professional advice channel

MaryW commented on the word professional advice channel

In today's market, asset management services are distributed to US-based investors primarily through five principal distribution channels: direct, professional advice, retirement plan, supermarket platforms and institutional.

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2. Professional advice channel. In 2012 53% of households owning investment products purchased them through the professional investment advice channel. This includes a very

broad range of professionals operating under many different titles: financial advisors, private bankers, registered investment advisors, full-service brokers, independent financial planners, investment service representatives of banks and savings institutions, insurance agents and accountants. The most important feature of this channel is the provision of high value-added services to the end client, “high touch” personalization

and ongoing customized assistance that may include retirement planning, insurance, lending and liquidity solutions, such as secured loans and jumbo mortgages, and even succession planning and tax advice. Most distribution through this channel will require a revenue-sharing agreement where the manager pays a portion of their management fees to the distributor — fees that effectively reduce the manager’s bottom line. While this channel may be the costliest route for asset managers, given that managers usually have limited, if any,

direct client relationships, it is arguably the most viable channel for successful distribution, particularly for smaller firms that lack the resources to build a national sales network.

Ernst & Young, Sea of Change on the Horizon: US Fund Distribution 2014 (2014), pp. 5-6

December 28, 2016