Value-Added Programs Need Better Link to Adviser Brand

A new report calls for asset managers to create initiatives that are more effectively tied to a firm’s brand and market position as understood by the adviser, providing a logical connection to a specified family of investment products.

A study by kasina, a consultant to the financial services industry, found that look-alike value-added programs often fail to link financial advisers to a specific family of investment products, so ideas and materials from one fund group are used to support sales from competitors. The consultant defines value-added programs as information and tools used to grow an adviser’s book of business, educate the adviser in a meaningful way, or to facilitate the adviser’s ability to meet client needs, according to a company press release.

“We see asset managers investing anywhere from $100,000 to $1 million annually in designing and disseminating value-added programs for advisers with little or no impact on assets under management,” said Anu Heda, manager at kasina, in the release. “In many cases, advisers simply take the concept from one asset manager and use it to support the sale of someone else’s product. Not only are they not helping their own sales, they are in effect underwriting the efforts of their competitors.”

The study found 67% of industry marketing executives are unsure of the value of these initiatives as they are presently constituted, and kasina notes that part of the challenge stems from too many asset management firms thinking alike in developing value-added programs, targeting IRA rollovers, college savings plans, and the boomer retirement income market.

Kasina suggests that once asset managers identify logical areas of opportunity, they:
• Improve their ability to segment the targeted advisor population – delivering programs only to those advisers with a relevant need. This segmentation should be based on adviser preferences and behaviors, not on the distribution channel,
• Fine tune the overall outreach process with an emphasis on better communications between marketing and sales and stronger wholesaler programs, and
• Put in place the tools required to measure the effectiveness of every value-added program launched by the firm, with new asset flows as the single most important metric.

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