Firms need to sharpen the focus on influential pro buyers


Tuesday, May 29, 2018 | By Tracy Needham

Firms need to sharpen the focus on influential pro buyers

Asset managers dedicate an enormous amount of resources to reach advisors. But as advisors increase their reliance on models, their share of assets over which they have discretion has fallen to about 36%. So firms looking to grow sales and assets need to turn their focus further upstream, on the home offices of the wirehouses, broker-dealers, TAMPs, and banks – and more specifically, on the due diligence and research analysts within those home offices.

Getting a fund on a home office platform is important, but doesn’t guarantee that assets will follow. The real opportunity for asset managers lies in getting that fund added to recommended lists or models. And that decision is largely driven by the due diligence and research analysts.

So we took a closer look at these pro buyer’s needs. We surveyed 26 due diligence professionals and interviewed more than a dozen pro buyers from wirehouses, regional broker-dealers, TAMPs, independent broker-dealers, and banks. And our Serving Professional Buyers Online research found that asset manager’s sales and marketing teams haven’t been serving their needs very well:

  • 52.0% of due diligence pros say their current national accounts relationship adds little value.
  • 80.9% say they use asset manager websites during their research but 47.6% can’t find the information they need.

Understanding pro buyer needs

In fact, due diligence pros usually end up calling their national accounts manager to get the more detailed information they need. That’s not a good use of time for anyone – especially when they have to request the same exact information on a quarterly basis.

While we’ve been talking about due diligence and research pros as one audience, their needs and preferences are actually quite diverse. Three key areas of difference include:

  • Scope. More than half of due diligence team members are specialists, who evaluate specific investment strategies, while the rest are generalists, who can evaluate any fund.
  • Process. At some firms, the analysts do a lot of hands-on, qualitative research, while analysts at a few firms largely rely on third-party data.
  • Emphasis. Similar to portfolio managers, home offices have different philosophies about which factors are most important to choosing reliable investments for their advisors.

Serving them better

The good news is asset managers can make it easier for home offices to evaluate and perform due diligence on their funds (and spare their national accounts team from so many rote paperwork requests). Our new Serving Professional Buyers Online report discusses our recommendations in greater detail, but they boil down to:

  • Providing the depth and breadth of information this sophisticated audience needs to evaluate the firm’s products on an ongoing basis.
  • Delivering the needed information in a far more efficient and relevant way, by website and email – and freeing up the national accounts team for more strategic endeavors.

In short, home office due diligence and research analysts have a great deal of influence over their advisors’ choice of investments – making them an increasingly important audience for managers who want to continue growing AUM. While catering to these pro buyers’ needs won’t affect their choice of funds, it will ensure they can evaluate your funds in a timely and efficient manner – for both them and your national accounts reps.



Research, Analytics, and Consulting


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