Cogent Reports Sees Shift in Provider-to-Adviser Communication

Reflecting the change in their own clients’ expectations, more financial advisers say they prefer to receive general thought leadership and market commentary from service provider partners, in lieu of more product-specific updates.

There has been a big push in recent years by clients of advisory firms for more holistic guidance that looks beyond specific fund families and products to consider deeper trends and longer-term goals.

According to Cogent Reports, this demand for more holistic advice from clients is starting to reshape the way advisers themselves communicate with both new and trusted product providers. The firm put on a series of 18 industry focus groups during March, speaking with some 85 advisers from across the United States broken down in a representative mix of age, channel and assets under management—finding there is a clear evolution going on in the way advisers interact with providers.

“In sharp contrast to other types of marketing, many advisers in this group said they would read thought leadership from an unfamiliar mutual fund, ETF or VA provider,” Cogent Reports explains. “In fact, advisers prefer thought leadership and market commentary to comprise a larger percentage of the marketing content they receive in lieu of more product-specific updates.”

Researchers suspect this growing aversion for product marketing is being driven by a number of factors, including most notably the ongoing regulatory reform out of the Department of Labor (DOL), which many suspect will push advisers away from product-based brokerage work towards true financial advice that is more personal and product agnostic. Other factors include greater fee transparency, difficult macroeconomic conditions, and increasing demand from advisers’ clients for genuinely new ideas that go beyond the traditional advice elements of stock and bond allocations.  

“Undoubtedly, a variety of factors spanning format and content comes into play when creating and delivering effective thought leadership,” Cogent Reports explains. “Advisers’ wish lists run deep. Thought leadership should be forward-thinking, actionable and uniquely topical, yet unbiased and sophisticated with a simple, clean design.”

Interestingly, many advisers even went so far as to suggest they would rather “hear from a star manager about taking a bold stance and get it wrong than be plagued with similar product-based content from a variety of providers.”

NEXT: What advisers want from product providers 

Breaking down advisers by the way they prefer to receive and handle marketing materials from providers, Cogent Reports finds four clear divisions of pretty equal size.  

First are the “insight enthusiasts,” making up roughly 28% of financial advisers. Cogent Reports finds this group is “open to receiving marketing materials in any form with an eye toward incorporating new ideas into evolving investment and business practices.”

Next are the “data vaulters,” making up about 29% of the advisory population and described as “collectors of marketing material, primarily to affirm and support current business and investment practices.” Unlike with the others, in this group, concerns about gaps in knowledge “drive a preference for market updates and product-focused reference materials.”

Third, Cogent Reports describes the growing group of “digital devotees,” advisers who are “proactive integrators of digital content and information into new and expanding business models.” This group, which makes up about 27% of advisers, “also places high value on mobile applications and web-based solutions as core tenets of a paperless approach to servicing clients.”

Finally, the report names a smaller group of advisers, dubbed the “selective oracles,” making up about 17% of the advisory population. This group acts as “screeners of content in search of unique and valuable insights to enrich knowledge … [and] places high value on thought leadership while spurning the use of provider-generated product materials in client interactions.”

These findings are from the “Cutting Through the Marketing Clutter” study published by Cogent Reports. More information is here