On the Other Side of the Fence

Over the years, conversations with Bruce Harrington have yielded insights for Investment Advisor readers (and editors, for that matter) into areas as diverse as 529 college savings plans and retirement income planning. At MFS Investment Management, Harrington served as VP and director of product development and marketing; before then, he was a VP of retirement marketing at Putnam Investments. Now, Har- rington has a new gig as managing director of Cogent Research’s wealth management practice. He’s also supposed to think about the issues that matter to financial services distribution companies and the advisors they serve. We asked him to share some of those thoughts with us in a telephone interview conducted on July 30.

So, give me some details about your new position.

We’re in Cambridge [Massachusetts], I started July 23, and I’m going to be heading up the financial services practice. Cogent has been around for 10 or 11 years as a research firm mostly focused on the health and consumer products side; they’ve decided to diversify their business into financial services arena. My partner in crime will be Tony Ferrara, who heads up a custom consulting practice–meaning he only does engagements for specific clients. My side of the business will focus more on “syndicated” or prepackaged research reports.

What is “syndicated” research

Typically it means you’re writing a fairly detailed research report that you’re selling to many people, but you’re also providing one-on-one consulting to the people who buy the package. So, for example, a few months ago, a Cogent report came out called Investor Brandscape that was a combination of primary interviews with about 4,000 high-net-worth investors, and some detailed information about the brands of mutual fund companies that they bought, and about their loyalty to those fund companies. It was a fairly unique effort to see how “brand” interplays in the mutual fund space. If you think about Coke and Pepsi or Cheer and Tide, they certainly have a very good grasp on brand and how that impacts everything. But in the mutual fund space it’s a new phenomenon to understand what [brand] means.

By financial services companies, do you just mean mutual fund companies?

No, also distribution companies like Merrill Lynch and Smith Barney, insurance companies like SunLife or The Hartford. The interesting thing–and this goes to your question as to why I came here–I’ve been in the mutual fund business building new products and businesses for 20 years. I’ve been reading this research that whole time. I always struggled with the research: It was interesting data, but I then had to take that data and synthesize business solutions, new opportunities–I had to try to figure out how I could use it to make money for my firm. Now I want to bottle that same exercise in this business.

You’ve been a consumer of this kind of research yourself for all those years, but now you’re on the other side?

That’s a good way to look at it.

So, are financial services companies–those kinds of firms you mentioned– good users of research?

There’s a wide spectrum. There are some people who buy the research because they want to be informed about what’s going on. Then there are other people who use the research to change business strategy or the way they’re perceived in the marketplace.

I’ll give you an example. I can’t say the name of the company, but I was visiting a client last week. They’ve very much integrated the idea of brand and loyalty into all their marketing, and are driving a sales strategy based on the results of how their brand plays in the marketplace compared to their major competitors.

That’s a case where research has changed behavior.