Investment philosophy and costs most important fund selection factors for German intermediaries

Research by Fundamental Media finds that qualitative ratings are more important for advisers while fund manager tenure is a bigger focus for DPM-FS

Key points:

• German financial intermediaries pay the most attention to investment philosophy and costs when selecting funds.
• Research into a new fund is most often triggered by industry events, followed by recommendations from peers for advisers and editorial for DPM-FS.
• Intermediaries really appreciate webinars, events and presentations, especially when they are personal and direct.

German financial intermediaries pay the most attention to investment philosophy and costs when selecting funds, research by Fundamental Media found.

For financial advisers, qualitative fund ratings are the next most important factor, while for discretionary portfolio managers and fund selectors (DPM-FS) the third most important factor is the fund manager’s tenure.

From June to September 2023, we surveyed 175 financial intermediaries in Germany, consisting of 122 financial advisers and 53 discretionary portfolio managers/fund selectors, about their investment views, satisfaction with asset managers and media consumption. The Germany engagement report is part of our European financial intermediaries research, which also includes reports on the UK, Italy, France, Spain, Switzerland and the Netherlands.

Research into a new fund is most often triggered by industry events, followed by recommendations from peers for advisers and editorial for DPM-FS. When researching, intermediaries most often look for the fund’s performance and investment strategy. Advisers are more interested in factsheets, while DPM-FS look into fees more.

When selecting ETFs, costs are the most important factor for both audiences, followed by transparency for advisers and low tracking difference for DPM-FS.

Financial intermediaries in Germany really appreciate webinars, events and presentations, especially when they are personal and direct. The most appreciated topics were sales support and insights and research.

Product insights of asset managers’ salespeople were highly regarded, as well as their proactive and regular contact in person or online. When asked about where asset managers could improve their communications, intermediaries mentioned faster processing of enquiries and direct contact with fund managers to better understand their investment strategy and thought process.

Other findings from the 2023 Germany engagement survey include:

• German intermediaries are the most likely to increase their clients’ exposure to global equities, fixed income and emerging market equities, while real estate is likely to see the largest decrease.
• The vast majority of respondents is either very or quite satisfied with the asset manager(s) they work with. Online events and communication are the areas of support where satisfaction is the highest. Market trends and analysis are the main topics where intermediaries would like to see more support.
• The majority of German intermediaries receive print publications at home, while receiving them at home has sharply declined. Desktop remains the most used format for intermediaries to read specialist media. WhatsApp and LinkedIn are the most used social media, mostly to network with peers and to read/watch industry news.

For access to the full reports, contact [email protected]