Vanguard Most Trusted Fund Brand Among RIAs

By Cyril Tuohy

Vanguard Group, DFA and American Funds are the three mutual fund company brands registered investment advisors (RIAs), trust the most and with whom RIAs are therefore most likely to invest, a recent study shows.

Among all advisors, the top three mutual fund company brands are American Funds, Franklin Templeton and BlackRock. This is according to the 2015 Advisor Brandscape study released by Cogent Reports, a division of Market Strategies International.

“The leading firms in association with trust among RIAs, Vanguard and DFA, have a long history of building strong connections with advisors in the RIA market,” Meredith Lloyd Rice, senior research director at Market Strategies and lead author of the report, said in an email to InsuranceNewsNet.

“Their investment philosophy and focus on passively-managed investments also aligns with RIAs’ investment approach,” she said.

Passive investment management strategies over time are considered far more efficient than active management strategies where transaction fees eat into returns.

Other surveys have shown advisors shifting to more passive strategies. But with low interest rates, advisors say active management matters to generate more yield out of fixed-income investment portfolios.

Results from the Advisor Brandscape study were tabulated from an online survey of 1,390 financial advisors from January to March 2015.

Respondents were required to have an active book of business of at least $5 million and offer advice or planning services to individual investors on a fee or transactional basis.

The Brandscape study grouped advisors into five sales channels: wirehouses, regional advisors, independent advisors, banks and RIAs.

American Funds, BlackRock and Franklin Templeton dominated the top three slots among four of the five primary retail distribution channels: wirehouse, regional, independent advisors and banks.

But in the RIA channel, Vanguard, long known for its low-cost index funds, and DFA were named as the most trusted mutual fund brands, with American Funds coming in third.

“It’s clear from these findings that even some of the biggest asset managers still have their work cut out for them in building grater trust among RIAs,” Rice said. “But with so much focus on this increasingly important channel, we expect nothing less than an all-out effort to win that trust.”

The 10 most trusted mutual fund company brands among all advisors were: American Funds, Franklin Templeton, BlackRock Funds, Vanguard, Fidelity Investments/Advisor Funds, Oppenheimer Funds, MFS Investment Management, T. Rowe Price, First Eagle and DFA.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at cyril.tuohy@innfeedback.com.