Archive for July, 2009

Poll: Fund Industry Confident in Its Post-Crisis Strategy

Wednesday, July 15th, 2009

Published in Ignites – An Information Service of Money-Media, a Financial Times Company
By Greg Shulas

Fund industry professionals overwhelmingly believe their firms are well positioned to deliver product and services that satisfy investors’ post-financial crisis needs. That’s according to a majority of Ignites poll respondents.

Roughly 73%, or 177 voters, said their firms are well situated for the retail investing environment that’s been shaped by the economic downturn. That made it the topsentiment expressed in the Ignites survey on how well prepared fund professionals believe their firms are for a more challenging business environment.

Of the majority, 41%, or 99 voters, said their firms are well positioned for the post-crisis landscape, while 32%, or 78 voters, said their companies are very well positioned.

Meanwhile, a mere 11%, or 25 voters, said their investment companies are at acompetitive disadvantage, making that the poll’s least popular option.

Approximately 16%, or 39 voters, gave their firm mixed reviews, saying that the investment company’s preparedness is no better or worse than their peers.

The survey’s findings differ from a recent KPMG study of global investment executives in which 65% said their company’s top management lacked vision and posed a major obstacle to change during the financial recovery.

Further, 90% of U.S. respondents polled had no confidence in their firms’ upper management. The KPMG study’s respondents included investment managers and institutional investors, such as insurance companies, pension funds and sovereign wealth funds. The retail investors it surveyed included wealth managers and family offices, the latter being an advisor group which mainly serves sophisticated high-net-worth investors.

In contrast, the Ignites poll reveals a mutual fund industry that’s largely united in its postcrisis strategy.

Ignites has reported how fund companies have responded to market turmoil by developing new products and strategies that complement the needs of a more skeptical and conservative investor base.

Investment companies have explored developing retirement income funds that seek to provide steady income and relative stability through a form of guarantee, as well as funds that are less correlated to the equity and fixed-income markets.

Investment companies also have been tailoring their wholesaler and customer support services to address investors’ and end-clients’ concerns about investment losses and future financial planning

Andy Klausner, founder of AK Advisory Partners, a strategic consultancy serving the wealth management industry, says mutual fund companies are wise to distinguish themselves as providers of best-of-breed client servicing ideas to advisors.

“These ideas should not only include talking points on the performance of their particular funds, but more importantly general servicing ideas that will help them with their entire book of business, as this will help build advisor loyalty to them,” Klausner says.

Precisely 241 Ignites subscribers participated in the survey as of 3 p.m. Tuesday.

The poll is an unscientific sampling of Ignites’s audience. Readers voted only once on a voluntary basis. Ignites’s audience consists of money managers, service providers and financial advisors.

Poll: Most Assets Follow Advisors to New Firm

Wednesday, July 1st, 2009

Published in FUNDfire – An Information Service of Money-Media, a Financial Times Company
By Gregory Shulas

Wealth advisors who leave for a new wealth management firm can expect to bring over the bulk of their existing clients’ assets during the transition. That’s according to a majority of FundFire poll respondents.

Roughly 62%, or 351 voters, said that half or more of an advisor’s assets move with them upon switching firms. That made it the top sentiment expressed in the FundFire poll on the percentage of assets that follow advisors who switch firms.

The majority sum included 42%, or 236 respondents, who said 50% to 75% of the advisor’s book make the jump to the new firm, as well as 20%, or 115 voters, who said 75% or more of assets come over during such transitions.

In contrast, 38% of the respondents, or 214 voters, indicated that less than 50% of assets follow an experienced advisor leaving for a new firm.

Of the minority tally, nearly one-third, or 167 voters, said 25% to 49.9% of existing assets leave the old firm with the departing advisor, while just 8%, or 47 voters, said less than 25% of client assets make the switch.

The FundFire poll’s findings contrast with a recent Wall Street Journal report that suggested only 25% of client assets are following departing advisors, compared to 50% in the past. This, the Journal said, coincides with a trend where clients are reportedly sticking with wirehouses when advisors depart, instead of moving with them.

High-net-worth investors are increasingly having second thoughts about making such transitions with their advisors, says Andy Klausner, founder of AK Advisory Partners, a strategic consultancy serving the wealth management industry. The hesitance can be attributed to how the credit crisis has decimated investor confidence levels, he says.

“Before, clients would go with advisor without thinking about it. Now they are giving a lot of thought to this,” he says. “Clients are becoming smarter. The trust factor is not what it was.” However, Klausner notes that most advisors will not leave a firm if they know at least 50% of clients won’t go with them.

As of 3 p.m. Tuesday, 565 FundFire subscribers participated in the survey.

Participants were self-selected and were only able to vote once. While wealth advisors were the poll’s main target, other FundFire readers had the ability to vote. The publication’s overall audience consists of asset managers, institutional investors, consultants, financial advisors and service providers.