For asset managers, easy experience is key to winning advisors' businesses

While digital accessibility and returns are crucial for asset managers seeking financial advisors' businesses, it'll take more to maintain those relationships business, according to the latest research from JD Power.

In its 2024 US Advisor Online Experience Study, JD Power found advisors prize the “ease of doing business," second only to investment returns, when it comes selecting asset management partners.

"Returns will always be important,” Craig Martin, executive managing director of wealth intelligence at JD Power, said in a statement. “But when enhancing brand perceptions... ease of doing business and seamless interaction between digital and traditional channels is the key."

That shift in priorities could prove crucial as advisors become increasingly jealous with their relationships. From JD Power's vantage point, Martin says advisors are now working with an average of seven firms, down from eight over the previous years.

JD Power's U.S. Advisor Online Experience Study drew from a poll of more than 2,000 advisors, benchmarking their satisfaction on 18 asset managers including BlackRock, Vanguard, Fidelity, State Street, and Schwab.

Among all advisors in the study, nearly two-fifths (37 percent) identified ease of doing business as a primary factor. That perception is shaped to a degree by their digital experience, JD Power said: just 18 percent of advisors who reported a poor digital experience said ease of doing business was a primary reason for selecting their asset managers, compared to 26 percent of those with an excellent digital experience.

And despite the increased focus on digital in recent years, the research confirmed it pays to have more arrow in the quiver of communication strategies. Less than 7 percent of advisors say they prefer to have a single channel to engage with their asset manager partners, while a majority use a multichannel mix that includes digital platforms (56 percent), email (70 percent), phone or video calls (73 percent), and in-person meetings (55 percent).

“As advisors consolidate their asset manager relationships, they are increasingly investing with those who make it easiest for them to do so,” Martin said.

Asset managers looking to boost their digital engagement efforts with advisors may also want to ask whether their wholesalers are doing their part. While expectations for wholesalers have traditionally revolved around their product expertise – which is certainly an asset for alternative investment education – 37 percent of advisors report that they receive no assistance from wholesalers on using digital tools, leading to lower satisfaction on the digital front.