After Investment Returns, Ease of Doing Business is Primary Reason Advisors Use Specific Asset Managers

Having spent the better part of the past decade re-tooling and transforming their operations to embrace digital-first methods of client communication, investment strategy development and trade execution, wealth managers want just one thing when it comes to digital engagement with asset managers: an easy experience. According to the J.D. Power 2024 U.S. Advisor Online Experience Study,^SM released today, ease of doing business has emerged as a top priority—second only to investment returns—for advisors when choosing the asset managers they work with most frequently.

The study explores how financial advisors interact with asset manager websites as part of their efforts to help clients grow and manage their wealth with optimal investment products.

"Returns will always be important, but when enhancing brand perceptions and differentiating in a hyper-competitive group of asset managers who are all subject to the same macro market conditions, ease of doing business and seamless interaction between digital and traditional channels is the key," said Craig Martin, executive managing director and head of wealth intelligence at J.D. Power. "A related trend this year is that the average number of asset managers used by advisors has fallen to seven after holding steady at eight for the past three years. As advisors consolidate their asset manager relationships, they are increasingly investing with those who make it easiest for them to do so.”

Following are some key findings of the 2024 study:

• Ease of doing business is secret weapon to differentiate: The primary reason advisors say they use an asset manager is returns. However, as every asset manager promises strong returns, the question to be asked is what else there is to offer in the relationship. When returns are removed from the equation, the most important variable influencing asset manager selection is ease of doing business, with 37% of advisors saying it is their primary reason for using a particular asset manager.

• Digital interaction plays key role in ease of doing business: Among advisors who have an excellent digital experience with asset managers, 26% select them based on ease of doing business. Among advisors who have a poor digital experience, just 18% select their asset managers based on ease of doing business.

• An optimal relationship effectively blends digital and human: Less than 7% of advisors say they prefer to rely on a single engagement channel when working with asset managers. Instead, they prefer a multichannel mix that includes digital websites and apps (56%); email (70%); phone/video calls (73%); and in-person visits (55%). What is particularly noteworthy is that advisors who use an asset manager’s mobile app are most likely to use that asset manager based on ease of doing business.

• Wholesalers become front line for digital education: Wholesaler representatives responsible for managing advisor relationships are not doing enough to nurture digital adoption among advisors. More than one-third (37%) of advisors say they receive no support or guidance on using asset manager websites or apps from their wholesalers or representatives. This results in dramatically lower satisfaction with digital capabilities.

Individual scores and rankings are not provided in this benchmarking study. Firms included in the study are (in alphabetical order):

AllianceBernstein

BlackRock

Capital Group

Charles Schwab

Columbia Threadneedle Investments

Fidelity Investments

Franklin Templeton

Invesco

J.P. Morgan

MassMutual

MFS Investment Management

Morgan Stanley

Nuveen

PIMCO

Prudential Financial

State Street Global Advisors (SSGA)

T. Rowe Price

Vanguard

The U.S. Advisor Online Experience Study evaluates advisor interaction with asset manager websites based on four factors: speed; information/content; visual appeal; and navigation. The 2024 study is based on 2,329 evaluations from financial advisors and was fielded from June through August 2024.

For more information about the U.S. Advisor Online Experience Study, visit https://www.jdpower.com/business/wealth-management/advisor-online-experience-study.

See the online press release at http://www.jdpower.com/pr-id/2024138.

About J.D. Power

J.D. Power is a global leader in consumer insights, advisory services, and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, J.D. Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 55 years. The world's leading businesses across major industries rely on J.D. Power to guide their customer-facing strategies.

J.D. Power has offices in North America, Europe and Asia Pacific. To learn more about the company's business offerings, visit JDPower.com/business. The J.D. Power auto-shopping tool can be found at JDPower.com.

About J.D. Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

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