The financial advisor business is all about relationships and personal connection, and not just with clients. According to a recent study from Cogent Research, more advisors have a strong personal connection with American Funds than with any other mutual fund company. They feel the same about iShares when it comes to ETF providers and Jackson National when it comes to variable annuity providers.
Cogent asked advisors which fund company do they feel the strongest connection with, and 16% said American Funds. The rest of the top five in descending order were Franklin Templeton Investments, BlackRock, J.P. Morgan, Fidelity and Oppenheimer Funds (the last two were tied).
When posed the same question about ETF companies, 37% of advisors voted for iShares. The next was Power Shares. There was a tie for third between State Street/SPDR and First Trust. Vanguard was fourth and ProShares and Wisdom Tree tied for fifth place.
And with variable annuity companies, 24% of advisors said they felt the best connection with Jackson National. The rest of the top five pecking order were Prudential; MetLife; AIG/Sun and America/VALIC (which tied for fourth); and Nationwide Financial.
“Relationships matter,” said Linda York, research director at Cogent in Cambridge, Mass. “In the case of American Funds and iShares, trust and familiarity built up with advisors over many years has and will continue to sustain these market leaders against the onslaught of competition. For Jackson National, which overtook Prudential this year on this measure, it is proof that building a strong connection with advisors can actually propel a company to the top.”