Financial Advisers Rank American Funds, Vanguard as Top Asset Managers

Advisers are most swayed by trust, performance and ease of business when evaluating a manager, according to ISS Market Intelligence.


Financial advisers identified five brands— American Funds, Vanguard, BlackRock, JP Morgan and First Trust—as best-in-class asset managers in a new survey from ISS Market Intelligence, which, like PLANADVISER, is owned by Institutional Shareholder Services Inc.

The survey, released Wednesday, indicated that the three most critical factors in assessing an asset manager’s brand are trust, performance and ease of business, ranked in that order by advisers. Ease of doing business placed higher than factors such as risk management, fees, thought leadership and many others.

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ISS Market Intelligence revealed that the top factors tended to dovetail with advisers’ evaluation of best-in-class managers. For example, advisers who identified First Trust as the best-in-class brand assigned higher importance to ease of doing business. Meanwhile, advisers who named American Funds as best in class placed greater importance on trust.

The research found 86% of advisers said a strong brand was an important factor when recommending asset managers to clients. A strong brand was particularly important to wirehouse advisers (90%). Nearly one-quarter of all advisers felt that a strong brand held “extreme” importance.

Almost 60% of advisers ranked the external wholesaler as “very effective” or “effective” at conveying an asset manager’s brand. They ranked externals before thought leadership, websites, media and other brand messaging mechanisms. Registered investment advisers, however, placed more confidence in a firm’s thought leadership.

On the topic of thought leadership, advisers of different age groups had different preferences on consuming content. About 40% of advisers reported that they listen to podcasts on financial topics. Younger advisers and RIAs, who the survey defined as those under 40, listened to podcasts more than their older peers.

Managers with sub-brands had to consider how they presented the core brand as opposed to their affiliate or subadvisor brands, the survey found. More than half of advisers, 58%, did not believe employing sub-advisers or having a multi-affiliate approach affected brand positivity. However, 26% of advisers did think the approach had an impact on a firm’s brand.

The ISS Market Intelligence Market Metrics Brand Perception and Podcasts Survey, conducted in March, was based on interviews with 802 U.S.-based financial advisers.

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