Podcast Center
Video Center
Webcasts
Resource Center
Events
January 14, 2009 at 07:00 PM
Market volatility means today’s investor no longer looks at a mutual fund’s performance, but the stability of a mutual fund company and the breadth of its offerings.
Cogent Research’s Investor Brandscape 2009 analyzes what drives loyalty toward individual mutual fund companies. Findings show little importance is place upon short- and mid-term investment performance, along with performance consistence.
“Everyone understands investors want and expect to see strong investment performance. That’s a given,” said Antonio Ferreira, managing director of Cogent’s Wealth Management Group. “But in a broad market decline and in such uncertain times, investors are obviously looking for a safe harbor. Frankly, they want assurance that companies they invest with today will still be here tomorrow. And when they find a partner they trust, investors want enough options within a fund family to suit more of their changing investment needs.”
The study computes “Net Promoter Scores” (NPS) for 38 leading mutual fund companies; firms that receive the highest ratings from investors on perceived financial stability and product offerings also have the highest NPS (on an 84-point spread). On average, mutual fund companies received a rating of -29, which indicates, according to Ferreira, “Nine out of ten fund companies have more customers at risk of defecting than remaining loyal. In times like these, where positive investment performance is difficult, firms must provide or promote other offerings that address the existing mood of the market – thus, smaller or boutique firms with limited options will have a tough time maintaining loyalty due to lack of product or service breadth”
