CERULLI QUANTITATIVE UPDATE

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CERULLI QUANTITATIVE UPDATE

  1. 1. C CERULLI QUANTITATIVE UPDATE A C e r u l l i ADVISOR SATISFACTION METRICS 2004 A s s o c i a t e s “Comprehensive data on advisor preferences in asset management” The following chapters are Cerulli is pleased to release its first report to focus exclusively on advisor asset manager preferences at a included: firm-specific level. The report is centered around a phone-based survey conducted of more than 500 advisors at • Introduction and Survey wirehouse, regional, and independent broker/dealers that addressed topics related to preferred vendors, share Sample Overview classes, proprietary products, disclosure, and industry scandals. Advisors included in the survey have a minimum of • Asset Manager Selection three years’ tenure, $25 million in assets under management, or $100,000 in annual gross production. Criteria • Asset Manager Usage Rates This business planning tool allows asset managers and distributors to understand advisor behavior at the industry, • Noteworthy Attributes of channel, and firm level, including: Asset Managers • Why advisors select and drop asset managers • Agreements, Fund Types, and Share Classes • How book size, compensation structure, and product mix impact asset manager usage • Key Advisor Attributes • First, second, and third most used asset managers Affecting Selling Practices • What advisors say is important versus how they act • Advisor Defection • Top asset managers advisors use today versus five years ago Preferences • Where advisors are likely to go if they change firms Table of contents and sample • Which asset managers have the cleanest ethical reputation exhibits are included in this • Reasons advisors would consider selling more proprietary funds attachment • Scenarios where advisors would sell no-load funds Other related reports: • Most preferred wholesaling forces Cerulli Quantitative Update: Intermediary Markets Revenue Sharing Among Mutual Key implications for asset managers and distributors accompany each of the 156 exhibits contained in this Funds: Current Practices and report. Additionally, each chapter begins with an overview that draws out the section focus. Projected Implications All chart data is provided in Excel format. The Cerulli Edge—Advisor Edition Price: $10,000. Faxable order form attached. Contact: Rachael Malatesta at 617-437-1098 x119, rmalatesta@cerulli.com or Thomas Marsh at 617-437-1098 x133, tmarsh@cerulli.com
  2. 2. C CERULLI QUANTITATIVE UPDATE A C e r u l l i A s s o c i a t e s ADVISOR SATISFACTION METRICS 2004 Order Form To purchase this report, complete form and fax to 617-437-1268. Rachael Malatesta 617-437-1098 x119 rmalatesta@cerulli.com ____ CERULLI QUANTITATIVE UPDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$10,000 ADVISOR SATISFACTION METRICS 2004 Thomas Marsh 617-437-1098 x133 tmarsh@cerulli.com Name: Company: Address: Phone: CERULLI ASSOCIATES, INC. 575 BOYLSTON STREET Email: BOSTON, MA 02116 PHONE: 617-437-0084 FAX: 617-437-1268 Fax: WWW.CERULLI.COM eblast 1/05
  3. 3. Appendix B: Company Lists Analyst Note: The following is a list of all asset managers named by advisors and broker/dealers which employ the surveyed advisors. Some firms are explicitly named in the text or charts due to the fact that they appear with sufficient frequency. The page numbers listed here indicate their location. Firms with- out page numbers did appear in the raw survey results, but not in sufficient numbers to explicitly appear in charts or text. AIM . . . . . . .27, 48, 49, 50, 51, 53, 55, 56, 57, 58, 59, 60, 65, 66, 67, 69, 72, 73, 74, 76, 77, 103, 138 A.G. Edwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19, 81, 83, 84, 168, 169, 170, 171, 179 Advantage Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 AIG SunAmerica: Please see SunAmerica Alliance . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 55, 56, 57, 58, 60, 62, 63, 64, 65, 66, 67, 69, 103, 138 American Express . . . . . . . . . . . . . . . . . . . . . .19, 48, 51, 53, 56, 59, 60, 65, 73, 74, 77, 103, 138, 179 American Funds . . . . . 27, 48, 49, 50, 51, 53, 54, 55, 56, 57, 58, 59, 60, 62, 63, 64, 65, 66, 67, 68, 69, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70, 71, 72, 73, 74, 75, 76, 77, 103, 138 American General Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 American Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Ameritas Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Aragon Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Associated Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Bank of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .169 Berthel Fisher & Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Birchtree Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Black Rock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Boenning & Scattergood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Brecek & Young Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Brookstreet Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Butler Wick & Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Cadaret Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Calamos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 56, 66, 67, 70, 71, 103, 138 Calvert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27, 66, 69, 73 Cambridge Group Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Cambridge Investment Reasearch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Cantella & Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Capital Management Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Centennial Capital Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 CDC IXIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Charles Schwab . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103 Citigroup Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .169, 171 Columbia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27, 48, 49, 50, 51, 54, 60, 63, 65 Commonwealth Financial Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168, 171 ADVISOR SATISFACTION METRICS 2004 181
  4. 4. Crowell Weedon & Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Davenport & Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 David Lerner Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Davis . . . . . . . . . . . . . . . . . . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 55, 56, 57, 58, 59, 72, 73, 103, 138 Delaware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Dreyfus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27, 48, 49, 50, 51, 54, 55, 57, 58, 59, 63 Eaton Vance . . . . . . . . . . . . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 55, 56, 63, 64, 66, 67, 72, 103, 138 Edward Jones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19, 81, 83, 84, 168, 169, 171, 179 Eisner Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Evergreen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48, 49, 50, 54, 59, 63, 64, 103, 138 Fahnestock & Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Federated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Ferris Baker Watts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .171 Fidelity . . . . . . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 55, 56, 57, 58, 59, 60, 62, 63, 65, 66, 67, 69, 70, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73, 74, 77, 103, 138 Financial Network Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Financial West Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 First Eagle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 First Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 First Midwest Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 First Montauk Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Foothills Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Franklin Templeton . . . . . . . . .27, 48, 49, 50, 53, 51, 54, 55, 56, 57, 58, 59, 60, 62, 63, 64, 65, 66, 69, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70, 71, 72, 73, 74, 75, 76, 77, 103, 138 FSC Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Goldman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Goldman Sachs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168, 169 H. Beck . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Hartford . . . . . . . . . . . . . . .27, 49, 50, 51, 53, 54, 55, 56, 57, 58, 60, 62, 63, 64, 65, 66, 69, 70, 72, 73, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74, 76, 103, 138 Hotchkis & Wiley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 ICBA Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 ING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19, 27 Intervest International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Invest Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Investment Centers of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Janney Montgomery Scott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Janus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57, 58, 60, 66, 67 John Hancock . . . . . . . . . . . . . . . . . . .27, 48, 49, 50, 51, 53, 55, 56, 57, 59, 60, 62, 63, 64, 66, 73, 181 Kirkpatrick Pettis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 182 ADVISOR SATISFACTION METRICS 2004
  5. 5. LaSalle Street Securities Legg Mason . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50, 55, 72, 103, 138, 169, 170, 179 Lincoln Financial Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Lincoln Investment Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Lincoln Park Investment Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Lockwood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65, 73 Lombard Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Lord Abbett . . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 55, 56, 57, 58, 59, 62, 63, 64, 66, 67, 70, 71, 72, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74, 75, 103, 138 LPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19, 51, 56, 65, 73, 168, 169, 170, 171 Manulife . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50, 51, 63 MassMutual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19, 58, 62 Merrill Lynch . . . . . . . . . . . . . .19, 48, 49, 53, 54, 57, 58, 59, 63, 71, 75, 103, 138, 168, 169, 171, 179 MFS . . . . . . . . . . . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 55, 56, 57, 58, 59, 60, 62, 63, 64, 65, 66, 67, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69, 74, 76, 77, 103, 138 Moors & Cabot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19, 54, 168, 169, 170, 179 Nathan & Lewis Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 National Planning Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 National Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 NEXT Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Nuveen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27, 49, 50, 55, 103 OFG Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Oppenheimer . . . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 55, 56, 57, 58, 59, 60, 62, 63, 64, 65, 66, 69, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70, 71, 72, 73, 74, 76, 77, 103, 138 Pacific Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51, 63, 65 Parker Hunter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 PIM Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 PIMCO . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 55, 56, 58, 63, 65, 66, 67, 68, 69, 72, 74, 75, 103, 138 Pioneer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27, 48, 49, 54, 62, 63, 66, 68 PMG Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Presidential Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 PrimeVest Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Pro-Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .171 Protected Investors of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Prudential/Wachovia . . . . . . . . . . . . . . . . . . . . . . . . . .19, 49, 63, 65, 103, 166, 168, 169, 170, 171, 179 Putnam . . . . . . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 55, 56, 57, 58, 59, 60, 62, 63, 64, 65, 66, 67, 68, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69, 71, 73, 103, 138 Raymond James . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19, 168, 169, 170, 171 RBC Dain Rauscher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Robert W Baird . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 ADVISOR SATISFACTION METRICS 2004 183
  6. 6. Royal Alliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Ryan Beck & Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Rydex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Russell Investment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Salomon Smith Barney . . . . . . .19, 48, 49, 53, 54, 57, 58, 59, 63, 74, 75, 103, 138, 168, 169, 170, 171 Scudder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27, 48, 50, 51, 56, 57, 58, 59, 60, 62, 63, 65, 66, 67, 69 Securities Capital Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Securities Service Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Seligman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 SEI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50, 59, 65, 70, 73, 103 Signal Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 SII Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Stifel Nicolaus & Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 SunAmerica . . . . . .19, 48, 49, 50, 51, 53, 55, 56, 57, 59, 60, 62, 63, 64, 65, 66, 73, 74, 103, 138, 171 SWS Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 TA Dex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 The Advisors Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 The Investment Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Thornburg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Touchstone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 UBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19, 168, 169, 179 United Planners' Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 US Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Van Kampen . . . . . . . . . . . . . . .27, 48, 49, 50, 51, 53, 54, 55, 56, 57, 58, 59, 60, 66, 67, 75, 103, 138 Vanguard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66, 67, 70, 71, 72, 73 VSR Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Wachovia/Prudential: Please see Prudential/Wachovia Waddell & Reed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Walnut Street Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 Wellington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72, 73 Wedbush Morgan Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 WM Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51, 62, 63, 65, 66, 73, 103, 138 WRP Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .See Analyst Note on page 181 184 ADVISOR SATISFACTION METRICS 2004
  7. 7. table of contents Introduction and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Chapter 1: Introduction and Survey Sample Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Channel Overview Exhibit 1. Financial Advisors by Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Exhibit 2. Average Concentration of Advisors by Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Exhibit 3. Top Broker/Dealer Firms by Advisor Headcount, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Mutual Fund Assets and Flows Exhibit 4. Attribution of Mutual Fund Assets to Traditional and Nontraditional Channels, 1995-2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Exhibit 5. Source of Assets: Traditional vs. Nontraditional Channels, 1995-2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Survey Sample Profile Exhibit 6. Advisor Tenure by Channel: Advisor Satisfaction Survey Respondents, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Exhibit 7. Advisor Assets Under Management by Channel: Advisor Satisfaction Survey Respondents, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Exhibit 8. Number of Clients per Advisor by Channel: Advisor Satisfaction Survey Respondents, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Exhibit 9. Advisors by Revenue Source and Channel: Advisor Satisfaction Survey Respondents, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Exhibit 10. Mutual Fund Allocation by Channel: Advisor Satisfaction Survey Respondents, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Exhibit 11. Top Broker-Sold Fund Companies, 3Q 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Chapter 2: Asset Manager Selection Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 Important Criteria in Selecting Asset Managers Exhibit 12. Channel Scorecard: Ranking of Factors Influencing Decisions to Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Exhibit 13. Relative Importance of Factors Influencing Decisions to Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 Exhibit 14. Relative Importance of Factors Influencing Decisions to Use an Asset Manager: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Exhibit 15. Relative Importance of Factors Influencing Decisions to Use an Asset Manager: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . .32 Exhibit 16. Relative Importance of Factors Influencing Decisions to Use an Asset Manager: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 Rating of Currently Used Asset Managers’ Performance Exhibit 17. Channel Scorecard: Ranking of Most-Used Asset Managers’ Performance in Particular Areas, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 Exhibit 18. Relative Performance of Most-Used Asset Managers in Particular Areas, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Exhibit 19. Relative Performance of Most-Used Asset Managers in Particular Areas: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 Exhibit 20. Relative Performance of Most-Used Asset Managers in Particular Areas: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Exhibit 21. Relative Performance of Most-Used Asset Managers in Particular Areas: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 Important Criteria in Not Selecting Asset Managers Exhibit 22. Channel Scorecard: Ranking of Factors Influencing Decisions to Not Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 Exhibit 23. Relative Importance of Factors Influencing Decisions to Not Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 ADVISOR SATISFACTION METRICS 2004 TABLE OF CONTENTS 3
  8. 8. table of contents Exhibit 24. Relative Importance of Factors Influencing Decisions to Not Use an Asset Manager: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . .41 Exhibit 25. Relative Importance of Factors Influencing Decisions to Not Use an Asset Manager: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . .42 Exhibit 26. Relative Importance of Factors Influencing Decisions to Not Use an Asset Manager: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Chapter 3: Asset Manager Usage Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Number of Asset Managers Exhibit 27. Channel Scorecard: Number of Asset Managers Used, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Asset Allocation Exhibit 28. Channel Scorecard: Average Percentage of Assets with Most-Used Asset Managers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46 Exhibit 29. Channel Scorecard: Percentage of Assets with Most-Used Asset Managers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Most-Used Asset Managers Exhibit 30. Company Scorecard: Three Most-Used Asset Managers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 Exhibit 31. Company Scorecard: Three Most-Used Asset Managers: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Exhibit 32. Company Scorecard: Three Most-Used Asset Managers: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 Exhibit 33. Company Scorecard: Three Most-Used Asset Managers: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Most-Used Asset Managers Currently vs. Most-Used Asset Managers Five Years Ago Exhibit 34. Channel Scorecard: Use of Current Three Most-Used Asset Managers Five Years Ago, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Exhibit 35. Company Scorecard: Use of Current Three Most-Used Asset Managers Five Years Ago, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53 Exhibit 36. Company Scorecard: Use of Current Top Three Most-Used Asset Managers Five Years Ago: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . .54 Exhibit 37. Company Scorecard: Use of Current Top Three Most-Used Asset Managers Five Years Ago: Regional B/D Channel, 2004 . . . . . . . . . . . . . . .55 Exhibit 38. Company Scorecard: Use of Current Top Three Most-Used Asset Managers Five Years Ago: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . .56 Exhibit 39. Company Scorecard: Percent Dropping Firm from Three Most-Used Asset Managers During Past Five Years, 2004 . . . . . . . . . . . . . . . . . . . . .57 Exhibit 40. Company Scorecard: Percent Dropping Firm from Three Most-Used Asset Managers During Past Five Years: NFS B/D Channel, 2004 . . . . .58 Exhibit 41. Company Scorecard: Percent Dropping Firm from Three Most-Used Asset Managers During Past Five Years: Regional B/D Channel, 2004 .59 Exhibit 42. Company Scorecard: Percent Dropping Firm from Three Most-Used Asset Managers During Past Five Years: IBD Channel, 2004 . . . . . . . . .60 Chapter 4: Noteworthy Attributes of Asset Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Business-Growing Ideas Exhibit 43. Company Scorecard: Asset Managers Best at Providing Advisors Business-Growing Ideas, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Exhibit 44. Company Scorecard: Asset Managers Best at Providing Advisors Business-Growing Ideas: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . .63 Exhibit 45. Company Scorecard: Asset Managers Best at Providing Advisors Business-Growing Ideas: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . .64 Exhibit 46. Company Scorecard: Asset Managers Best at Providing Advisors Business-Growing Ideas: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . .65 Exhibit 47. Company Scorecard: Asset Managers Worst at Providing Advisors Business-Growing Ideas, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 Exhibit 48. Company Scorecard: Asset Managers Worst at Providing Advisors Business-Growing Ideas: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . .67 4 TABLE OF CONTENTS ADVISOR SATISFACTION METRICS 2004
  9. 9. table of contents Exhibit 49. Company Scorecard: Asset Managers Worst at Providing Advisors Business-Growing Ideas: Regional B/D Channel, 2004 . . . . . . . . . . . . . . .68 Exhibit 50. Company Scorecard: Asset Managers Worst at Providing Advisors Business-Growing Ideas: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . .69 Unblemished Reputation Exhibit 51. Company Scorecard: Asset Managers with the Most Unblemished Reputation, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70 Exhibit 52. Company Scorecard: Asset Managers with the Most Unblemished Reputation: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71 Exhibit 53. Company Scorecard: Asset Managers with the Most Unblemished Reputation: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . .72 Exhibit 54. Company Scorecard: Asset Managers with the Most Unblemished Reputation: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73 Overall Performance Exhibit 55. Company Scorecard: Overall Performance of Most-Used Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74 Exhibit 56. Company Scorecard: Overall Performance of Most-Used Asset Manager: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75 Exhibit 57. Company Scorecard: Overall Performance of Most-Used Asset Manager: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76 Exhibit 58. Company Scorecard: Overall Performance of Most-Used Asset Manager: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77 Chapter 5: Agreements, Fund Types, and Share Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Preferred or Strategic Partnership Agreements Exhibit 59. Channel Scorecard: Percentage of Assets with Preferred or Strategic Partner Asset Managers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79 Exhibit 60. Channel Scorecard: Willingness to Sell Funds for Preferred or Strategic Partner Asset Managers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80 Proprietary Funds Exhibit 61. Number of Proprietary Funds by Channel, 3Q 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81 Exhibit 62. Channel Scorecard: Percentage of Firms Offering Proprietary Funds, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82 Exhibit 63. Proprietary Fund Assets by Channel, 2000-3Q 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83 Exhibit 64. Proprietary Fund Net Flows by Channel, 2000-2004E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84 Exhibit 65. Channel Scorecard: Ranking of Factors Influencing Willingness to Sell Proprietary Funds, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85 Exhibit 66. Relative Effect of Factors Influencing Willingness to Sell Proprietary Funds, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86 Exhibit 67. Relative Effect of Factors Influencing Willingness to Sell Proprietary Funds: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87 Exhibit 68. Relative Effect of Factors Influencing Willingness to Sell Proprietary Funds: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . .88 Exhibit 69. Relative Effect of Factors Influencing Willingness to Sell Proprietary Funds: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89 Share Classes Exhibit 70. Mutual Fund Assets by Share Class, 2000-3Q 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90 Exhibit 71. Mutual Fund Net Flows by Share Class, 2000-2004E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91 Exhibit 72. Channel Scorecard: Percentage of Advisors Willing to Sell No-Load Share Classes, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92 Exhibit 73. Factors Influencing Willingness to Sell No-Load Share Classes, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93 Exhibit 74. Factors Influencing Willingness to Sell No-Load Share Classes: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94 Exhibit 75. Factors Influencing Willingness to Sell No-Load Share Classes: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95 Exhibit 76. Factors Influencing Willingness to Sell No-Load Share Classes: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96 ADVISOR SATISFACTION METRICS 2004 TABLE OF CONTENTS 5
  10. 10. table of contents Exhibit 77. Channel Scorecard: Ranking of Impact of Disclosure on Selling of Share Classes, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97 Exhibit 78. Relative Impact of Disclosure on Willingness to Sell Share Classes, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98 Exhibit 79. Relative Impact of Disclosure on Willingness to Sell Share Classes: NFS B/DChannel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99 Exhibit 80. Relative Impact of Disclosure on Willingness to Sell Share Classes: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100 Exhibit 81. Relative Impact of Disclosure on Willingness to Sell Share Classes: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101 Chapter 6: Key Advisor Attributes Affecting Selling Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102 Commission-Based vs. Fee-Based Advisors Noteworthy Attributes of Asset Managers Exhibit 82. Company Scorecard: Most-Used Asset Managers of Commission-Based vs. Fee-Based Advisors, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103 Exhibit 83. Compensation Scorecard: Number of Asset Managers Used, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104 Exhibit 84. Compensation Scorecard: Percentage of Assets with Most-Used Asset Managers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105 Asset Manager Selection Criteria Exhibit 85. Compensation Scorecard: Relative Importance of Offering a Competitive Commission in Deciding to Use an Asset Manager, 2004 . . . . . . . .106 Exhibit 86. Compensation Scorecard: Relative Importance of Offering Subadvised Funds in Deciding to Use an Asset Manager, 2004 . . . . . . . . . . . . . . .107 Exhibit 87. Compensation Scorecard: Relative Importance of Providing Client Education in Deciding to Use an Asset Manager, 2004 . . . . . . . . . . . . . . .108 Exhibit 88. Compensation Scorecard: Relative Performance of Most-Used Asset Manager Having Top-Performing Products, 2004 . . . . . . . . . . . . . . . . . .109 Exhibit 89. Compensation Scorecard: Relative Performance of Most-Used Asset Manager Having Competitive Commissions, 2004 . . . . . . . . . . . . . . . . .110 Exhibit 90. Compensation Scorecard: Relative Performance of Most-Used Asset Manager Providing Advisors Business-Growing Ideas, 2004 . . . . . . . . .111 Exhibit 91. Compensation Scorecard: Relative Performance of Most-Used Asset Manager Having High Morningstar or Other Ratings, 2004 . . . . . . . . . .112 Exhibit 92. Compensation Scorecard: Relative Performance of Most-Used Asset Manager Offering a Wide Range of Investment Styles, 2004 . . . . . . . . .113 Exhibit 93. Compensation Scorecard: Relative Performance of Most-Used Asset Manager Providing Client Education, 2004 . . . . . . . . . . . . . . . . . . . . . . .114 Exhibit 94. Compensation Scorecard: Relative Performance of Most-Used Asset Manager Having Strong Brand Recognition, 2004 . . . . . . . . . . . . . . . . .115 Exhibit 95. Compensation Scorecard: Relative Importance of Offering Low Commissions in Deciding to Not Use an Asset Manager, 2004 . . . . . . . . . . .116 Exhibit 96. Compensation Scorecard: Relative Importance of Not Providing Client Education in Deciding to Not Use an Asset Manager, 2004 . . . . . . . .117 Preferred or Strategic Partnership Agreements Exhibit 97. Compensation Scorecard: Percentage of Assets with Preferred or Strategic Partner Asset Managers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .118 Share Classes Exhibit 98. Compensation Scorecard: Percentage of Advisors Willing to Sell No-Load Share Classes, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119 Exhibit 99. Compensation Scorecard: Factors Influencing Willingness to Sell No-Load Share Classes, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120 Advisor Tenure Asset Manager Selection Criteria Exhibit 100. Tenure Scorecard: Relative Performance of Most-Used Asset Manager Offering a Wide Range of Investment Styles, 2004 . . . . . . . . . . . . . .121 6 TABLE OF CONTENTS ADVISOR SATISFACTION METRICS 2004
  11. 11. table of contents Preferred and Strategic Partnership Agreements Exhibit 101. Tenure Scorecard: Willingness to Sell Funds of Preferred or Strategic Partner Asset Managers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .122 Share Classes Exhibit 102. Tenure Scorecard: Factors Influencing Willingness to Sell No-Load Share Classes, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123 Advisor Book Size: Assets Under Management Asset Manager Usage Rates Exhibit 103. Book Size Scorecard: Number of Asset Managers Used, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124 Asset Manager Selection Criteria Exhibit 104. Book Size Scorecard: Relative Importance of Offering a Competitive Commission in Deciding to Use an Asset Manager, 2004 . . . . . . . . . .125 Exhibit 105. Book Size Scorecard: Relative Importance of Providing Advisors Business-Growing Ideas in Deciding to Use an Asset Manager, 2004 . . . .126 Exhibit 106. Book Size Scorecard: Relative Importance of Providing Client Education in Deciding to Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . .127 Exhibit 107. Book Size Scorecard: Relative Importance of Having Strong Brand Recognition in Deciding to Use an Asset Manager, 2004 . . . . . . . . . . . .128 Exhibit 108. Book Size Scorecard: Relative Performance of Most-Used Asset Manager Providing Advisors Business-Growing Ideas, 2004 . . . . . . . . . . .129 Exhibit 109. Book Size Scorecard: Relative Performance of Most-Used Asset Manager Offering Variable Annuities and/or Separate Accounts, 2004 . . . .130 Preferred or Strategic Partnership Agreements Exhibit 110. Book Size Scorecard: Percentage of Assets with Preferred or Strategic Partner Asset Managers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .131 Share Classes Exhibit 111. Book Size Scorecard: Percentage of Advisors Willing to Sell No-Load Share Classes, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .132 Exhibit 112. Book Size Scorecard: Willingness to Sell No-Load Share Classes at a Client’s Request, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133 Advisor Relationships: Percentage of Assets with Preferred or Strategic Partner Asset Managers Asset Manager Selection Criteria Exhibit 113. Preferred or Strategic Partnership Scorecard: Impact of Appearing on a Firm’s Preferred Provider List in Deciding to Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134 Exhibit 114. Preferred or Strategic Partnership Scorecard: Performance Rating of Most-Used Asset Manager Appearing on a Firm’s Preferred Provider List, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135 Exhibit 115. Preferred or Strategic Partnership Scorecard: Impact of Removal from a Firm’s Preferred Provider List in Deciding to Not Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .136 Preferred or Strategic Partnership Agreements Exhibit 116. Preferred or Strategic Partnership Scorecard: Willingness to Sell Funds for Preferred or Strategic Partner Asset Managers, 2004 . . . . . . . . . .137 Top Producers vs. Lower-End Producers Asset Manager Usage Rates Exhibit 117. Company Scorecard: Most-Used Asset Manager of Top Producers vs. Lower-End Producers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138 ADVISOR SATISFACTION METRICS 2004 TABLE OF CONTENTS 7
  12. 12. table of contents Exhibit 118. Top Producer Scorecard: Number of Asset Managers Used, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139 Exhibit 119. Top Producer Scorecard: Percentage of Assets with Most-Used Asset Managers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140 Asset Manager Selection Criteria Exhibit 120. Top Producer Scorecard: Relative Importance of Providing Advisors Business-Growing Ideas in Deciding to Use an Asset Manager, 2004 .141 Exhibit 121. Top Producer Scorecard: Relative Performance of Most-Used Asset Manager Having Competitive Commissions, 2004 . . . . . . . . . . . . . . . . .142 Exhibit 122. Top Producer Scorecard: Relative Performance of Most-Used Asset Manager Providing Advisors Business-Growing Ideas, 2004 . . . . . . . . .143 Exhibit 123. Top Producer Scorecard: Relative Performance of Most-Used Asset Manager Having Strong Brand Recognition, 2004 . . . . . . . . . . . . . . . . .144 Exhibit 124. Top Producer Scorecard: Relative Performance of Most-Used Asset Manager Appearing on a Firm’s Preferred Provider List, 2004 . . . . . . .145 Exhibit 125. Top Producer Scorecard: Relative Importance of Having Low Morningstar or Other Ratings in Deciding to Not Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .146 Advisor Mutual Fund Usage: Percentage of Assets in Mutual Funds Asset Manager Selection Criteria Exhibit 126. Mutual Fund Asset Scorecard: Relative Importance of Providing Advisors Business-Growing Ideas in Deciding to Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147 Exhibit 127. Mutual Fund Asset Scorecard: Relative Importance of Offering Variable Annuities and/or Separate Accounts in Deciding to Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148 Exhibit 128. Mutual Fund Asset Scorecard: Relative Importance of Offering a Wide Range of Investment Styles in Deciding to Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .149 Exhibit 129. Mutual Fund Asset Scorecard: Relative Importance of Providing Client Education in Deciding to Use an Asset Manager, 2004 . . . . . . . . . . .150 Exhibit 130. Mutual Fund Asset Scorecard: Relative Performance of Most-Used Asset Manager Having Top-Performing Products, 2004 . . . . . . . . . . . . .151 Exhibit 131. Mutual Fund Asset Scorecard: Relative Performance of Most-Used Asset Manager Having Competitive Commissions, 2004 . . . . . . . . . . . .152 Exhibit 132. Mutual Fund Asset Scorecard: Relative Performance of Most-Used Asset Manager Providing Advisors Business-Growing Ideas, 2004 . . . .153 Exhibit 133. Mutual Fund Asset Scorecard: Relative Importance of Not Using a Consistent Investment Style in Deciding to Not Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154 Share Classes Exhibit 134. Mutual Fund Asset Scorecard: Percentage of Advisors Willing to Sell No-Load Share Classes, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .155 Advisor Proprietary Fund Availability Asset Manager Selection Criteria Exhibit 135. Proprietary Fund Offering Scorecard: Ranking of Factors Influencing Decisions to Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . . . . .156 Exhibit 136. Proprietary Fund Offering Scorecard: Ranking of Factors Influencing Decisions to Not Use an Asset Manager, 2004 . . . . . . . . . . . . . . . . . . .157 Fund Types Exhibit 137. Proprietary Fund Offering Scorecard: Willingness to Offer Proprietary Products if Asset Manager Offered Products through Other Broker/Dealers, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .158 Exhibit 138. Proprietary Fund Offering Scorecard: Willingness to Offer Proprietary Products if Asset Manager Obtained Better Performance, 2004 . . . . .159 8 TABLE OF CONTENTS ADVISOR SATISFACTION METRICS 2004
  13. 13. table of contents Exhibit 139. Proprietary Fund Offering Scorecard: Willingness to Offer Proprietary Products if Asset Manager Hired Star Portfolio Managers, 2004 . . . .160 Exhibit 140. Proprietary Fund Offering Scorecard: Willingness to Offer Proprietary Products if Asset Manager Acquired Other Money Managers, 2004 .161 Advisor Proprietary Fund Allocation Exhibit 141. Proprietary Fund Asset Scorecard: Proprietary Fund Assets by Number of Clients, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .162 Share Classes Exhibit 142. Proprietary Fund Asset Scorecard: Percentage of Advisors Willing to Sell No-Load Share Classes, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163 Importance of Preferred Provider Lists to Advisor Exhibit 143. Advisor Willingness to Sell Preferred or Strategic Partner Asset Manager: Importance of Appearing on Preferred Provider List, 2004 . . . . .164 Exhibit 144. Advisor Willingness to Sell Preferred or Strategic Partner Asset Manager: Importance of Removal from Preferred Provider List, 2004 . . . . .165 Chapter 7: Advisor Defection Preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .166 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .166 Most Popular Firms Exhibit 145. Channel Scorecard: Broker/Dealer Channel Advisors Most Willing to Join, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .167 Exhibit 146. Company Scorecard: Broker/Dealer Firm Advisors Most Willing to Join, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168 Exhibit 147. Company Scorecard: Broker/Dealer Firm Advisors Most Willing to Join: NFS B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .169 Exhibit 148. Company Scorecard: Broker/Dealer Firm Advisors Most Willing to Join: Regional B/D Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170 Exhibit 149. Company Scorecard: Broker/Dealer Firm Advisors Most Willing to Join: IBD Channel, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .171 Key Advisor Attributes Exhibit 150. Tenure Scorecard: Broker/Dealer Channel Advisors Most Willing to Join, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .172 Exhibit 151. Book Size Scorecard: Broker/Dealer Channel Advisors Most Willing to Join, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .173 Exhibit 152. Top Producer Scorecard: Broker/Dealer Channel Advisors Most Willing to Join, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174 Exhibit 153. Compensation Scorecard: Broker/Dealer Channel Advisors Most Willing to Join, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175 Exhibit 154. Mutual Fund Asset Scorecard: Broker/Dealer Channel Advisors Most Willing to Join, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .176 Exhibit 155. Proprietary Fund Asset Scorecard: Broker/Dealer Channel Advisors Most Willing to Join, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .177 Exhibit 156. Preferred or Strategic Partner Asset Scorecard: Broker/Dealer Channel Advisors Most Willing to Join, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . .178 Appendix A: Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .179 Appendix B: Company Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .180 ADVISOR SATISFACTION METRICS 2004 TABLE OF CONTENTS 9
  14. 14. Introduction and Methodology Cerulli Quantitative Update: Advisor Satisfaction Metrics 2004 is Cerulli Associates’ (CA’s) first report to examine advisor preferences in detail and on a firm-specific level. The report not only lever- ages CA’s continuous research and analysis of advisorforce trends, but also centers on an extensive pro- prietary survey of 519 advisors, conducted during the third quarter of 2004. The survey used 20-minute telephone interviews conducted by Mathew Greenwald & Associates in Washington, D.C. The interviews were designed to gather opinions as well as detailed ratings and pref- erences from advisors in the national full-service, regional, and independent broker/dealer channels. CA only included advisors with a minimum of three years’ tenure, $25 million in assets under management, or $100,000 in annual gross production. The survey asked 20 primary questions representing 62 sub- questions, focusing on revenue sharing, share classes, proprietary products, disclosure, and industry scandals. Advisors also were asked to detail their manager selection criteria and rank specific asset managers. Interviewers did not prompt respondents with any specific firm names; all responses came directly from them. Advisor Satisfaction Metrics 2004 is designed to serve as a stand-alone, as well as complementary, addition to our other publications. Taken on its own, this report highlights our quantitative coverage of advisors in the NFS, regional, and IBD channels, with reduced qualitative commentary regarding the details of the figures contained in the charts. Every exhibit includes explanations that highlight key implications, each of which states the important tactical ramifications for asset managers or broker/deal- ers depicted by the data. The report is designed as a business planning tool, and additional support leveraging this data—in the form of customized workshops and other presentations—is also available. In general, CA’s opinions and perspectives are shaped by a methodology based on three components: 1) Industry understanding: All Cerulli analysts come to the firm with a background shaped by relevant experience at leading financial services firms, which contributes to the internal pool of industry knowl- edge fed by more than 10 years of proprietary research and consulting. 2) Quantitative analysis: Cerulli independently maintains surveys geared toward broker/dealer firms and advisors that serve as the basis for our proprietary research, supplemented with information from additional third-party databases. 3) Qualitative research: Cerulli analysts annually conduct background research interviews with industry executives and advisors in a confidential manner, which allows for candid commentary regarding the state of the intermediary markets and potential future trends. CA expects to issue Advisor Satisfaction Metrics on an annual basis. 10 ADVISOR SATISFACTION METRICS 2004
  15. 15. SAMPLE SECTION from CERULLI QUANTITATIVE UPDATE: ADVISOR SATISFACTION METRICS 2004
  16. 16. EXHIBIT 13 Relative Importance of Factors Influencing Decisions to Use an Asset Manager, 2004 Source: Cerulli Associates Unblemished ethical reputation 63% 35% 2% Consistent style of investing 61% 35% 4% Top-performing products 44% 51% 5% Wide range of investment styles 33% 54% 13% High Morningstar or other ratings 14% 67% 19% Wholesalers with business-growing ideas 16% 58% 26% Client education 15% 56% 29% Strong brand recognition 11% 59% 30% Competitive commissions 13% 54% 33% Offering variable annuities and/ 14% 35% 51% or separate accounts On firm's preferred provider list 11% 33% 56% Offering subadvised funds 5% 41% 55% Recommended by home office research staff 5% 38% 57% 0% 25% 50% 75% 100% Extremely important (5) Somewhat important (4 or 3) Not at all important (2 or 1) The importance of the factors advisors consider when selecting an asset manager can be ranked, as in the previous exhibit, or viewed relatively by breaking down the level of importance advisors attribute to each criterion. All four of the factors advisors viewed as most important were considered “extremely important” to at least 33% of respondents. Somewhere between one-third and one-half of advisors believed that these factors were “somewhat” important—making the total amount of advisors rating these fac- tors as important approximately 90% for each. For the four factors advisors viewed as least important, all four were considered “not at all important” by more than 50% of advisors. Asset managers, therefore, are unlikely to secure additional distribution by concentrating on these factors. Key Implication: These four most important factors—unblemished ethical reputation, consistent style of investing, top-performing products, and a wide range of investment styles—ranked highest among all choices because of their direct relationship with client returns. There could be serious implications for the asset manager, as well as for the advisor, if there were to be a shift in any of these factors, as they affect performance and diversification. The four lowest-rated fac- tors—offering variable annuities/separate accounts, appearing on a firm’s preferred provider list, offering subadvised funds, and being recommended by home- office research staff—are the four factors seen as having the least impact on potential returns, and therefore have less influence over an advisor’s willingness to use a particular asset management firm. 30 ADVISOR SATISFACTION METRICS 2004
  17. 17. EXHIBIT 145 Channel Scorecard: Broker/Dealer Channel Advisors Most Willing to Join, 2004 Source: Cerulli Associates 100% 3% 7% 3% 1% 2% 1% 75% 44% 52% 62% 84% 50% 25% 48% 45% 34% 14% 0% All respondents NFS B/D Regional B/D B/D NFS B/D IBD Regional B/D Bank/Private bank Overall, the majority of advisors are most willing to join the IBD channel, while only 34% are willing to join a firm within the NFS B/D channel. Advisors currently working in the IBD channel are the most loyal, with 84% of those advisors most willing to move to another firm within the same chan- nel; only 48% of advisors currently working in the NFS B/D channel are willing to stay within that channel. Nearly half of all NFS B/D advisors want to become IBD advisors, and nearly no regional B/D advisors want to stay within their channel. The IBD channel employs many different types of advisors with different needs and focuses. Alternatively, the advisorforce within the NFS B/D channel is more defined and uniform. Over time, the business model and consequent needs of an advisor working in the NFS channel may become more aptly supported by the structure of the IBD channel, and vice versa. Because the retention rate of IBD advisors that have already aligned themselves with the IBD channel is so high (84%), it is imperative for NFS B/D firms to keep top producers while developing systems that recruit strong talent from other channels. Key Implication: Firms in the NFS B/D channel should attempt to understand and identify what is important to advisors and their success, and create an atmosphere that motivates advisors in an effort to keep them at the firm. These firms also need to construct an approach that provides advisors more autonomy, higher payouts, or bonuses—much like those of the IBD channel—as the reps build their books of business. Tactically, the IBD channel is very succinct in its business approach. By developing and strengthening internal controls and home-office support services, IBDs might be able to attract advisors who remain at traditional B/Ds for these benefits. ADVISOR SATISFACTION METRICS 2004 167
  18. 18. EXHIBIT 46 Company Scorecard: Asset Managers Best at Providing Advisors Business-Growing Ideas: IBD Channel, 2004 Source: Cerulli Associates 30.0% 19.8% 20.0% 13.2% 9.9% 10.0% 6.6% 5.5% 3.3% 3.3% 3.3% 2.2% 2.2% 2.2% 2.2% 2.2% 1.1% 1.1% 1.1% 1.1% 1.1% 1.1% 1.1% 0.0% Putnam Fidelity Hartford MFS Columbia SunAmerica AIM Alliance Oppenheimer SEI WM Group American Express American Funds Scudder Prudential/Wachovia Franklin Templeton PIMCO Pacific Life Lockwood Linsco Private Ledger The percentage of IBD advisors ranking American Funds best for providing business-growing ideas is lower than it is in the other two channels. American Funds does reach many advisors in larger branch offices, providing them significant information. But independent advisors are not necessarily based in large branches, and require relatively more technical information that they do not always receive from these wholesalers. SunAmerica makes its first appearance in the five most-named asset managers, placing fourth. Because IBD advisors are more likely than their NFS B/D or regional B/D counterparts to sell annuities as well as mutual funds, they tend to attract more attention from some of the insurers. Key Implication: Advisors in the IBD channel highly value the independence that comes with their independent-contractor status, and this makes them more likely to consider introducing a new asset manager to their clients. Advisors in this channel rated 20 companies with some frequency as having the best busi- ness-building ideas (compared to 14 across all channels), and named two firms (AIM and American Express) omitted by other advisors. Analyst Note: Advisors were asked which asset manager was best at providing them ideas on growing their business. Often, the asset manager named was one the advisor ranked among their most-used. But this is not necessarily the case, and therefore this may reflect an advisor’s perception of which vendor is best. Also note that more than 1% of advisors mentioned Lockwood, SEI, and LPL for business-growing ideas, but because these firms have no proprietary asset management, advisors are likely referring to assets gathered via these firms’ platforms. ADVISOR SATISFACTION METRICS 2004 65

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