Fundamental Research reveals what discretionary portfolio managers, fund selectors and other financial intermediaries find most important when buying a fund

Key points:

  • The perceived quality of the manager has the strongest correlation to propensity to buy
  • Being perceived as a partner results in most respondents ranking ‘propensity to buy’ higher than being seen as corporate or a supplier
  • It is imperative for managers to get across the message of quality by designing clear propositions and communications

Financial intermediaries ranked their likelihood of purchasing a fund from a manager they perceive as personable or a partner higher than from those they perceive as more corporate or a supplier, according to research by Fundamental IQ, the research arm of Fundamental Media.

For the Global Brand Survey report, we surveyed retail and wholesale financial intermediaries in the UK, Germany, Italy, France, Spain, the US, Switzerland and Australia. To understand their perception of asset managers’ brands, we have developed a ‘brand equity index’ using a combination of quantitative and qualitative methods along five pillars: brand recall, familiarity, perceived quality, propensity to buy and distinctiveness.

The ‘propensity to buy’ score assesses the likelihood to increase the exposure to a brand. When correlating this score with those from the other four brand factors, we see that financial intermediaries’ view on asset managers’ ability to generate returns is the main consideration when buying a fund, as ‘perceived quality’ has the strongest correlation to ‘propensity to buy’.

The ‘distinctiveness’ score encompasses fourteen prompted brand values and qualitative comments for each asset manager. While a high ‘distinctiveness’ score might not necessarily translate in a positive perception of the brand – hence the lower impact on’ propensity to buy’ compared to other brand factors – single components of the score represent a powerful indicator when looking for key differences across markets, as is shown in the table below.

In most markets, companies perceived as more personable or a partner showed a higher ‘propensity to buy’ compared to companies perceived as more corporate or a supplier. However, the correlation is more pronounced in some markets than in others.  

The table shows the correlation between the prompted brand values and propensity to buy in each of the markets surveyed.  Respondents were asked to choose from opposing values, which were asked in pairs and as opposites (e.g. broad vs targeted; quantitative vs qualitative). A positive correlation with one value is therefore automatically a negative correlation with the opposite value.  

Interestingly, Switzerland is the only market where respondents prefer asset managers that are more corporate, and ‘broad’ and ‘analytical’ are the values most highly correlated with propensity to buy. This could be explained by the presence of some of the world’s largest bank groups as well as relatively large investments in ETFs.

Similarly, in Italy, where fund distribution is dominated by large bank groups, being perceived as corporate as opposed to personable wasn’t considered a deterrent to the propensity to buy, but there is a preference for companies that are perceived as qualitative. 

In the UK, financial intermediaries do not show a clear preference for any of the prompted brand values, except for a slight preference for asset managers that are personable and a partner. Being perceived as analytical is a clear advantage for asset managers hoping to win business in Germany and Switzerland, where financial intermediaries are more data-driven than their peers in other countries.

The higher positive scores for values such as ‘tried and tested’ and ‘careful thinking’ in the US show a preference towards large, traditional and well-established asset managers. 

Getting across the message of quality

While the research has uncovered specific preferences in each market, the importance of perceived quality can be observed in all countries surveyed.

Perceived quality is not only the main indicator of financial intermediaries’ propensity to buy; it also stood out in our ranking of the leading asset management brands. The top ranked manager in each market was also ranked highest on perceived quality, except in Spain where Bestinver received the highest ranking on perceived quality but ranked second on brand overall.

It is therefore imperative for managers to get across the message of quality by designing clear propositions and communications. Hence, capturing the distinctiveness of strategies, asset classes and the overall added value of an asset manager should be centre stage.

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