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Asset managers build momentum by standing out in a crowd, says Cogent Research


While investment performance remains paramount, advisors are also placing greater importance on understanding, and recognising, asset managers’ unique investment processes or expertise in specific asset classes.

This shifting focus has resulted in a re-ordering of firms that are gaining momentum among advisors in the marketplace, according to a recent study by Cogent Research, a division of Market Strategies International.
DFA leads the pack of six mutual fund managers that appear positioned to increase their share of mutual fund assets in the coming year. This and other findings are included in the recently released Cogent Report, Advisor Brandscape, which is conducted annually among a nationally representative sample of over 1,700 financial advisors in the US.
Cogent produced an Advisor Investment Momentum (AIMTM) score for 24 leading mutual fund providers, based on advisors’ stated intent to either increase or decrease investments with those firms. This year, the average AIMTM score across all two dozen providers was +27, with results ranging from a low of one to a high of 45. Ratings were determined by calculating the net intent to increase or redeem investments among users of each firm, then indexing the results along a continuum from +100 to -100. Following DFA, other leading firms include PIMCO, Vanguard, Franklin Templeton, Ivy Funds, and T. Rowe Price.
As reported in the study, the leading firms in investment momentum correspond to the firms with the strongest satisfaction ratings in the area of company investment philosophy, which has increased in importance to become the top driver of advisor loyalty this year. Investment performance remains critical, but serves more as a table stakes criterion than an accelerant to loyalty or brand differentiator.
“Providers with the strongest investment momentum are successfully communicating their firm’s distinctive investment philosophy,” says senior director Meredith Rice (pictured). “Couple that with advisors becoming increasingly focused on portfolio diversification and risk management, and the stage is set for moving assets to managers that have something beyond a simple performance story to tell.”
Rice also notes that, overall, advisors anticipate significant increased use of non-US equities, emerging markets, and alternatives over the next two years.

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