To Add Value to RIAs, Asset Managers Must Move Beyond Just Product

April 19, 2023 — Boston

Asset managers that support advisors beyond product placement are poised to win new advisory relationships

The top challenges advisors face include new client acquisition (50%), compliance and regulatory responsibilities (41%), multi-generational client relationship building (26%), and portfolio construction process optimization (26%). Any resources asset managers can offer to help ease these challenges prove beneficial to developing a relationship with an advisor, according to the latest Cerulli Edge—U.S. Advisor Edition.

When it comes to selecting an asset manager, advisors cite historical product track record (68%), a consistent style of investing (60%), and firm reputation (56%) as the most important criteria. When asked which resources they find to be very valuable from an asset manager, advisors cite hearing best practices from other advisors (43%), financial assistance for client events (40%), and support with advanced financial planning techniques (36%).

“Advisors consistently share that their best partners actively work to help address the most pressing challenges practices face, whether it be through digital tools, client facing materials, or intelligence gathered by wholesalers,” says Andrew Blake, senior analyst.

Cerulli recommends asset managers focus on filling gaps for registered investment advisors (RIAs) wherever possible, such as offering portfolio/model construction services—which can be costly for smaller practices to implement using their own resources. According to Cerulli, seven in 10 asset managers currently, or plan to, offer portfolio/model construction services to large RIAs, a highly valued resource that can help alleviate challenges advisors may face in a move to independence.

Overall, asset managers may find success in interacting with RIAs if they focus on adding value for an advisor’s practice beyond just product. “To be worthy of a partnership, it is important for asset managers to be able to teach advisors not only about the best features of their products, but also about how those products fit into an advisor’s broader portfolio construction framework,” says Blake. “Asset managers can further assist by providing easy-to-understand marketing materials that facilitate more meaningful discussions with their clients, such as tips on building multi-generational relationships and connecting with clients’ children,” concludes Blake.

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Note to editors

These findings and more are from The Cerulli Edge—U.S. Advisor Edition, 2Q 2023 Issue.

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