Financial advisors are drawn to—and increase their assets that are held by—asset managers that have outstanding digital communications, according to J.D. Power.
“Digital communication has become the most effective way for asset managers to connect with and influence the investment decisions of financial advisors,” said J.D. Power in its 2019 Advisor Digital Engagement Study. “Financial advisors who report high levels of digital engagement with a specific asset management firm are significantly more likely to increase their investment with that firm.”
J.D. Power named the top asset management firms that communicate digitally the most successfully with advisory firms. The digital engagement was evaluated across multiple channels, including email, mobile apps, podcasts, social media, webinars and websites.
"For asset management firms to be successful—or in some cases even survive—they’re going to need to deliver engaging, differentiated digital content through the right channels that helps advisors do their job better and grow their practice," said Mike Foy, director of Wealth and Lending Intelligence at J.D. Power. "As firms continue to shift more resources to digital, they need to be very strategic about how to deploy those resources to drive ROI. It’s not necessarily about replacing wholesalers with technology, but rather how to blend the two in a way that leverages the strengths of each."
The study found that advisors who have consistent digital interactions with asset management firms are more likely to invest client assets with those firms. However, 56% of advisors are engaged via email with brands they use, but utilization of all other digital channels trails significantly.
The result is that “digital leaders, many of which are among the industry’s largest players, are far outpacing most firms in the industry in engaging advisors through digital channels. [Because of this] they threaten to take even more market share away from smaller rivals."
J.D. Power asked 1,631 advisors which asset managers they have faith in and came up with one runaway favorite.
Following are the top 10 asset managers for digital engagement, in ascending order, and the percentage of advisors indicating they have high levels of digital engagement with the brand.
10. Lord Abbett, 15%
9. Vanguard, 17%
8. MFS, 18%
7. Columbia Threadneedle, 19%
6. Fidelity Investments, 23%
5. Charles Schwab, 24%
4. BlackRock, 25%
3. Franklin Templeton, 25%
2. JP Morgan, 31%
1. American Funds, 51%