If asset managers want to be effective with advisors in today’s competitive and changing environment, it’s important for them to personalize the advisor experience in ways that create value for the advisors. It’s easy enough to say that—nearly all asset managers would agree—but it’s much harder to know how to do this, or what good looks like. Similarly, you might ask if it’s possible to create value in different ways, or if there’s one optimal recipe for successful advisor interactions.


As we mentioned in our recent paper, it’s possible to measure the degree to which the collaboration between asset managers and advisors creates mutual benefits—referred to as the “connection quotient.” That is, advisors become champions of an asset management firm, naming it as their top firm, as the firm better tailors interactions to meet the advisors’ needs. We identified four major categories where asset managers can positively impact advisors: helping the advisors make well-informed decisions, helping the advisors achieve personal success, making the advisors feel valued, and communicating effectively with the advisor.


As a follow-up, we examined the various ways in which asset managers differentiate themselves on the value they provide to their advisors. To do so, we leveraged the responses of our recent survey, conducted in July 2017, examining the similarities and differences between firms from the perspective of their advisor champions. What we found was quite interesting for any asset manager looking to stand out among advisors:

  • The best performing firms exhibit strengths across all categories of advisor connection.
  • However, it’s possible to excel by being viewed as extremely strong in just one category. In this case, it’s extremely important that the chosen category be consistent with the overall brand.
  • Asset managers are at the greatest risk when they focus solely on optimizing their modes of communication, or when they fail to stand out for anything in particular.

We looked at 30 different areas of value creation in order to understand the asset manager/advisor relationship. As the chart shows, those areas can be broadly grouped into four categories. 


Taken as a whole, advisors see each of these four dimensions as important sources of value, though individual advisors may prefer some dimensions over others. Advisors see the top firms differentiating themselves most in terms of the education they provide. Several firms also stand out for their communication practices; others are known for the unique ways in which they support advisors.


Does this mean that asset managers always need to differentiate themselves on all four dimensions in order to win promoters? Not necessarily. As we dug deeper, we saw specific firms standing out in advisors’ eyes for different reasons.  


The educators: The first group of firms, American Funds, Vanguard, Guggenheim and State Street, appeared to focus on educating advisors, with American Funds in particular earning a high number of advisor champions for its views on investing. However, the appeal wasn’t necessarily broad—several firms in this category lacked high numbers of champions, and a high number of champions didn’t necessarily translate into a high connection quotient (CQ). It seems that focusing on education alone is a difficult path, except perhaps for firms like Vanguard, which hold a unique position in the market.


The communicators: A second group of firms, Fidelity and Oppenheimer, stood out specifically for being easy to access, and for tailoring their communication methods to advisors’ preferences. This also seems a risky path since most firms that relied solely on this dimension for differentiation were some of the weakest performers in our study. It appears that excellence in communication is, on its own, insufficient for creating differentiation.


The supporters: A third group of firms, Putnam, MFS, Columbia and Charles Schwab, stood out for their focus on supporting advisors in their own business, for their loyalty and for looking out for the advisors’ personal interests. Two firms in particular—Putnam and Schwab—rated among the very best in our CQ measure, and they were cited by numerous advisors as being firms to stick by in good times and bad. With these two firms as examples, it appears that it’s possible to create a brand around advisor centricity, but doing so requires a significant commitment to the category, focusing on a fewer number of advisors at the expense of the many.


Mixed models: Finally, there are a good number of firms whose advisor interactions were difficult to categorize in one dimension, including BlackRock, Franklin, First Trust, Invesco, John Hancock and T Rowe Price. In many ways, this is the best but riskiest position to take. This group includes some firms—like BlackRock, Franklin and First Trust—that exhibited many strengths in each area, and in turn earned high marks from a broad number of advisors. But it also includes firms that really didn’t stand out in advisors’ minds and, therefore, struggled to differentiate themselves. The lesson here is that if an asset manager aims for excellence in all facets of the advisor relationship, the asset manager had better achieve excellence. Otherwise, they risk bearing a large cost (in marketing and sales expenditures) for little benefit.


No firm in our study stood out exclusively for how they make advisors feel. While individual firms may have earned high marks in one area or another, no one firm really owned the category. Perhaps this represents an untapped opportunity for asset managers—and a sort of nirvana for brand teams to target. On the other hand, it may simply be out of reach given the current nature of asset management distribution. (We have seen mixed results, at best, on this dimension in other intermediated businesses.) Whether this category is a viable target for differentiation on its own remains to be seen.


As our research shows, it isn’t the case that asset managers must stand out across all four categories in order to win over advisors. It may be possible—even optimal—to focus on owning a single dimension of the relationship. This happens when the strategy is consistent with the asset manager’s brand, as is the case, for example, with Charles Schwab, whose focus on supporting advisors is consistent with its operational focus on RIAs. This brings us to an important point: Not all advisors are the same in what they value, so going after a sheer number of advisor champions may not always be the best recipe for success. Asset managers need a clear vision for which (or what types) of advisors they want to create connections with in order to chart out a successful connection approach and to focus their efforts efficiently.