Products October 12, 2011

MATC Lowering Price of Investment Management Platform

Mid Atlantic Trust Company (MATC) is offering reduced pricing for its ModelxChange service.   
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The lower pricing is due to the increased number of 401(k) accounts being placed on ModelxChange, according to MATC.  Previously priced at 15 basis points, the new price is a flat fee of 3.5 basis points. This includes unlimited trading, portfolio rebalancing, and fund or ETF swaps.

ModelxChange was launched by MATC in December 2010 (see “New Investment Management Platform for 401(k)s”).  The platform allows 401(k) professionals to incorporate mutual fund and/or ETF investment models into a retirement plan through a single, Web-based interface that allows for the creation, execution, and on-going management of investment models for a 401(k) plan.  Managers can set-up and manage their investment models on ModelxChange and then deliver those models and the investment changes to each individual plan.   

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MATC says ModelxChange can deliver numerous benefits to the 401(k) investment adviser, including access to a stable of third-party money managers who can provide models comprised of ETF’s and/or mutual funds.  To aid in the due diligence screening process, Mid Atlantic provides manager profiles, descriptions, performance data, and other details of each model, reducing the amount time required to review the myriad of data in order to make an effective choice for a client.   

ModelxChange is an outgrowth of its predecessor ETFxChange, which also has a reduced price. For those still using ETFxChange where ETFs are a stand-alone investment vehicle in a 401(k) plan, Mid Atlantic Trust will be extending a new price schedule starting this month.

In Practice October 12, 2011

Advisers See Word of Mouth Marketing as Most Effective

Many financial advisers are not using the most efficient marketing tactics, according to a survey from ByAllAccounts, Inc., an account aggregation service firm. 
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More than 42% of advisers rely on word of mouth and referrals for new business, while only 12% of respondents have a dedicated marketing team or staff member.

“It’s not surprising to see so many advisers relying on referrals,” said Cynthia Stephens, ByAllAccounts vice president of marketing. “The real question is whether they are proactive around that strategy or simply waiting for it to happen. Overall, most advisers rated the effectiveness of their marketing efforts as low.”

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More than 62% of the 200 advisers surveyed utilize their Web sites for marketing. Other commonly used marketing techniques are:

  • seminars/events (56.1%)
  • email (51.4%)
  • newsletters (47.4%)
  • direct mail (30.1%).

In terms of effectiveness, however, referrals ranked #1, followed by seminars/events, and Web sites as #2 and #3 respectively. In fact, when rating Web sites for effectiveness in new client acquisition, more than 73% rated it either neutral, somewhat ineffective, or not effective at all – and 11.2% of respondents do not even have a site.

The survey also addressed the use of marketing metrics and technology. Fifty-four percent do not track visitors to their Web sites and 47% have not gone through a search engine optimization (SEO) process. Only 7.4% of respondents are currently using marketing automation technology, but those who do utilize it rated the effectiveness of their marketing much higher than those not using marketing automation (75% versus 48%), despite having a slightly smaller marketing budget.

Based on the results of the survey, Stephens offers the following suggestions to advisers who are looking for ways to improve the effectiveness of their marketing efforts:

  • Take advantage of free tools like Google analytics to track Web site traffic, improve site performance and better understand your prospects.
  • Decide if you want help from an outsourcer. If you are going to do it yourself create a marketing plan.
  • If you plan to do marketing in house investigate marketing automation solutions and other technologies to see what's right for your firm.

"While there are no magic bullets," added Stephens, "a systematic approach can make an enormous difference."

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