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You don’t have to be told: advisors are a busy lot and easy access to investment-related information is an important matter. In fact, according to a recent survey of over 350 Investment Advisor subscribers, an overwhelming 79% of advisors indicated that they were more likely to do business with an asset management company that has a strong Web presence over a company with a weaker online offering.

The importance of the Web is obvious, but what exactly constitutes a “strong Web presence”? Many asset management companies are hard-pressed to identify and provide the types of online materials that advisors want and will actually use.

In fact, survey respondents highlighted a number of key criticisms of contemporary asset management company Web sites, spanning the three broad Web site content categories of:

- product, pricing, and performance information

- account access areas; and

- advisor support materials.

The truth is that many mutual fund companies labor over their online offerings, endeavoring in particular to develop robust but highly usable product and client account access areas. While these certainly constitute important elements of a Web site, they alone do not sufficiently support and aid advisors in advancing their business efforts. In other words, a Web site that limits itself to product information and account access is not enough to be described as a “strong Web presence.” At least, not according to 42% of survey respondents. On the contrary, these advisors expect sites to go beyond the bare minimum and provide content and features that can assist them in retaining and building upon existing assets.

These additional site features can be collectively described as “advisor support materials,” and include all items firms develop to aid advisors in their daily lives and to help them further their businesses. Items such as sales ideas, education, online tools, research, general commentary, and other business-building and practice management content all fall under the broad umbrella of advisor support.

Despite the struggles asset management companies face when it comes to generating and maintaining superior advisor support content, the value of good offerings cannot be overstated. Certainly, such content constitutes an important way for firms to help advisors forge and solidify client relationships.

Asset management companies register the craving many advisors have for quality support, and they thus invest significantly in the development of support materials. These firms understand that offering good support content has a twofold benefit: it not only improves the lives of their advisor clients, but it also elevates their standing in advisors’ minds, to the point that advisors will give them increased business.

The fact is, however, that most companies’ support offerings fall below advisors’ expectations. Moreover, this content often offends: it is too “salesy,” too basic, too product- or company-centered, or in other words, it just delivers too little to genuinely help advisors. In some cases, the problem is too much–too much bias, that is.

Firm Bias

The palpable bias inherent in many firms’ support materials was foremost among the complaints lodged against today’s support offerings in the survey of IA readers. In the words of one advisor surveyed, “I just don’t appreciate support materials that implicitly push [specific] funds. Where’s the value in that?”

While the perception of bias in many firm materials is indeed legitimate, not all firms provide such flawed advice. Of course, fund-specific advice will always be laden with details that pertain to specific products, but many firms offer sales and prospecting support of a wider scope. AIM Investments is one such example.

AIM Investments’ “Prospecting for New Business”

Going a step beyond the typical business-building fare, AIM Investments provides logged-in advisors with a list of resources for generating leads. Instead of providing its own ideas for building advisors’ business, the company offers straightforward steps for helping advisors clarify their desired clients–”by industry, occupation, location, and lifestyle,” for example. Moreover, the materials encourage advisors to consider the generalized investment concerns and objectives of their ideal client base, thereby enabling them to prospect with increased focus and relevance of messaging.

AIM’s site also links advisors to valuable third-party Web sites. Among the Web sites to which AIM offers links are those of an outside vendor from whom advisors can purchase leads, as well as links to several cost-free sites that facilitate the search for promising potential clients through various directories and events. While the firm does include drop-down links to its own materials, the principles apply regardless of the fund company whose products a given advisor chooses to use.

AIM is not alone in providing support that can be generalized across financial products, but it serves as a strong example. Other firms, such as OppenheimerFunds, offer similarly broad advice.

OppenheimerFunds’ “Advisor Exchange”

On its advisor site, OppenheimerFunds presents an area called “Advisor Exchange.” On subjects ranging from managing client expectations in volatile markets to opening your own practice, Oppenheimer showcases the experiences of actual advisors. In essence, each “exchange” contains one or two ideas–sometimes even reading recommendations–that have furthered other advisors’ day-to-day business activities. While they feature individual advisors, the pieces are usually written by the firm. Still, the insights come from the experiences of peers, thereby sidestepping fixations on particular products and firms and rarely if ever touching on Oppenheimer-specific items. Instead, the items highlight business management and development techniques that have helped other advisors succeed. Easily consumable, straightforward language helps you get the message and go.

Limited Applicability

A second major criticism of advisor support content often voiced by advisors concerns the limited sphere of clients to which most support materials are relevant. Commonly, advisors are forced to pick and choose from the materials that are present on any given asset management Web site. As one RIA in the survey put it: “I more or less cull from what’s available. The same idea won’t work for everyone, but sometimes I get great mileage from one small nugget. But most things won’t work with my clients.”

It stands to reason that not every piece of content will work with every client. However, some firms, such as MainStay Investments, make a concerted effort to provide advisors with research and support materials that can apply to many if not all of the contemporary advisor’s clients.

MainStay Investments’ “Across Generations”

In its Across Generations support offering MainStay introduces advisors to a proprietary annual survey of actual investors. For its most recent study, 515 “GenXers” (ages 23-37), 522 “Boomers” (ages 38-55), and 500 “Matures” (ages 56-71) were surveyed. Each respondent represents an upscale American with a total net worth of at least $100,000–certainly a desirable segment to any advisor. (MainStay occasionally has provided content to Investment Advisor separately on its Across Generations research, see it here.)

Among other virtues, MainStay’s study takes a deeper look at the investment attitudes and behaviors of each of the three age groups, including:

- Life values Across generations, a considerable percentage of survey respondents reported that their families and health are more important than either leisure time or careers, for example. Such information can go a long way in forging and solidifying existing relationships. Moreover, these details can aid in structuring conversations and understanding investment priorities.

- Net worth Across survey respondents, net worth is inversely related to household income. While net worth increases incrementally with age, household income diminishes.

- Investor profile In 2005, for example, most survey respondents classified their investing style as moderate (52%), followed by conservative (38%), and aggressive (10%).

It is common knowledge that generational marketing is a powerful tool, and MainStay, with its survey, validates the approach as a whole. The section featuring the survey results helps advisors identify investing styles, financial strategies, and sales opportunities for clients in each of the three segments. While this information may not directly assist advisors in matching products to clients’ needs, it does help characterize them and provides a more general sense of their priorities and investment objectives.

American Funds’ “Portfolio Planner”

American Funds’ Portfolio Planner allows advisors to build and save portfolios for their clients or prospects. While the tool is limited to American Funds’ product offerings, it nevertheless can assist advisors in developing investment solutions for clients in any life stage–those already retired, those saving for retirement, or those saving for educational costs, home buying, and more.

The tool’s first step entails determining whether a given client or prospect is in the accumulation or distribution phase. Upon making the relevant selection, advisors are directed through a four-step portfolio-generation process, as described below.

1. Enter a time horizon Advisors select from a color-coded grid with the following two axes:

- Anticipated distribution phase in years

- Current accumulation phase in years

Based on each of the above horizons, a pie chart is generated with a suggested percentage breakdown of fund types to be included in the eventual portfolio. The tool indicates recommended percentages among the following fund categories: Growth; Growth-and-Income; Equity-Income/Balanced; and Bond.

2. Indicating risk tolerance Upon establishing the given client or prospect’s time horizon, advisors are instructed to characterize the individual’s risk tolerance, choosing from the following five risk-tolerance categories: High; Medium high; Moderate; Medium low; and Low.

3. Selecting funds Based on the breakdown in the pie chart, advisors can select funds from each of the four categories, so that they add up to the designated percentage breakdown indicated within the chart. In other words, if the initial pie chart indicated that 25% of the portfolio should contain growth products, advisors can distribute weightings to any of the firm’s seven growth funds. To assist advisors in making the right decisions, a “statistical highlights” box concerning the funds appears each time an advisor mouses over a particular product. These highlights include: Asset mix; Annualized returns; 10-year standard deviation; Equity market capitalization; and A share expense ratio.

4. Reviewing portfolio A review is provided of the portfolio that has been generated, and advisors are offered links to take the following actions:

- Save the portfolio so that it appears in a list on the main Portfolio Planner page of the advisor site

- Generate a client presentation in PDF format

- Run a hypothetical of the funds contained in the portfolio

- Order related literature

When it comes to the challenge of generating portfolios, American Funds helps advisors address the needs of a diverse group of prospects, from individuals in retirement to younger men and women just starting out. Whereas many firms do indeed provide support materials with limited applicability, American Funds offers a tool with few limits whatsoever.

Last Words on Advisor Support

While many current advisor support offerings do not offer sufficient support, advisors should not disdain all asset management materials. Although quality support is hardly ubiquitous, that it exists is a point worthy of emphasis, and that it can provide genuine and significant value is a point similarly worthy of reiteration. In an increasingly “instant” and Web-oriented world, online support materials represent a mechanism for widely accessible and immediate aid when advisors need it most. More than 50% of surveyed advisors indicated that good support materials are important to them, and many have commented on the centrality of support material to their business. It is clear that, while only a few materials are used and actually leveraged in client situations, a little bit of good support content goes a long way.

Do not lose heart. Instead, continue to surf sites to locate fresh, usable materials, but make sure to inform asset managers of the materials that work best for you. Use “contact us” links to convey your enthusiasm or, alternatively, to make statements regarding your dissatisfaction. The only way for firms to learn of the shortcomings of their materials is through direct feedback. You should make specific mention of successful support content specimens to their wholesalers, to not only promote awareness of your desire for business support but also the particulars of the materials that best fit with and advance your business.

Malachi Black is a senior business analyst at kasina, a New York-based management consulting firm that seeks to advance the way financial services companies market, sell, and service. He can be reached at [email protected]. Conrad Bakker is a consultant at kasina; he can be reached at [email protected]. Several of the companies cited in this article maintain business relationships with kasina. Investment Advisor and kasina conducted this online survey of IA readers in July 2006.


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