Cerulli: 57% Of Advisers Choose Asset Managers Based on Client Service Quality
As financial adviser practices extend their competitive positioning beyond investment management, Cerulli Associates said the practices’ reasons for selecting asset management partners remain partially rooted in factors that may be outside of a wholesaler’s control, including historical product track record (66%) and firm reputation (53%). Advisers, however, also identify an area that is very much within a wholesaler’s control as the second most important reason they choose an asset manager: the quality of client service (57%).
Cerulli’s research – published in The Cerulli Edge – U.S. Advisor Edition, 4Q 2024 issue – also showed that poor client service is the top reason advisers cite for terminating a relationship with an asset manager.
According to Cerulli, a strong relationship between an adviser and a wholesaler significantly influences client service perception. Cerulli recommended that distribution teams take a more consultative approach to building relationships, as they may provide more meaningful value and earn them more time with advisers. Sixty-five percent of advisers reported having an in-person meeting with wholesalers at least quarterly.
A combination of virtual and face-to-face meetings will remain critical to maintaining successful partnerships. Cerulli’s research stated that advisers meet with wholesalers just as frequently in person as they do virtually (1.7 times per week). Just 26% of advisers reported having no virtual meetings with wholesalers, compared to 16% who do not engage in in-person meetings.
Despite a market oversaturated with webinar offerings, 68% of advisers reported using webinars to obtain information from asset managers at least quarterly. Emails (30%) and newsletters/blogs (10%) were reported as the most common channels through which advisers consume content from asset managers on a daily basis.
“Providing access to as many resources as possible – virtual or online – helps asset managers deliver better client service,” said Andrew Blake, associate director. “Technical expertise and product knowledge increasingly are proving to be a differentiator for asset managers. Whether through wholesalers educating advisers on more complex products or by bringing an adviser-facing product specialist to a meeting, advisers value being educated as part of receiving good client service, and the additional level of technical insight can go a long [way] toward creating adviser loyalty.”
Other reasons advisers cited for choosing an asset manager included a consistent style of investing (53%), a strong established relationship (39%), and popular marketing techniques like thought leadership content (24%) and quality of the digital experience (20%). Additionally, advisers stated that the most valuable wholesaler resource was competitive product information (41%).
Advisers also estimated that they expect to allocate more of their clients’ assets into alternatives, moving from the current 2.3% to 3% by 2026. Similarly, many alternatives managers expect to significantly increase the portion of assets sourced via retail channels to nearly one-quarter of total assets managed (23%) in the next three years.
Headquartered in Boston, Cerulli Associates is an international research and consulting firm that provides financial institutions with guidance in strategic positioning and new business.
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