported Morgan Stanley as their preferred platform. Among respondents in the RIA channel, which reported the lowest use of direct indexing solutions, Schwab tied with Vanguard; 21 percent of surveyed RIAs identified each firm as their preferred managers for direct indexing software. The survey found Blackrock, which offers portfolio construction services through its Aladdin software suite, to be the most popular manager among all three channel segments for the task, with one in four advisors reporting them as their preferred provider of portfolio construction software.
Advisors also reported on preferences and concerns relevant to asset managers and third-party providers in crafting fintech solutions. Ease of use was top of mind for the vast majority of advisors surveyed, with 80 percent reporting it as a top three factor in selecting fintech tools. Survey participants similarly rated best-in-class features and level of integration, with 43 percent and 44 percent of advisors rating them as key factors, respectively. Perhaps most important to note was the relative unimportance of peer recommendations as well as existing reputation and longevity in advisors’ decision-making.
“With only 5 percent of advisors considering market longevity and 2 percent considering peer recommendations as their number one factor, newcomers to the fintech market can be optimistic that managers will seek out the highest quality product, not the most entrenched,” said Greg Bawin, Head of U.S. Research at ISS Market Intelligence.
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About ISS Market Intelligence
ISS Market Intelligence (MI) is a leading global provider of data, analytics, insights, media, and events solutions to the global financial services industry. ISS MI empowers global asset and wealth management firms, insurance companies, distributors, service providers, and technology firms by providing cutting-edge market-engagement platforms and the actionable intelligence necessary to fully assess their target markets, identify and analyze the best opportunities within those markets, and execute on comprehensive go-to-market initiatives to grow their business. ISS MI clients benefit from our increasingly connected global ecosystem that leverages a combination of proprietary data, powerful software and analytics, timely and relevant insights, in-depth research, as well as an extensive suite of industry leading media brands that deliver unmatched market connectivity through news and editorial content, events, training, ratings, and awards. ISS MI data and analytics solutions include intelligence from BrightScope, Discovery Data, Financial Clarity, Flowspring, FWW, Investor Economics, MISight, Mortgage Clarity, Plan for Life, RainmakerLive, and Simfund, and ISS MI media brands and market-engagement platforms include Chief Investment Officer, PlanAdvisor, PlanSponsor, Financial Standard, FS Sustainability, Money, and Industry Moves.
About ISS
Founded in 1985, Institutional Shareholder Services group of companies (ISS) empowers investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics and insight. ISS, which is majority owned by Deutsche Bourse Group, along with Genstar Capital and ISS management, is a leading provider of corporate governance and responsible investment solutions, market intelligence, fund services, and events and editorial content for institutional investors and corporations, globally. ISS operates on an arm’s-length basis and Deutsche Bourse has adopted Principles protecting the independence and integrity of ISS’ research offerings. ISS’ 2,000 employees operate worldwide across more than 30 global offices in 15 countries. Its more than 4,000 clients include many of the world’s leading institutional investors who rely on ISS’ objective and impartial ESG and governance research, market intelligence and fund services and data and analytics, as well as public companies focused on ESG and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS’ expertise to help them make informed investment decisions.
Media Contact:
Audrey Dedrick
Associate, Communications
press@issgovernance.com
Fintech Finds Following, but Most Advisors Remain Reliant on Home Offices, ISS Market Intelligence Survey Shows
NEW YORK (July 3, 2023) – ISS Market Intelligence (ISS MI), a unit of Institutional Shareholder Services and a leading global provider of data, analytics, insights, media, and events solutions to the global financial services industry, today announced the results of its ISS MI Market Metrics Fintech Study based on interviews of 814 U.S.-based financial advisors. The survey, undertaken in May as part of the ongoing Selling Retail Investment Products Through Intermediaries research effort, measures advisor interest in financial technology provided by asset managers, home offices, and third-party sources.
The survey finds that more than 95 percent of responding advisors report using fintech for trading and clearing, portfolio rebalancing, and/or investment analytics. Trading and clearing were decidedly the most popular uses of fintech among surveyed advisors, as only 3.8 percent reported not using the technology for these purposes. Despite that heavy usage, there is seemingly little room for third-party fintech providers to offer their services as over three quarters of advisors reported using software provided by a home office for trading and clearing.
By contrast, investment analytics proved a more competitive area for managers and third-party firms alike, with 26 percent of reporting advisors using asset manager software and 41 percent using third-party software for this purpose. BlackRock was the most popular provider of asset manager-provided investment analytics software, used by 26 percent of survey participants – nearly 10 percentage points ahead of the second-place manager, JPMorgan.
Asset managers saw high uptake of their software in direct indexing and portfolio construction, with 24 percent and 29 percent of advisors, respectively, using asset manager-provided software for these functions. Vanguard proved to be the most popular manager for direct indexing software, with one in five surveyed advisors reporting their platform as the best, though other managers found success within specific channels. Wirehouse advisors—the most enthusiastic adopters of direct indexing relative to other distribution channels—reported Morgan Stanley as their preferred platform. Among respondents in the RIA channel, which reported the lowest use of direct indexing solutions, Schwab tied with Vanguard; 21 percent of surveyed RIAs identified each firm as their preferred managers for direct indexing software. The survey found Blackrock, which offers portfolio construction services through its Aladdin software suite, to be the most popular manager among all three channel segments for the task, with one in four advisors reporting them as their preferred provider of portfolio construction software.
Advisors also reported on preferences and concerns relevant to asset managers and third-party providers in crafting fintech solutions. Ease of use was top of mind for the vast majority of advisors surveyed, with 80 percent reporting it as a top three factor in selecting fintech tools. Survey participants similarly rated best-in-class features and level of integration, with 43 percent and 44 percent of advisors rating them as key factors, respectively. Perhaps most important to note was the relative unimportance of peer recommendations as well as existing reputation and longevity in advisors’ decision-making.
“With only 5 percent of advisors considering market longevity and 2 percent considering peer recommendations as their number one factor, newcomers to the fintech market can be optimistic that managers will seek out the highest quality product, not the most entrenched,” said Greg Bawin, Head of U.S. Research at ISS Market Intelligence.
###
About ISS Market Intelligence
ISS Market Intelligence (MI) is a leading global provider of data, analytics, insights, media, and events solutions to the global financial services industry. ISS MI empowers global asset and wealth management firms, insurance companies, distributors, service providers, and technology firms by providing cutting-edge market-engagement platforms and the actionable intelligence necessary to fully assess their target markets, identify and analyze the best opportunities within those markets, and execute on comprehensive go-to-market initiatives to grow their business. ISS MI clients benefit from our increasingly connected global ecosystem that leverages a combination of proprietary data, powerful software and analytics, timely and relevant insights, in-depth research, as well as an extensive suite of industry leading media brands that deliver unmatched market connectivity through news and editorial content, events, training, ratings, and awards. ISS MI data and analytics solutions include intelligence from BrightScope, Discovery Data, Financial Clarity, Flowspring, FWW, Investor Economics, MISight, Mortgage Clarity, Plan for Life, RainmakerLive, and Simfund, and ISS MI media brands and market-engagement platforms include Chief Investment Officer, PlanAdvisor, PlanSponsor, Financial Standard, FS Sustainability, Money, and Industry Moves.
About ISS
Founded in 1985, Institutional Shareholder Services group of companies (ISS) empowers investors and companies to build for long-term and sustainable growth by providing high-quality data, analytics and insight. ISS, which is majority owned by Deutsche Bourse Group, along with Genstar Capital and ISS management, is a leading provider of corporate governance and responsible investment solutions, market intelligence, fund services, and events and editorial content for institutional investors and corporations, globally. ISS operates on an arm’s-length basis and Deutsche Bourse has adopted Principles protecting the independence and integrity of ISS’ research offerings. ISS’ 2,000 employees operate worldwide across more than 30 global offices in 15 countries. Its more than 4,000 clients include many of the world’s leading institutional investors who rely on ISS’ objective and impartial ESG and governance research, market intelligence and fund services and data and analytics, as well as public companies focused on ESG and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS’ expertise to help them make informed investment decisions.
Media Contact:
Audrey Dedrick
Associate, Communications
press@issgovernance.com
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