Asset Manager Digital Strategies Drive Investment Inflows, J.D. Power Finds

The financial services wholesaler lunch-and-learn event is dead. Long live online webinars, websites and active social media accounts. While the ranks of wholesalers were already shrinking prior to the pandemic, the arrival of COVID-19 has only accelerated the trend toward more digital engagement between asset managers and financial advisors. According to the J.D. Power 2020 Advisor Digital Engagement Study,^SM released today, asset managers who have the highest levels of digital engagement with advisors are also achieving the best brand perceptions and reaping the largest inflows of new investment from those advisors, while asset managers with less digital engagement are falling further behind.

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“For asset managers in the current marketplace, forging and maintaining successful relationships with advisors is increasingly about effective digital engagement,” said Mike Foy, senior director of wealth and lending intelligence at J.D. Power. “That trend has been occurring for some time, but it has really ramped up during the pandemic, with wholesalers unable to meet face to face and advisors citing higher levels of stress and increased workloads. Against this backdrop, asset managers need to provide easy access to relevant content and resources across multiple digital channels, including content that can help them do their job more effectively and build their practice.”

Following are some key findings of the 2020 study:

• Effective digital strategy drives advisor intent to invest: Asset managers who build strong digital relationships with advisors see significantly higher investment inflows from those advisors. Specifically, the top four asset management firms earning the highest scores across multiple digital experiences—Capital Group, BlackRock, JP Morgan and MFS—also have the highest levels of intent to invest among advisors.
• Time-pressed investors need easy access to information: Because of the pandemic, advisors are pressed for time more than ever before, with 58% citing increased stress and anxiety, and 25% saying their work hours have increased. Accordingly, digital engagements that resonate most are those that provide easy access to asset management content and resources.
• Webinars win the day: Among the different types of digital interactions, webinars show the largest increase in advisor engagement, with 56% of advisors saying they’ve attended their primary asset management firm’s webinar in the past six months, up from 34% in 2019. Email and websites also have seen year-over-year growth in utilization, along with social media.
• Advisors remain skeptical about ESG commitment: A company’s commitment to environmental, social and governance (ESG) issues is one of the most significant drivers of asset manager reputation, and 55% of advisors say they are very likely to invest more in brands they identify as committed to ESG. However, advisors perceive only 15% of brands with which they currently work are genuinely committed to this issue.
• When it comes to digital, not all advisors are created equal: Asset managers need to understand which segments of advisors are most open to, and influenced by, digital vs. those who still want more personal interaction with wholesalers. Advisors with 16 or more years of experience in the industry are significantly more likely to rely on digital interactions with asset mangers than those who have only been in the industry five years or less. Likewise, independent advisors (and those who invest primarily in ETFs) are more likely than wire house brokers (and those who invest primarily in mutual funds) to rely on digital.

The 2020 Advisor Digital Engagement Study, now in its second year, evaluates how financial advisors digitally interact with asset management firms and how that digital experience affects their brand impressions and future intentions to invest client assets with those firms. Digital engagement is evaluated across multiple channels including email, mobile apps, podcasts, social media, webinars and websites. The study is based on 26,174 brand evaluations from 1,330 financial advisor respondents and was fielded from May through July 2020.

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