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Online Adviser Tools Are All Sizzle, No Steak


Funds' Efforts to Woo Advisers Are Missing the Mark, Planners Say

Fund companies continue to add tools to their adviser Web sites to draw in and help planners build their businesses, but planners say they don't need those tools and much of the revamped sites are useless.

Last month, when a speaker at a conference organized by Royal Alliance for the advisers in its network promoted online tools as a marketing mechanism that advisers can offer clients, several in attendance scoffed. The tools offer nothing that advisers don't already have or that investors want to use on their own, one planner said at the time.

What advisers want from fund companies are direct portfolio manager communications and industry research that helps them promote investing in funds in general, not those of a single institution, according to further interviews of planners from around the country.

Yet, this year, investment companies have stepped up their Web site interaction capabilities, particularly for advisers. However, they are largely underutilized, according to a report on e-business strategies issued this month by consultant kasina.

SEI Investments and TD Waterhouse are two examples of firms that have launched investment tools geared to financial advisors in the past two months. The collaboration tools include financial calculators, tax efficiency models and Monte Carlo' simulations.

"As more asset management companies transition to e-wholesaling, collaboration tools will be an integral aspect to this new mode of communications and relationship building," according to the kasina report.

Wrong Tools for the Job

But if you ask the planners themselves, that's not what they're looking for. Any of the tools that are critical to promoting a planner's business, usually as a feature that they can offer clients, are already incorporated in most advisers' own software.

"What I want from the fund companies is not so much the fancy tools that A has and B has and C has," said Mark Snyder, who heads Mark J. Snyder Financial Services, a Long Island, N.Y., financial planning firm. "We have our own software that gives us those tools. What I want is to hear about the manager's philosophy and strategy."

To communicate that, Snyder looks for portfolio manager commentary and, ideally, manager availability, instead of the online tools. Snyder gets information from wholesalers, and while some are more helpful than others, the best thing is to be able to hear from a portfolio manager, he said. Snyder hosts a radio show and recently had famed First Eagle SoGen Funds portfolio manager Jean-Marie Eveillard on as a guest.

"I cannot tell you how helpful that is," he said. "It makes a difference if you can get to know the managers."

Of course, fund firms cannot make their managers constantly available to advisers with questions. However, even written manager commentary that explains strategies behind a fund will draw Snyder to a firm's site before a collaboration tool will, he said.

Money Talks

"What we need from the funds we work with is financial support and support of our marketing efforts," said Ric Edelman, whose firm Edelman Financial Services includes 18 planners. "Radio, TV, seminar activities, it's all very expensive. And we don't need them to set up seminars. We like to develop our own. We don't need the online tools or things like that. What we need from them is to target the money and help us financially with mass marketing. That is or is not a welcome message, depending on the fund complex."

Supporting marketing efforts financially is not the most welcome message for most firms, but there are other ways to support adviser marketing efforts that are much more useful than a lot of what fund firms provide, Edelman said. He looks for fund research that educates consumers and communicates messages that he wants consumers to hear and that can be incorporated into his firm's own marketing materials.

That includes research on diversification, historical market performance in a variety of movements and some analysis on investing in different sectors, he said.

While that data can be incorporated into proprietary marketing materials, research on funds of one particular firm cannot and doesn't do much to convince an adviser or a client, according to Snyder.

"A lot of the companies send me Wiesenberger analysis of the funds, but it's only of their funds and so it's essentially useless," he said. (Wiesenberger is owned by Thomson Financial, publisher of MFMN.)

Both Snyder and Edelman suggested that individual planners who work on their own might have a need for online tools provided by fund firms, but even small independent planners say they have little use for them.

"To be honest, I don't need that stuff," said an adviser with less than $10 million in assets, who wished to remain anonymous. "The tax implication tools, the simulations, I have software that does that. I think they offer that to get me on the site, but frankly, it doesn't get me there. I don't use it."

Michael Halberstadt, a solo planner in Los Angeles, echoed that sentiment. If a firm puts information on its site that offers data about a fund that are not widely available, such as turnover rates, that will get him to the site.

"I know there are a lot of new features and tools coming out, but I don't really use any of them" said Halberstadt. "I do a lot of work with American Funds. They're very clear in their marketing materials about what they do with their funds. That, to me, is the most important thing."