For years, providers of managed accounts have been using various strategies to keep their names in front of advisors. Whether in the form of seminar hosting, visits from marketing reps or value-added business-building tools bearing the manager's name, most financial advisors are accustomed to receiving these kinds of benefits ancillary to the development of their practices.

Yet, partly due to recent scandals in the mutual fund industry, firms seem more determined than ever to get more attention-and business-from wealth managers. While the flap about advisor incentives, promotions or other offers is more prevalent among the fund crowd, separate account managers argue that it is still 'business as usual' with providing value-added support, one-on-one relationships, and strategic partnering and coaching.

The basics of value-added tools still exist; the level has just been "bumped up" a little. Presentations and seminars remain the cornerstone of firms' offerings to advisors, and with good reason. "It's really interesting," explains Ed Blodgett, director of private client services at Brandes Investment Partners. "Some advisors tell us that seminars no longer work, but that's not our experience. We're still hosting a number of seminars and attendance is at an all-time high, so there's clearly an interest, especially among high-net-worth advisors."

Blodgett, who oversees the development of broker-dealer and advisor relationships, summarized the thoughts of many management firms in saying that while seminars continue to be important, they are becoming more advanced and developed. Blodgett explains, "One of our formal presentations is called 'Becoming Highly Referable,' and it has techniques designed to improve referral strategies that are based on client understanding. An effective advisor has a defined investment process, but few clients understand it. Once a client understands the process and why it works, then the advisor is immediately able to increase referrals because that client will explain the process to their friends and associates."

"Best practices" is the advisors' hot dot, of course, and AIM Investments has incorporated various advisor best practices into their presentations. "We've created a series called Proven Business Strategies, which consists of mini-modules of strategic lessons and observations compiled from successful people in the financial business," explains Kamala C. Sachidanandan, senior vice president of marketing for the firm. "The lessons provide practical advice that advisors can implement right away, to help build their business."

The firm addresses topics such as "carving out a niche" and "duplicating best clients."

Increasingly, other factors, such as technology, are becoming a significant help to advisors looking to capture larger assets. To that end, money managers like Nuveen Investments are focusing on technology education in their presentations. Although the firm holds three-day workshops on stock option planning, corporate executive issues and other investment-related topics, the technology seminar seems more hands-on and popular with the advisor audience.

"It's not our goal to sell an advisor on a particular technology tool, but to teach how technology can make them more effective in their practices," offers John Nersesian, managing director of wealth management services for Nuveen. "For example, we train and teach advisors on Financeware and the benefits of Monte Carlo forecasting. We train how to generate these reports, and how to interpret and share the results."

James Seuffert, president of Lockwood, often takes the managed account industry to task for their advisor support shortcomings, but agrees that practical education is needed more than hypothetical theories and fuzzy concepts. "There's not enough point-of-sale training for these advisors," he says. "There's lots of products, but training is necessary. We've got to realize that managed accounts are much different than a mutual fund sale; we have to do more in teaching [independent] advisors how to go out and compete with Smith Barney or Merrill Lynch in this market."

Seuffert put his money where his mouth is by explaining the tone of his firm's popular Lockwood Universities. "The classes run from seven in the morning to nine at night, and there's no golf, no tennis, no schmoozing-none of that. Instead, we're teaching advisors how to explain SMAs to high-net-worth clients and how to position themselves as an independent advisor offering conflict-free advice versus what their competitors offer."

According to State Street Global Advisors, advisors don't need as much basic "know-how" as they do need help educating their clients. "We deliver material to the advisor that they can use with a client," adds Gary MacDonald, director of marketing for State Street Global Advisors. "A few years ago, everyone focused on educating advisors. But now advisors are saying, 'We need help explaining this to clients. Make it easier for me to do this.' Advisors are sophisticated, but there is a need for them to bridge that communication gap with the client."

Readin', Writin' And Research

Seminars and presentations aren't the only way firms are trying to get the advisor's attention. Another growing area in the value-added field is academic research. Many managers are actively working to build and develop a library of educational resources that are available via their Web sites. Nuveen is working to develop a library of research topics its competitors may not cover, such as enhanced indexing, socially responsible investing and foundations.

"We did an extensive event with MFS on foundations and endowments," Nersesian says. "We have a relationship with an association of small foundations because we know that's a very fertile area of interest to the advisors we want to help, so we're covering quite a bit about that market."

Likewise, Brandes recently launched a research side of their business called the Brandes Institute. "It's an independent scholarly side to the firm, and it's not tied to our in-house research area," explains Blodgett. "It studies and sponsors research on such topics as how markets behave."

As an example he explains the institute's "Falling Knives" paper, which studied how investors reacted to stocks that fell a certain percentage. The study found that investors avoid stocks that have gone down, which causes them to decrease further and create inefficiencies in the market. The study's findings suggest that many stocks with drops of 60% or more dramatically outperform for this very reason. "We constantly hear from advisors that this type of research is very helpful to them," says Blodgett.

Of course, having all these value-added tools is one thing; using them to stand out from the crowd is another. And not surprisingly, the approaches used by management firms to differentiate themselves from their competition are as varied as the firms are themselves. State Street, for example, continues to build on its existing knowledge base. "At some point you have to look at what you're really good at, and recognize that the competition is a lot stiffer when you start looking at more generic asset classes," MacDonald says. "So we tend to emphasize our strengths; like tax-efficient investing and ETFs within managed accounts, where we feel can really show how we add value."

Roxbury Capital Management, on the other hand, has identified a need for advisors that they feel has yet to be filled. "Everything that's been done so far has been geared towards helping advisors achieve performance returns," explains Jon Foust, Roxbury's director of marketing and client service. "Everybody's got a zillion training manuals on this, but [the industry is] going at it the wrong way."

Instead, advisors should be taught how to look at clients on an expense or cost basis, according to Foust. "If you have a choice between a guaranteed 10% return, and a return of 8%, but with 4% in spending savings, that's the better choice because you're really getting 12% returns. So many advisors are focused on asset growth and accumulations that they ignore the things that reduce and impact returns."

Foust and his team at Roxbury are developing the resources to become the first manager to address these issues, and they expect to have tools in this area within the next six months.

As mentioned earlier, technology is a popular way management firms try to stand out from the crowd. Both Lockwood and AIM emphasize the customization features of their SMA platforms as a key element of what they bring to the table when working with advisors.

By comparison Lord Abbett offers its Intelligence System, a technology created two years ago to provide financial advisors with a way to interact with world-class portfolio managers, as well as with tools to help find leads and prospects. The system allows advisors access to various data feeds, which pull lists of companies within certain areas-such as the small business sector or foundations-for use in obtaining new clients. The system also offers news on products and resources aligned to work with that particular demographic, such as a retirement plan proposal for small business owners, or a turnkey or tiered 401(k).

Lord Abbett continues to build the database, adding over a million 401(k) accounts in 2003. The system can be sourced by zip code, and advisors can learn the plan's provider and sponsor, along with other essential information. "It used to be that brokers and advisors would sit around a Bloomberg terminal for hours and get a list of maybe five people who were [Rule 144 stock] sale opportunities," says John Brett, director of strategic relations for Lord Abbett. "With this tool, you can generate much larger and detailed lists in a more efficient manner. It really helps in the area of business development."

But Russell Investment Group, perhaps more than any other firm, is developing new technology tools to stand out from the pack. "We've developed what we call our Portfolio Strategy Desk, or PSD," explains Greg Stark, director of sales and client services for Russell. "Essentially, we apply the same tools and analytics that we use on the institutional side of our business and apply them to existing portfolios of $3 million dollars and up."

True to the nature of value-added tools, Russell does not charge advisors or clients for the service but uses the opportunity to make suggestions regarding investments and managed accounts. Russell also offers advisors RPlan, a benchmarking tool that helps advisors compare themselves to colleagues. "It's a peer comparison tool," adds Stark. "It allows advisors to see how they fare against their peers, and it considers such elements as profit per headcount and assets under management per client." And since every advisor wants to be at the top of their game, RPlan also compares advisors with the top 25% of other wealth managers. "It truly looks at your client base as profit-per-effort-of-service," says Stark.

When it comes to value-added technology, Webcasts and access to password-protected Web sites have been the norm. In many cases this is still true, although the idea of online conferencing varies from firm to firm. "One of the things we do is make our professionals available through online resources," Brett says. "For example, our chief economist puts out a report every Friday that's e-mailed to advisors using our system." During a given month, Lord Abbett offers 12 different Web conferences with various portfolio managers, although not all are available to every advisor. "It allows us to convey the manager's experience to advisors in the field."

Seuffert, on the other hand, completely disagrees that Webcasts are worthwhile. "Most of those tools are information overload," he insists. Rather than use Webcasts and online information, Lockwood has opted to leave the flow of information up to the advisors themselves. "We've paid a lot of attention to the data, in response to requests from advisors, and we're focused on real-time decision-making tools instead of explaining what happened last quarter. There's too much of that already."

If anything has remained the same in the world of value-added tools, it's the role of the manager's marketing reps out in the field. Many of them are more knowledgeable than in years past, but they still can be counted on to make the expected office visits and sit down with clients when needed. "We've found that the concierge approach works the best," says Sachidanandan. "Advisors have different needs, and one packaged solution just won't cut it."

Despite the best efforts of management firms to stay competitive in the current environment, there's no question that the recent soft-dollar issue in the mutual fund industry has had some impact on separately managed accounts. Although no one was aware of such incentives actually occurring in the SMA field, some firms had been asked to make similar deals but declined, and preferred not to discuss the topic.

"It's difficult to measure the impact on the industry," adds Seuffert, "but the beauty of managed accounts in the world of independents is that although it's painful at times to show all the fees involved, it's all out there plain as day. But for now, it's too early to tell what, if any, effect it will have on this business."

What most managers do know, however, is that lip service to advisors is no longer acceptable by anyone, and touting product and hot performance numbers are a thing of the past. "What we do is not value-added; rather it is absolutely essential," says Nuveen's Nersesian. "Clients expect a lot out of the relationship with their advisor and, we, as asset management firms, have that same responsibility in serving advisors. Investment expertise is no longer enough."

Richmond, Va.-based veteran financial writer Allen Plummer assisted with the interviews and research for this article.