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Nuances Related to Women Investors

Posted by Anu Heda on Jul 01, 2011, in Thoughts

Last Thursday, I attended the Private Asset Management breakfast here in New York.  The events are always a treasure-trove of insights and topics related to the challenges facing family offices and trust managers.

The breakfast conveyed a panel to discuss women investors.  The eloquent panelists rattled off numerous data points, statistics, and anecdotes.  Of all that, two points still stick with me a week later.

  1. In their experiences, women are more apt to learn in groups.  The panelists all relayed stories about how women preferred meeting in person and when possible, meeting in groups of  women with similar issues and needs.  There was a desire to understand the relevant topics and terms.  Group settings were somewhere between sufficient and preferred.
  2. Women wanted their heirs to be more knowledgeable than they were in their own youth.  The panelists relayed the difficulties of preparing presentations and discussions for the heirs, often in their 20s – uninterested in long-term planning, and hoping for the best (i.e., no parental deaths in the near-future, optimistic views on  dividing the estate, etc.).

Neither point is Earth shattering, but valuable considerations when developing value-added programs, pitch books, and Sales strategies.

Making Passwords Easier to Remember

Posted by Mike McLaughlin on Jun 27, 2011, in Thoughts , tagged with , , , ,

A few months back, a Yahoo user posed a simple question:

How many online passwords do you have? How often do you forget the damn things?

The best answer, as selected by the asker: Too many and all the time.

This reality remains one of the consistently frustrating parts of Web strategy. In trying to deliver better online experiences for advisors and institutions, asset managers face a logic puzzle that can be summed up by three statements:

  • Clients want more personalized Web sites.
  • Firms can increasingly deliver more tailored experiences IF clients register and login.
  • Clients resist registering and logging in.

Over the years firms have tried hard to overcome clients’ resistance. Registration processes have been streamlined. Sites like Oppenheimer’s sell reasons why the user should sign up. But the password challenge lingers – the average person has more than 20 passwords to remember.

The industry hasn’t dug deep to find better solutions. Right now a forgotten password typically kicks off a multi-step process requiring:

  • A phone call, OR
  • The issuance of a temporary password via e-mail, followed by specification of a permanent password, OR
  • Both

It seems very few firms are actively exploring opportunities to make the tracking/recall of passwords easier. Embedding “hint” questions in the registration process and using those to facilitate direct recall of passwords is one option. Enabling users to utilize the login credentials they know best – via OpenID-based services from Google and Yahoo, for example – is another.

The point is – for all the work done to make it easier and more attractive to sign up for sites, less work is being done to make it easier to repeatedly log in time and time again. With all that firms have done to create excellent sites, this is a challenge that warrants more attention.

Best Blogs of The Week

Posted by Anu Heda on Jun 27, 2011, in Best Blogs of the Week , tagged with , , ,

This week’s best blogs includes a newcomer,  US Funds, and two list regulars.

  1. US Funds – This post explains the relationship between gold bullion and gold equities.  Though a bit long-winded, the write shares some valuable information and intuitive relationships between bullion and firms.
  2. BlackRock – I like posts that take a high-frequency news item and relate the issue to investors.  I can imagine many FAs valuing this post because it relates current economic and political uncertainty to investments.
  3. Vanguard – The post itself – get college graduates to save immediately – isn’t that interesting.  The video linked from it is interesting.  For advisors with clients with children in college, this video is a 90 second refresher on typical students’ perspectives.  That can be helpful in discussing investing with those clients and how-to speak to their children about the topic.

Advisors’ Use of Fund Firms: What’s the Truth?

Posted by Mike McLaughlin on Jun 22, 2011, in Thoughts , tagged with , , , , ,

Last week Cerulli Associates released a study built from a survey of over 1,800 advisors. As chronicled in Ignites (subscription), a key finding focuses on how advisors are using fewer mutual fund providers and “…the importance of cementing solid relationships to secure preferred provider status…”. A snippet of the relevant data:

  • 57% of advisors use 5 fund firms or less, up from 37% in 2009
  • 13% of advisors use 15 fund firms or more, down from 25% in 2008

The idea of concentrated mutual fund family usage has been increasingly trumpeted over the past few years. And I have no doubt that the data is reported accurately based on advisors’ responses. But I am dubious of the idea that so many advisors use so few fund firms. Two reasons why:

  • The first-hand knowledge we have of our clients’ data shows it’s common for firms to have huge numbers of small, single-product advisor relationships.

  • Many firms prioritize cross-selling over pure prospecting. Sales strategy and comp plans are frequently driven by the desire to build deeper, multi-product advisor relationships. Highly-concentrated assets among advisors, as indicated by the survey data, would seemingly dictate a greater focus on new client acquisition.

So what does this mean? Two takeaways:

  • Beware Self-Reported Data: I think it’s human nature to neglect the “long tail” of small positions within clients’ portfolios. There may be 5 primary firms used by advisors, but not 5 total.
  • Beware Aggregated Data: The survey is cross-channel and includes advisors with an average AUM of $50M. But fund firms typically have a more targeted, specific strategy than that. It’s important to isolate the subset of comprehensive data that is relevant and draw conclusions from there.

We’ve been involved in enough syndicated research to know that the data gathered always leaves room for interpretation. The findings here fit the bill.

Best of Blogs

Posted by Anu Heda on Jun 20, 2011, in Best Blogs of the Week , tagged with , ,

This week has two blog posts and an excellent tweet.  Both blog posts use research (one in-house, the other from AARP) to present a single topic effectively.

  1. Russell – The company continues to use visuals in manners way ahead of other managers.  With good tagging and organization, they will soon have an arsenal of visuals to supplement and support many different discussions with different target audiences.  In this post, Russell shares topics most discussed by financial professionals during Q2.
  2. Vanguard – This post explains how most 401(k) participants pay attention only to explicit fees and how the DOL is changing regulations to help participants better understand costs.
  3. BlackRock – New to twitter (outside of iShares), the tweet below resonates with many financial advisors.  In our discussions with FAs, many talk about QE2 and how they describe the topic to clients.

Tweet on QE2