Brand Conscious, But in Different Ways

Affluent investors seem to love direct retirement product providers, but advisors’ favorite brands vary by distribution channel. Everyone seems to like American Funds.

Affluent investors and financial intermediaries (brokers, advisors) apparently don’t see eye to eye when asked to name their favorite financial services companies, according to two sets of data released recently by Phoenix Marketing International.

When surveyed by Phoenix, the two groups were not asked the same question. Affluent investors were asked to name their ten favorite providers of retirement products. Advisors were asked to name their ten favorite fund companies.

Many of the differences in the lists, which were generated over several survey periods and among advisors in five different distribution channels, seemed to boil down to the simple fact that the investors favored direct providers and the advisors didn’t. American Funds, however, appeared frequently on both sets of lists.  

Affluent investors’ picks

Among investors, Fidelity, Vanguard and USAA had the “highest overall brand impression and consideration as a provider of retirement products and services among affluent investors,” according to four separate surveys by Phoenix Marketing International between May 2011 and November 2012.
Phoenix Investor Preferences 11-2012

Fidelity ranked first in three of the surveys, and USAA ranked third in all four. Vanguard ranked first in the May 2012 survey and second in the other three. Other companies consistently placing among the top 10 were TIAA-CREF, T. Rowe Price, Charles Schwab, ING, and American Funds.

The presence of Vanguard, Fidelity, T. Rowe Price, Schwab and TIAA-CREF on the survey listings suggests that affluent investors are very familiar with the direct and low-cost providers, many of whom specialize in passively-managed index funds. The results of the latest survey can be seen at right.

Advisors’ picks

PIMCO, which specializes in actively-managed bond funds, was ranked among the top five brands, based on “overall impression and consideration to recommend,” by advisors in all five distribution channels. Otherwise, Phoenix found that advisors’ “overall impression and likelihood to consider for recommendation to their clients in the next six months, varies by the advisor’s role and type of firm where they are employed.”

BlackRock was among the top 10 in all five channels. Vanguard, which was rated first by Registered Investment Advisors, was among the top 10 in only one other channel, regional broker dealer, where it was ranked ninth.

Fidelity was on every list except for regional broker dealer, but was never ranked higher than third. American Funds was ranked first or second in each of the three broker-dealer channels, and was seventh in the RIA channel, but was not among the top 10 at national full-service firms (wirehouses). MetLife was on every list but the independent broker-dealer. Franklin Templeton was on every list except insurance broker-dealer.

Advisors in the wirehouse channel were the only ones to list wirehouses among their ten favorite brands (Morgan Stanley and JP Morgan Chase). Similarly, advisors in the insurance broker/dealer channel listed six insurance companies (Genworth Financial, Lincoln Financial, New York Life, Mass Mutual, Prudential, and MetLife) among their most respected brands.

About the surveys

The semi-annual Phoenix study among affluent individual investors has been conducted since November 2008 and was last administered in November 2012 among 1,447 respondents. Study data are representative of the U.S. population by age and geography. Also reported are detailed evaluations of Print and TV advertisements, plus investors’ likelihood to consider such leading brands such as:

Aetna, AIG, Allianz, American Century, American Funds, Ameriprise, Aviva, AXA, Berkshire Life, Charles Schwab, CNA, Columbia Funds, E*Trade, Edward Jones, Fidelity Investments, Franklin Templeton, Genworth Financial, Goldman Sachs, Guardian, The Hartford, ING, Invesco, Jackson National, Janus, John Hancock, Lincoln Financial, MassMutual, Merrill Lynch/Bank of America, MetLife, Morgan Stanley Smith Barney, Mutual of America, Nationwide, Northwestern Mutual, NY Life, Oppenheimer, Pacific Life, PIMCO, Prudential, Putnam, Raymond James, State Farm, Sun Life, TD Ameritrade, T. Rowe Price, The Principal, TIAA-CREF, Transamerica, Travelers, US Trust/Bank of America, Vanguard, and Wells Fargo.

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