Cogent Reports: Advisors Concentrating Mutual Fund Assets with Fewer Providers

CAMBRIDGE, Mass.--()--Advisors have more money than ever currently invested in mutual funds, but they are choosing to work with fewer providers overall, and increasingly concentrating more assets with their primary mutual fund provider. These and other findings are included in the 2014 annual Advisor Brandscape® report from Cogent Reports™, a division of Market Strategies International.

According to this year’s report, advisors have, on average, just over $42 million invested in mutual funds, up from $36.8 million a year ago. The current average by channel ranges from $21 million among Independent planners to $124 million among RIAs. Yet, despite the rise in mutual fund assets, advisors report working with fewer fund providers: 10.1 in 2014 compared with 10.8 in 2013. In addition, the proportion of mutual fund assets being managed by advisors’ primary provider has increased 18%, from 33% in 2013 to 39% in 2014.

“The consolidation story we were tracking for a number of years flattened out last year,” said Meredith Lloyd Rice, senior product director at Market Strategies and author of the report. “But the trend came roaring back to life this year, especially among Wirehouse advisors and RIAs, where we saw the most significant declines in the number of fund managers being tapped along with big increases in money concentrated with a single provider.”

In addition to identifying all of the providers they currently use, Cogent Reports asked advisors to identify the one fund company to which they entrust the biggest share of their mutual fund dollars. DFA and American Funds enjoy the highest percentage of primary users overall. The results reveal that only two of the 44 firms covered in the report, BlackRock and PIMCO, experienced a decline over the past year in the proportion of users who consider these firms to be their primary mutual fund provider. In contrast, three firms—Ivy Funds, American Century Funds and Goldman Sachs—experienced significant increases during the same period, while Lord Abbett and T. Rowe Price have made notables strides compared with 2012.

“As advisors pare down the number of asset managers they work with, it is increasingly important for firms to focus on deepening their share of assets with current users,” said Rice. “Advisors overall invest twice as much money with their primary fund provider compared with their secondary provider—and among RIAs it’s three times as much. So, if establishing a relationship is like getting on first base, becoming an advisor’s primary provider is hitting a grand slam.”

Primary Mutual Fund Status Among Current Users

(Top 20 Firms)

Rank   Firm Name  

% Of Users for Whom
Firm is Primary Provider

2014   2013            
1   1   DFA (Dimensional Fund Advisors)   49%    
2   2   American Funds   34%    
3   8   Russell Investments   22%    
4   4   Charles Schwab Investment Management   18%    
5   5   Franklin Templeton Funds   17%    
6   3   Vanguard   15%    
7   6   BlackRock Funds   13%   ▼‘13‘12
8   9   Columbia Funds   10%    
9   11   Fidelity Investments/Advisor Funds   10%    
10   15   Lord Abbett Funds   9%   ▲‘12
11   7   PIMCO Funds   8%   ▼‘13‘12
12   17   John Hancock Investments   8%    
13   10   OppenheimerFunds   8%    
14   12   DoubleLine   8%    
15   26   Ivy Funds   8%   ▲‘13
16   32   Principal Funds   8%    
17   29   T. Rowe Price   8%   ▲‘12
18   34   American Century Funds   7%   ▲‘13’12
19   22   Hartford Funds   7%    
20   20   Prudential Investments   7%    


▲/▼ = Significant change from stated year
Base: Mutual fund producers using the firm
Source: Market Strategies International. Cogent Reports™. Advisor Brandscape(®): July 2014
© Market Strategies International

About the Advisor Brandscape® Report

Cogent Reports conducted an online survey with 1,437 financial advisors from February to April of 2014. In order to qualify, respondents were required to have an active book of business of at least $5 million and offer investment advice or planning services to individual investors on a fee or transactional basis. Cogent Reports set quota targets and weighted the data to be representative of the overall advisor universe using the Discovery Data Financial Services Industry database as a sample source. Market Strategies will supply the exact wording of any survey question upon request.

About Market Strategies International

Market Strategies International is a market research consultancy with deep expertise in consumer/retail, energy, financial services, healthcare, technology and telecommunications. The firm is ISO 20252 certified, reflecting its commitment to providing intelligent research, designed to the highest levels of accuracy, with meaningful results that help companies make confident business decisions.

Market Strategies conducts qualitative and quantitative research in 75 countries, and its specialties include brand, communications, CX, product development, segmentation and syndicated. Its syndicated products, known as Cogent Reports, help clients understand the market environment, explore industry trends and monitor their brand and products within the competitive landscape. Founded in 1989, Market Strategies is one of the largest market research firms in the world, with offices in the US, Canada and China. Read Market Strategies’ blog at FreshMR, and follow us on Facebook, Twitter and LinkedIn.


Market Strategies International
Anne Fallon, 617.715.7611

Release Summary

While financial advisors have more money than ever invested in mutual funds, they are increasingly working with fewer providers and concentrating their assets with their primary provider.


Market Strategies International
Anne Fallon, 617.715.7611