The Online Advantage: Findings from the Advisor Perspectives Mutual Fund-Site Survey

Faced with products that are constantly falling in and out of favor, fund companies find it increasingly challenging to gain advisors’ loyalty. New research from Advisor Perspectives shows that offering outstanding online research and due-diligence capabilities is key for fund companies that wish to win the competitive battle for the time and attention of financial advisors.

Fund company websites are the third most common source of fund-related information used by advisors, the research shows, and the quality of a fund company’s online capabilities plays an important role in advisors’ decisions to use a company’s products. And while tablets and smartphones haven’t yet replaced PCs as the computing platform of choice, more than half of advisors use these devices at least once a month to access fund-site data.

These findings are based on the results of an online survey conducted by Advisor Perspectives in January 2013. A total of 282 investment advisers, registered representatives, financial planners and insurance agents responded.

’Online’ is as important as ’in-person’

Only about a decade ago, advisors relied primarily on fund wholesalers to provide in-depth information on funds, and most of this information was only available in printed form. This is no longer the case.

Key Resources Advisors Use for Fund-Related Information

Survey respondents reported that independent research sites like Morningstar and interactions with fund wholesalers are their most common source of fund-related information, but fund websites are a close third. Advisors are far more likely to use these sites than respond to emails from fund companies or solicit opinions from other advisors.

There is a correlation between the resources advisors use and the level of assets they manage.

Use of Fund Sites vs. Wholsalers by AUM Levels

Advisors who manage larger pools of assets tend to rely more on wholesalers than fund sites, while the reverse is true for advisors with fewer assets under management. This is understandable, because wholesalers tend to focus their efforts on cultivating and serving the top advisors at larger firms. Those who aren’t considered ‘top-tier advisors generally don’t have the same level of access to wholesalers and rely more on their own efforts to find fund-related information.

Fund sites are critical research tools

Nearly all advisors rely on fund company sites to aid in their research and evaluation efforts.

Percentage of Advisors' Due Diligence Information

On the whole, more than half get at least 25% of their due-diligence information from fund sites. Nearly one in four rely on these sites for more than 50% of this data.

The more money an advisor manages, the more he or she uses fund sites for research purposes.

Advisors' Usage of Fund Sites for Due Diligence

Those who manage $100 million or more in assets utilize these sites for a greater percentage of their due-diligence information than those with smaller pools of assets. This may be because top-tier advisors use a broader range of funds and fund families and are expected to deliver a higher level of performance analytics to their clients.