Fund managers that can clearly and concisely articulate their investment philosophy and strategy are more likely to garner interest from advisors and attract assets.
So says Mickey Janvier, head of Wealth Management Americas for Aberdeen Asset Management.
A just-released RIA study by Aberdeen found that 59 percent of the 201 advisors that Aberdeen polled at the recent Charles Schwab IMPACT conference named clarity on the fund manager's investment philosophy and strategy as the most important attribute to consider when recommending a mutual fund to a client.
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Two-thirds (67 percent) of advisors surveyed agreed that investment products have become increasingly difficult for clients to understand, compared with 33 percent that did not believe investment products have shown an increase in complexity.
"Simple, open and honest communication from the fund manager is of utmost importance to advisors when determining which funds to invest in on behalf of clients," said Janvier, in a statement. "While this seems simple in theory, many fund managers continue to undervalue the importance of clear and concise communication with advisors about how portfolios are invested. These managers will have a difficult time remaining relevant in an environment where transparency is king."
Of less importance to advisors in recommending a fund were historical returns (19 percent), fund rankings (10 percent), fund manager tenure (8 percent) and brand name (3 percent).
However, the majority of advisors (67 percent) also agreed that these new, more complex and sophisticated products generally offer valuable benefits that can help clients achieve their investment objectives.
The survey also found that 60 percent of advisors believe the No. 1 way to stay up to date on new products being introduced by the asset management industry is through their own online research.
Other popular ways cited by advisors to get up to speed on the latest investment products and solutions were via industry trade publications (20 percent), wholesalers (15 percent) and industry conferences (5 percent).
Said Janvier: "In a world that increasingly favors simplicity and rejects excessive complexity, fund managers who can effectively leverage digital channels to help advisors understand how portfolios are invested will be the biggest winners."
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
