Advisors and Asset Managers Don’t See Eye-to-Eye on Alts

Apparently, advisors are from Mars and asset managers are from Venus.

There’s a significant disconnect between what asset managers think financial advisors want and what advisors say they actually need, according to a new report from market research firm Fuse. One of the most striking disconnects was interest in alternative investments, which was listed as a top advisor issue by asset managers. Advisors, however, placed it near the bottom of the rankings in the 13th spot out of 16 topics. Advisors also expressed far stronger interest than managers in marketing, high-net-worth client management and Social Security. Figuring out what advisors want is key if managers want to successfully market their products. Bridging the gap will also help advisors get the investment tools they need to help clients achieve better outcomes.

“I was a little surprised that managers were off the mark to the extent that they were,” said Loren Fox, Fuse’s director of research and the author of the study. “The challenge for asset managers is that many of them need to do a better job of staying on top of what advisors are really interested in.”

What an Advisor Wants

The results underscore a persistent misunderstanding of advisor priorities, Fox said. “Asset managers sometimes overestimate how important investment management-related topics are to advisors. Obviously, that’s the part of the advisor’s business that the asset manager is most keenly interested in,” Fox said. But advisors use, on average, less than a quarter of their time to manage investments, he added, and spend “much more” of their time on things like financial planning.

The two groups did see eye to eye on one thing: Access to market research remained the clearest area of alignment, with more than 80% of both asset managers and advisors having “strong” or “above average” interest. The report also found that three topics had interest differences of more than 20 percentage points:

• Referral strategies, which advisors favored over managers by 25 percentage points.
• Portfolio analysis, which advisors favored by 23 percentage points.
• Estate planning was favored by 21 percentage points.

Can’t We All Get Along? Still, there was agreement in some areas, such as the importance of tax planning and customer relationship management software. “A lot of firms will

poll advisors and get feedback from their sales team, and many will do it on an annual basis,” Fox said. “Putting it on a regular schedule is really the best way to make sure that you’re getting structured, regular feedback … It’s better to find out.”