Advisers unsatisfied with asset managers during pandemic: Survey

Advisers said they are looking for investment ideas, portfolio construction and marketing support

The COVID-19 crisis has permanently changed the way financial advisers conduct business, and those new realities are also altering the tools and services advisers need from their asset managers.

According to a new survey, some providers aren’t keeping up.

Most advisers acknowledge a lasting new normal with greater reliance on virtual client interactions, less time in the office and a more challenging environment for prospecting, according to date from Broadridge Financial Solutions released Monday.

However, advisers remain unsatisfied with their asset managers throughout the pandemic. Only 10% of advisers believe that asset managers added more value during the pandemic and 22% of advisers said asset managers were less helpful.

“It raises a storm flag for the asset management community that serves the adviser,” said Broadridge’s principal of distribution insights Matthew Schiffman. “This adoption of technology and ability to work almost anywhere and maintain one’s practice will have a significant downstream impact on the way asset management companies engage with advisers and advisers engage with their clients.”

More than two-thirds of advisers (70%) say that the COVID-19 crisis will have a lasting, long-term impact for their practice, according to the survey conducted during July and August polling more than 400 financial advisers with at least $10 million in assets under management. Even one year from now, 58% of the advisers surveyed expect to work at least partially remote.

“In one of the most stressful markets in anybody’s memory, you would have thought asset managers would have been successful in reaching out and providing information to advisers,” he said. “The stats are distressing.”

What are advisers looking for from their asset managers? The top three services advisers are looking for include: investment commentary, portfolio construction and marketing resources.

At the top of that list, according to the survey, is investment ideas. “It’s a complicated world that we’re navigating across the board, from the geopolitical ramifications and the news cycle being nonstop — advisers want to be able to give their clients a level of comfort.”

Next, advisers have made it clear they struggle with technology in terms of expanding their practice with prospects, Schiffman said.

Notably, 86% of advisers agreed they have been able to host productive virtual meetings with clients, however, only 66% agreed that they’d been able to have that same level of productivity with prospects, according to Broadridge.

“That’s a 20-point swing, which means there’s an opportunity for asset managers to provide content and help advisers extend their reach through technology,” Schiffman said.

The demand for more client engagement tech tools has been evident. Last Wednesday, Wealth management broker-dealer Oppenheimer announced the development of a new digital adviser-client web-based portal, which is expected to launch during the first half of 2021.

Other firms, like Merrill Lynch Wealth Management, have recently rolled out web-based portals that allow advisers to better collaborate with their clients. Merrill introduced their new tech-driven workstation, Client Engagement Workstation, in June.

“I would strongly urge the asset management community to continue to build programs that advisers can use with their clients and prospects to extend their reach and engagement,” Schiffman said.

Moving forward, smaller asset management firms may have a competitive advantage to gain market share as the pandemic has leveled the playing field for smaller asset management firms as they can be more agile with technology adoption compared with larger firms with complicated legacy systems, according to Schiffman.

“In our opinion, we’re seeing the playing field in asset management has tilted in favor of David over Goliath,” he said.