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Funds' Adviser Education Platforms Not up to Par: Unorganized, Deficient, Unimpressive, Corporate Insight Finds

In order to be a successful financial adviser, it is imperative to provide high-level service to clients and be knowledgeable about products, the markets and the investment management industry. But even the most adept advisers need help, via adviser education platforms, and, surprisingly, that's an area where mutual fund companies often fall short, according to a new report from Corporate Insight, a financial services market research and consulting firm based in New York.

Corporate Insight looked into adviser education platforms at 14 mutual fund companies and found that nine offered such resources, and of those, only five offered educational seminars: Alliance, MFS Investments, OppenheimerFunds, Putnam Investments and Van Kampen.

The firm based its evaluation of the various adviser education offerings by looking at whether fund companies included sales and business-building materials along with products and marketing materials. Corporate Insight also judged companies on whether they held in-person or Internet workshops, as well as the pertinence of these workshops, such as whether they addressed retirement planning, legislative changes and business conversion options. The consulting firm also looked at whether materials were downloadable from the Web.

"Firms should be addressing new products and any tax regulation and legislation changes that affect current products," said Alan T. Maginn, mutual fund senior analyst at Corporate Insight.

In addition, fund companies should offer advisers continuing education programs on a variety of topics, from increasing the organization and efficiency of their businesses, to new legislation, to meeting a wide range of client needs, he said.

Corporate Insight found that in most cases, the information funds made available to advisers on their Web sites regarding workshops and continuing education was fairly poor. In addition, phone representatives knew little about the programs and most of the time referred inquiries to the regional wholesaler.

Maginn suggested that firms provide a defined and centralized location on their Web sites dedicated to hosting adviser educational content and make any downloadable content easily accessible. Also, online and on-site seminars should provide continuing education credits for course participants. It is also essential for phone representatives at the parent companies to fully understand and be able to explain to advisers any of the available seminars, Maginn said.

Depending on the personality and learning style of individual investors, both online and in-person seminars could prove to be useful. Each has its own benefits. Online seminars allow advisers to learn at their own pace, while in-person seminars may help advisers incorporate the subject matter into their daily business by adding a level of personal experience to the seminar, Maginn said.

"The biggest concern for any adviser is the process of building and retaining a wealthy client base," Maginn said. "Therefore, whatever firms can offer in the way of business-building materials, in the form of sales ideas and presentations, are essential."

But there are other, related aspects of the adviser business that should be addressed, he continued. "For example, an asset allocation management tool that helps an adviser act more as a wealth manager than a fund purchaser is going to help them better serve their client base," he said.

OppenheimerFunds of New York offers an adviser education program called ClientConnect, which it dubs as designed to "build your business." Its practice management programs focus on how advisers can build their practices through targeted selling, such as college planning, stock options and retirement plans, noted Ellen Schoenfeld, vice president of educational initiatives at Oppenheimer.

Oppenheimer's ClientConnect is also designed to help advisers understand the implications of a changing industry, develop a higher level of professional knowledge, make their practice more efficient, improve their marketing and communication skills, increase quality referrals, attract clients, increase client retention and loyalty, and increase revenue and profits.

Oppenheimer tries to differentiate its support materials with the help of outside marketing and training experts, as well as financial analysts. "We gather the knowledge of the industry's gurus," Schoenfeld said.

Oppenheimer ties the educational support materials to sales as much as possible. "We try to be objective with information, but at the end of workshops, we may include a list of products that we offer," she added.

Many of Oppenheimer's workshops are geared toward building client relationships. They focus on the best practices of successful client-centered advisers and how to become more client-centered in one's own practice, while at the same time attracting additional assets from existing clients and increasing one's own income. Schoenfeld added that adviser educational needs have been changing with the industry. As hedge funds, SMAs and 529s have become more mainstream, financial advisers have begun asking for product education in those areas.

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