In 2021, our "How to Maintain and Deepen Relationships with Research & Due Diligence Teams" blog post highlighted several changes that asset managers could make which, according to 24 broker-dealer/gatekeeper firms, could improve the quality of engagement with these increasingly important targets of distribution. The overarching through line from those responses indicated that what research and due diligence teams valued most in 2020 were transparency, timely access and an understanding of their needs and demands. What they disapproved of most were hard selling, one-size-fits-all and transactional sales mentalities, product pitches that lack an understanding of/consideration for their business, and “check the box” interactions.
In this blog post, we examine the responses from our most recent Broker-Dealer Research & Due Diligence Team Productivity Insights Survey and revisit those same questions to see if asset managers have begun to implement changes based on the feedback from their key distribution targets, and what they can do moving forward to become better partners.
Most Valued and Desired Attributes of Asset Managers
We asked respondents what the most valuable and/or helpful thing is that a firm they work with does when working with their home office and due diligence teams, and what one thing asset managers should start doing. The recurring themes from the most recent round of responses indicated that home office teams continue to value proactive communication catered to the audience, specifically in regard to portfolio updates, trade rationale, factor/style attribution, and access to portfolio managers/investment specialists. Unsurprisingly, the responses also mentioned that research and due diligence teams were looking for partners to have a better understanding of their needs and business. Still, an interesting new throughline was the desire for managers to have knowledge of the competition's products and how funds/managers fit into an overall portfolio.
Least Valued and Desired Attributes of Asset Managers
We also asked respondents what their biggest complaints are regarding how asset managers work with home office and due diligence teams, and what one thing asset managers should stop doing. The recurring themes from the most recent round of responses indicated that they continue to dislike firms pushing products on a hot performance streak and the marketing of returns, as well as providing general information on strategies not covered or frequent/overzealous requests for check-in meetings.
While many of the wants, needs, likes and dislikes of research/due diligence teams remain unchanged, the responses from our 2022 survey emphasize that there are no shortcuts to gaining access or placement at these key distribution targets. Managers must build the relationship by listening and providing support in order for trust to follow.
Written by Noah Levin
Strategic Business Consultant Advisor