Data & Research July 22, 2015

Advisers Factor Trust into Fund Purchases

Brand trust is the leading driver of mutual fund purchase consideration, according to research from Cogent Reports.
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Advisers depend on brand trust as a leading driver of mutual fund purchase consideration, and American Funds, Franklin Templeton and BlackRock are the brands they trust most, according to the 2015 Advisor Brandscape report from Cogent Reports, a division of Market Strategies International.

According to the report, across 10 top brand attributes, the amount of trust of an adviser for an asset manager has the greatest impact on whether the adviser will consider investing with that company in the future. Cogent Reports also found that the impact of trust exceeds that of more traditional purchase drivers such as perceptions of reliability, consistency of performance, or information and guidance.

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“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 author of the report. “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.”

The top 10 most trusted mutual fund companies in Advisor Brandscape are:

  1. American Funds
  2. Franklin Templeton
  3. BlackRock Funds
  4. Vanguard
  5. Fidelity Investments/Advisor Funds
  6. OppenheimerFunds
  7. MFS Investment Management
  8. T. Rowe Price
  9. First Eagle
  10. DFA

Across four of the five primary retail distribution channels, American Funds, Franklin Templeton and BlackRock are the most trusted brands. However, among registered investment advisers (RIAs) only, American Funds remains in the top three, trailing Vanguard and DFA.

“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,” Rice said. “But with so much focus on this increasingly important channel, we expect nothing less than an all-out effort to win that trust.”

Cogent Reports conducted an online survey with 1,390 financial advisers between January and March. Survey 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.

More information about the Advisor Brandscape survey, including purchasing information, is here.

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