As financial advisor practices extend their competitive positioning beyond investment management, their reasons for selecting asset management partners remain rooted in performance track record and client service, according to the latest Cerulli Edge—U.S. Advisor Edition.

Although commoditization is discussed heavily regarding product use, advisors say firms can differentiate themselves and earn business through other avenues. While two of the top-three factors—historical product track record (66%) and firm reputation (53%)—may be outside a wholesaler's control, advisors identify the quality of client service as the second most important reason they choose an asset manager (57%).

The perception of client service is significantly influenced by a strong relationship between an advisor and a wholesaler. Distribution teams should take a more consultative approach to building relationships, as this will provide more meaningful value and earn them more time with advisors. A combination of virtual and face-to-face meetings will remain critical to maintaining successful partnerships.

Cerulli’s research finds advisors meet with wholesalers just as frequently in person as they do virtually (1.7 times per week). Just 26% of advisors report having no virtual meetings with wholesalers, compared to 16% who do not engage in in-person meetings. Asset managers should ensure they give advisors options for engagement and consuming resources, as individual preferences vary.

Despite a market oversaturated with webinar offerings, more than two-thirds of advisors (68%) report using webinars to obtain information from asset managers at least quarterly. On a daily basis, emails (30%) and newsletters/blogs (10%) are the most common channels through which advisors consume content from asset managers.

“Providing access to as many resources as possible—virtual or online—helps asset managers deliver better client service,” says Andrew Blake, associate director. “Technical expertise and product knowledge increasingly are proving to be a differentiator for asset managers. Whether through wholesalers educating advisors on more complex products or by bringing an advisor-facing product specialist to a meeting, advisors value being educated as part of receiving good client service, and the additional level of technical insight can go a long toward creating advisor loyalty,” he adds.

It’s imperative for asset managers to remember that while client service can drive advisor relationships, it can also be the reason they end—Cerulli’s research shows poor client service is the top reason advisors cite for terminating a relationship with an asset manager. “Asset managers can stand out and build long-lasting relationships by providing advisors valuable resources at the appropriate cadence and delivering them via their preferred channels,” concludes Blake.