Brand trust is the leading driver of mutual fund purchase consideration, and a new study from Cogent Reports reveals which mutual fund companies are the most trusted by advisors.
According to the 2015 Advisor Brandscape report, an advisor’s trust in an asset manager has the greatest impact on whether they will consider investing with that company in the future.
“Trust is particularly important now, at a time when the product landscape is changing so quickly,” said Meredith Lloyd Rice, senior research director at Market Strategies and lead author of the report, said in a statement. “Whether it’s new product adoption, concentrating assets with a new set of managers, or expanding the use of solutions like model portfolios, trust becomes a huge factor.”
As Cogent Reports found, an advisor’s trust often exceeds other – more traditional – purchase drivers, like reliability, consistency of performance, or information and guidance.
Cogent’s report is based off a web-based survey among a representative cross section of 1,390 registered financial advisors from following distribution channels: RIAs, national wirehouse brokers, regional brokers, independent planners and bank representatives. Respondents were required to have an active book of business of at least $5 million and offer investment advice or planning services to individual investors on a fee or transactional basis.
(Related on ThinkAdvisor: 10 Top Performing Mutual Funds in First Half of 2015: Morningstar)
Interestingly, among national wirehouse brokers, regional brokers, independent planners, and bank representatives the most trusted brands are all the same. What’s notable is that, among RIAs only, Vanguard and DFA are the more preferred brands.
“It’s clear from these findings that even some of the biggest asset managers still have their work cut out for them in building greater trust among RIAs,” said Rice. “But with so much focus on this increasingly important channel, we expect nothing less than an all-out effort to win that trust.”
Here are the top 10 most trusted mutual fund companies across all channels.
The Dimensional Fund Advisors Mutual Fund Family has $292.8 billion in total assets (not including money market assets) as of June 30, according to Morningstar data. Its trailing rate of return is 3.23% year-to date.
9. First Eagle
The First Eagle Mutual Fund Family has nearly $74.1 billion in total assets as of June 30, according to Morningstar data. Its rate of return is 2.48% year-to date.
8. T. Rowe Price
The T. Rowe Price Mutual Fund Family has $629.1 billion in total assets as of June 30, according to Morningstar data, with a rate of return of 3.86% year-to date.