Style Consistency, Portfolio Manager Access Valued by Research Analysts Ahead of Minimizing Fees
NEW YORK (August 30, 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 release of two studies surveying U.S.-based financial advisors and research analysts on their needs and satisfaction with the asset managers with whom they work. The ISS MI Market Metrics Mid-Year Advisor Satisfaction Survey, a mid-year update to the ongoing Selling Retail Investment Products Through Intermediaries research series, was undertaken in June and July and is based on responses from 1,800 advisors across the wirehouse, regional, independent, bank broker/dealer, and RIA channels. The ISS MI Market Metrics Gathering Assets Through Broker Dealer Research Departments Report, undertaken in Q2, is drawn from interviews of 130 research analysts from 37 research departments across the wirehouse, regional, independent, bank, and RIA/third-party channels.
The Advisor Satisfaction Study findings underscore the influence of performance, responsiveness, and fees on advisors’ assessments of asset managers, echoing the ubiquitous business quality, service, and price framework. Predictably, performance consistently tops the list of the most important attributes advisors consider when evaluating asset managers, with 55 percent of advisors rating performance as extremely important – a small uptick from year-end 2022, when 52 percent gave performance the same rating. Notably, client service does not lag far behind, with 47 percent of advisors rating inbound telephone support to be extremely important. Inbound email support likewise ranked among the top factors, with 38 percent of advisors considering it an extremely important attribute.
Reflecting the broader industry shift towards lower-fee funds, few advisors (2 percent) considered minimizing fees to be less important than other factors, and nearly half (45 percent) deemed minimizing fees to be extremely important. However, minimizing fees was less correlated with advisor satisfaction (as measured by their likelihood of recommending a manager to a client), than were performance, responsiveness, style/category capabilities, and several other factors.
Close to two-thirds of advisors placed importance on innovative products – a factor introduced to the study this year – including more than 21 percent of advisors deeming novel products to be extremely important. Participating advisors ranked First Trust as the most innovative firm with a net score of +46, versus an average net score of +21.
The study also looked at whether advisors expect to increase or decrease client dollars invested with asset managers over the next 12 months. First Eagle (+55) scored highest among managers, with nearly 60 percent of advisors working with them expecting to increase client dollars invested with them over the next 12 months.
The Gathering Assets Through Broker Dealer Research Departments Report surveyed influential research analysts across the wirehouse, regional, independent, bank, and RIA/third-party channels to provide insight into their needs, priorities, and satisfaction with their current asset manager relationships.
Style consistency topped the list of respondents’ 14 most important needs in asset managers with whom they work, with 70 percent of analysts rating style consistency as essential. Fifty-eight percent of analysts regarded portfolio manager access as essential, while 56 percent gave meeting gatekeepers’ qualitative screening criteria tied to investment process and objectives the same rating. By contrast, minimizing expenses ranked ninth on the list of essential attributes with just 24 percent of analysts rating it as essential, well below responsiveness which 40 percent of analysts considered essential.
The study also measured home office analysts’ satisfaction with the frequency and quality of asset managers’ outreach and support. Analysts reported the highest satisfaction with the most frequent level of contact (seven or more proactive communications per year). John Hancock, Allspring, and Invesco garnered the highest ratings for overall responsiveness, with 56 percent of home office analysts rating John Hancock’s responsivity as excellent. Columbia Threadneedle stood apart for its portfolio manager responsiveness, with 70 percent rating it as excellent, compared with 43 percent on average for the peer universe.
The study also asked analysts about their experience with client portfolio managers (CPMs) at different asset managers, including how often they met with CPMs in person and the number of times CPMs communicated to them by phone over the last 12 months. When asked to think about the best CPMs they work with and what they do better than other CPMs, nearly two-thirds of analysts responded that they were “knowledgeable,” ahead of those that responded “communicate” (15 percent), “available and responsive” (11 percent), and “seamless with PMs” (8 percent).
Learn more about ISS MI’s Market Metrics Selling Retail Investment Products Through Intermediaries research series and Market Metrics Gathering Assets Through Broker Dealer Research Departments Report here.
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.
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