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The Top 10 From the Nugget Man

By Lee Kowarski

For the past year, I have sent out a "Nugget of the Week" e-mail each week containing a short data point from one of our FA Vision surveys. With a full year of nuggets in the bag, I took a look back and selected the "Top 10" most noteworthy findings to remember:

1. The average financial intermediary invests client assets with eight different asset management companies (the exact average # is 8.08). Advisors in the traditional wirehouse channel work with the most different firms (9.87) and insurance reps work with the fewest (5.74). (8/13/09 - from the Q2 '09 benchmarking survey)

2. Across every channel of financial intermediary, the most important attribute of firm's wholesalers is their knowledge about their firm's products, with 68.8% of advisors stating that this is "very important" and only 5.4% rating it "not important." (9/17/09 - from the Q2 '09 benchmarking survey)

3. ETFs now represent 6.1% of financial intermediaries' AUM, an increase of 16.0% over the past six months. Another big gainer was mutual funds on wrap platforms, now representing 20.6% of AUM (an increase of 9.6%). (12/03/09 - from the Q4 '09 benchmarking survey)

4. Ivy Funds once again has the highest percentage of "advocates," according to the results of FA Vision's Q4 2009 benchmarking survey. "Advocates" are financial intermediaries that do business with a firm and would strongly recommend the company. A full 64.9% of Ivy's intermediary customers are "advocates" of the firm (up from 51.6% in Q2). The next highest Advocate Scores were for PIMCO / Allianz Funds (with 48.7% of its customers as advocates) and iShares (with 48.5%). (12/10/09 - from the Q4 '09 benchmarking survey)

5. Over the past twelve months, advisors did 21.6% of their overall production in mutual funds on wrap platforms, compared to 19.3% when the same question was asked six months earlier. Every channel of distribution showed an increase in the percentage of business on wrap platforms. The findings further showed that advisors are doing significant business in products on recommended lists and in model portfolios, and the amount of business in unified managed accounts is increasing. (01/22/09 - from the Q4 '09 benchmarking survey)

6. Financial intermediaries that had met with an asset manager's external wholesaler 4 times in the prior year are 75.9% more likely to recommend that firm than those who had met only twice. At the same time, there is virtually no difference in advocacy between those advisors that had not met with a manager's external wholesaler and those that met with the wholesaler only 1 or 2 times in the prior year. kasina CEO Steven Miyao explored this issue in greater depth on the kasina blog. (03/05/10 - from the Q4 '09 benchmarking survey)

7. The top 6.8% of Independent RIAs represent 47.8% of all RIA assets and average $884.5 in AUM. The remaining 93.2% have the remaining 52.2% of assets and average only $70.7 in AUM. Steven also explored this issue in greater depth on the kasina blog.(03/25/10 - from the Q4 '09 benchmarking survey)

8. When asked to evaluate various companies, Franklin Templeton Investments' prospects saw the firm as more "Dedicated to Advisors," "Easy to Do Business With," and "Innovative" than any other firm's prospects viewed them. These financial intermediaries, who had not sold Franklin Templeton products in the prior two years, also rated the firm second in consistency and trustworthiness out of the 21 firms evaluated. (04/15/10 - from the Q4 '09 benchmarking survey)

9. 77.5% of financial intermediaries now use social media at least occasionally, up from 74.5% last year. 21.8% of advisors visit either Facebook, LinkedIn, Twitter, or YouTube on a daily basis. (04/28/10 - from the Q2 '10 topical survey about online behavior)

10. Currently, 31.2% of financial intermediaries access work information via a BlackBerry, with 9.3% doing the same via an iPhone. 12.5% of advisors that don't currently use an iPhone to access work info anticipate doing so within the next year. (05/20/10 - from the Q2 '10 topical survey about online behavior)

I'd love feedback on the types of nuggets that you have found interesting, what you'd like to see in the future, or any questions about our FA Vision service - add a comment to this blog post or send me an e-mail at favision@kasina.com. And if you haven't signed up for the "Nugget of the Week," I encourage you to do so at www.kasina.com/weeklyfav