To forge better relationships with financial advisors, asset managers need to make their interactions more personal. In ZS’s new research, we collected feedback from more than 350 financial advisors to understand how advisors and asset managers grow their relationships with each other. Creating mutual benefits is the best approach, which can be measured by a new metric: the connection quotient (CQ). CQ measures the extent to which asset managers get value from the relationship through increased access, more assets and more loyalty. Advisors benefit, as well, as better relationships help them make more informed decisions, become more successful and feel more valued.


Respondents in our study ranked Putnam Investments as one of the top three asset management firms in terms of CQ. Putnam was rated, on average, about 13% higher than other top firms in terms of how the firm cares about advisors’ business and career success. Putnam also is known for its special programs, such as FundVisualizer, and its focus on marketing to advisors, which may have positively impacted its CQ score. We were also surprised that firms like American Funds, Blackrock or Franklin Templeton (selected by almost half of the respondents as providing the best service overall) were not the leaders. We contend that if these firms further enhanced their CQ, they would further consolidate their already strong brand and portfolio positions.   


I spoke with John Nickodemus, national sales manager, and Mark McKenna, head of global marketing at Putnam, to discuss their thoughts on how to build more valuable and personal relationships with advisors, and how Putnam’s sales and marketing team works together to execute this.


Q: In our study, advisors told us that they get benefits from asset managers who help them make more informed decisions, be successful, and feel valued in the partnership. What has Putnam done to help advisors in each of these three ways?


Mark McKenna: We think about our relationships with advisors at two levels: home office partnerships and advisors themselves. In both cases, we believe that listening is one of our success factors. Putnam is noted in the industry for its sales training, but specifically we train our national account managers, advisor consultants (formerly referred to as wholesalers) and others in the firm to listen hard and learn what clients are looking for. We also listen by conducting our own primary research and looking at data to deepen our collective understanding about advisors and home office personnel.  


John Nickodemus: Our approach is a terrific example of what your research uncovered. We strongly believe that we should build relationships with advisors that withstand the pressures of market cycles, regulation and other trends, and we build our relationships by contributing to advisors’ [and home offices’] success by adding value. If we can get to know an advisor and build a relationship by showing how our tools can add value to their business, at some point, we’ll have products that fit in their portfolios, too. First we deliver on the basic needs of advisors: product literature, a great website full of investment content, and responsive and respectful service. But then we add highly differentiated value to advisors based on our research and analytics. For example, a structured set of courses on how to use LinkedIn for prospecting, and tools on how to increase business with millennials and women and construct strong portfolios.


Q: How do you get all of those parts to work together? Our research found that a higher CQ and, thus, more beneficial relationships between advisors and asset managers, is a result of the whole firm’s efforts, not just the sales or marketing departments. In our study, Putnam’s score on “creates a dialogue with me across communications, where one thing builds on another” was higher than other top firms. What’s your advice for better aligning the work of the sales and marketing departments, and making this a whole-firm effort?


JN: Putnam puts a large focus on creating a dialogue with our advisors across communication that builds over time, which is ingrained in our culture. We have a mantra called One Putnam, and our advisor consultant is the outside face of the firm. We believe there will always be a place for in-person relationships. Our big wins are highly collaborative, requiring our advisor consultant’s portfolio construction analysts and members of our investment division to collaborate, while providing the most current data on the fund. When all of those pieces are working together seamlessly, One Putnam comes to life. And what makes us happiest is when a person emphatically credits his success to colleagues’ efforts.


MM: I’ll add two more points, one operational the other personal. Operationally, we bring cohesion to the organization by having a Thursday morning campaign meeting, where people from various teams such as marketing, analytics, compliance and technology discuss upcoming campaign details, long-term strategy and relationship building. All of us work together to translate data into information that helps advisor consultants optimize data and build stronger relationships. And speaking of relationships, people at Putnam have long tenures, and therefore, very strong professional and personal relationships. These relationships know no boundaries. We are as comfortable walking into a colleague’s office to discuss an issue as we are with commenting on their Facebook page.


JN: And by the way, if you’re a good salesperson, the relationship doesn’t end after you make the sale. That advisor still counts on you to keep them informed about their investments with you, perspectives on market events, data and the like. And we expect our sales people to stay engaged with advisors even when our funds appear to struggle. We believe that relationships don’t get stronger with fund performance. Rather, they strengthen because of trust, credibility, helping them grow their business, and service.  

MM: We arm our advisor consultants with a lot of information about their clients. This is an example of our usage of technology, data and analytics to help the sales team help advisors be successful. With their sales app, they get a quick snapshot of the relationship along with suggestions for the interaction. We also provide a "thumbs up or down" functionality to create a feedback loop on the suggestions.


Q: We’re believers that advisor consultants will always be part of the model, but that their role will need to evolve as distribution economics and client’s preferences change. How are you evolving your approach?


MM: We’re in the process of evolving our model to address that as we speak, by building a sophisticated, customized interface showing carefully curated information. We will be connecting many dots to provide the advisor consultants with highly valuable information. We also believe that this path will further increase the cohesion between sales and marketing.

Sales and marketing teams are working a lot more cohesively than they used to. Firms like Putnam are at the forefront strengthening this approach, which is built on a strong, advisor-focused, collaborative culture and coupled with the deft use of data, analytics and digital media. The company's approach helps them “punch above their performance.” We anticipate that as the competition for advisor and home office attention heats up, firms with higher CQ will capture a disproportionately higher share of attention and assets relative to product quality, not just performance.