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Man Group to Acquire Pine Grove AM to Strengthen its Fund of Hedge Funds Business

Man Group compra la estadounidense Pine Grove para reforzar su negocio de fondos de hedge funds — Photo: ESO. Man Group to Acquire Pine Grove AM to Strengthen its Fund of Hedge Funds Business

Man Group has agreed to acquire Pine Grove Asset Management LLC, a US-based fund of hedge fund manager specializing in the management of credit-focused hedge fund portfolios with approximately $1.0 billion of assets under management. The transaction is subject to customary closing requirements and is expected to close in the third quarter of 2014. Financial terms of the transaction were not disclosed.

Pine Grove is a credit-focused fund of hedge fund manager, founded in 1994, with offices in Summit, NJ and New York City. The firm is employee-owned, with senior investment professionals having on average 18 years of direct investment management experience. Since inception, the firm’s hedge fund selections and portfolio management have delivered attractive risk-adjusted returns across market cycles. Approximately two thirds of Pine Grove’s assets are from institutional investors, primarily US-based, with the remaining third from US high net worth individuals and family offices.

Pine Grove will enhance Man Group’s presence in the US and add to Man Group’s fund of hedge funds business, FRM. Pine Grove will also reinforce FRM’s efforts to offer clients a wide variety of investment opportunities including SEC-registered US 40 Act funds and complementary fund of hedge fund products.

After closing, Pine Grove’s investment philosophy, strategy and approach will remain unchanged, and the firm will benefit from Man Group’s robust institutional infrastructure. Matthew Stadtmauer, currently President of Pine Grove, will become President of FRM. Tom Williams, currently Pine Grove’s Chief Investment Officer will continue to be responsible for all investment decisions relating to Pine Grove’s portfolios and will join FRM’s Investment Executive committee.

Commenting on the transaction, Luke Ellis, President of Man Group, said, “FRM’s longstanding strategy has been to help investors use hedge funds to achieve their investment goals. Pine Grove has a long and accomplished track record of outperformance and is an excellent addition to the FRM business.” Michelle McCloskey, New York-based Senior Managing Director of FRM, said, “We look forward to working closely with our new colleagues with the aim to deliver positive risk-adjusted performance for our clients. The opportunity to expand FRM’s footprint in the US is extremely exciting.”

Matthew Stadtmauer, President of Pine Grove, stated, “Over the course of 20 years Pine Grove has built a well-received client-focused business model over multiple market cycles. We are now at the point in our evolution where the additional infrastructure, resources and support available at FRM will provide significant benefits to existing and future clients. We are delighted to be taking this highly progressive step for our business.”

Tom Williams, Pine Grove’s Chief Investment Officer, said “We are particularly excited about becoming part of FRM, which will provide us with world-class infrastructure, technology and resources, while allowing Pine Grove to maintain our entrepreneurial investment approach. This will enhance our business and add significant value for clients as we strive to create the optimal environment for our investment professionals to deliver performance.”

How Will the Potential Move Away From Zero Interest Rates Influence Markets?

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¿Cómo afectará a los distintos mercados una potencial subida de tipos? — John Stopford, Co-Head of Multi-Asset at Investec Asset Management. How Will the Potential Move Away From Zero Interest Rates Influence Markets?

How will the potential move away from zero interest rates influence markets? John Stopford, Co-Head of Multi-Asset at Investec Asset Management, gives his view on the implications for high yield equities, income investors, emerging markets and more.

Click on the video to watch the entire interview.

Global Wealth 2014: Riding a Wave of Growth

| For Alicia Miguel | 0 Comentarios

Global private financial wealth grew by 14.6 percent in 2013 to reach a total of $152.0 trillion, according to The Boston Consulting Group. (See Exhibit 1.) The rise was stronger than in 2012, when global wealth grew by 8.7 percent. The key drivers, for the second consecutive year, were the performance of equity markets and the creation of new wealth in RDEs.

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The growth of private wealth accelerated across most regions in 2013, although it again varied widely by market. As in 2012, the Asia-Pacific region (excluding Japan) represented the fastest-growing region worldwide, continuing the trend of high growth in the “new world.” But substantial double-digit increases in private wealth were also witnessed in the traditional, mature economies of the “old world,” particularly in North America. Double-digit growth was also seen in Eastern Europe, the Middle East and Africa (MEA), and Latin America. Western Europe and Japan lagged behind with growth rates in the middle single digits.

As in previous years, North America (at $50.3 trillion) and Western Europe ($37.9 trillion) remained the wealthiest regions in the world, followed closely by Asia-Pacific (excluding Japan) at $37.0 trillion. Asia-Pacific, which in 2008 had 50 percent less private wealth than North America, has since closed that gap by half. Globally, the amount of wealth held privately rose by $19.3 trillion in 2013, nearly twice the increase of $10.7 trillion seen in 2012.

In nearly all countries, the growth of private wealth was driven by the strong rebound in equity markets that began in the second half of 2012. All major stock indexes rose in 2013, notably the S&P 500 (17.9 percent), the Nikkei 225 (56.7 percent), and the Euro Stoxx 50 (14.7 percent). This performance was spurred by relative economic stability in Europe and the U.S. and signs of recovery in some European countries, such as Ireland, Spain, and Portugal. A further factor, despite the tapering of quantitative easing in the U.S., was generally supportive monetary policy by central banks. In an exception, the MSCI Emerging Markets Index fell by 5 percent.

Globally, the growth of private wealth was driven primarily by returns on existing assets. The amount of wealth held in equities grew by 28.0 percent, with increases in bonds (4.1 percent) and cash and deposits (8.8 percent) lagging behind considerably. As a result, asset allocation shifted significantly toward a higher share of equities. Currency developments were more relevant to private wealth growth in 2013 than in 2012. Driven by the slowdown in quantitative easing, the U.S. dollar gained value against many currencies, particularly those in emerging markets, as well as against the Japanese yen.

As in previous years, strong growth in gross domestic product (GDP) in RDEs was an important driver of wealth. The BRIC countries, overall, achieved average nominal GDP growth of nearly 10 percent in 2013.

Looking ahead, global private wealth is projected to post a compound annual growth rate (CAGR) of 5.4 percent over the next five years to reach an estimated $198.2 trillion by the end of 2018. The Asia-Pacific region and its new wealth will account for about half of the total growth. Continued strong GDP growth and high savings rates in RDEs will be key drivers of the rise in global wealth.

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Assuming constant consumption and savings rates, North America will fall to a position as the second-largest wealth market in 2018 (a projected $59.1 trillion), being overtaken by Asia-Pacific (excluding Japan) with a projected $61.0 trillion. Western Europe should follow with a projected $44.6 trillion.

Millionaires

As the debate over the global polarization of wealth rages on, one thing is certain: more people are becoming wealthy. The total number of millionaire households (in U.S. dollar terms) reached 16.3 million in 2013, up strongly from 13.7 million in 2012 and representing 1.1 percent of all households globally. The U.S. had the highest number of millionaire households (7.1 million), as well as the highest number of new millionaires (1.1 million). Robust wealth creation in China was reflected by its rise in millionaire households from 1.5 million in 2012 to 2.4 million in 2013, surpassing Japan. Indeed, the number of millionaire households in Japan fell from 1.5 million to 1.2 million, driven by the 15 percent fall in the yen against the dollar.

The highest density of millionaire households was in Qatar (175 out of every 1,000 households), followed by Switzerland (127) and Singapore (100). The U.S. had the largest number of billionaires, but the highest density of billionaire households was in Hong Kong (15.3 per million), followed by Switzerland (8.5 per million).

Wealth held by all segments above $1 million is projected to grow by at least 7.7 percent per year through 2018, compared with an average of 3.7 percent per year in segments below $1 million. Ultra-high-net-worth (UHNW) households, those with $100 million or more, held $8.4 trillion in wealth in 2013 (5.5 percent of the global total), an increase of 19.7 percent over 2012. At an expected CAGR of 9.1 percent over the next five years, UHNW households are projected to hold $13.0 trillion in wealth (6.5 percent of the total) by the end of 2018.

Wealth managers must develop winning client-acquisition strategies and differentiated, segment-specific value propositions in order to succeed with HNW and UHNW clients and meet their ever-increasing needs.

Regional Variation

Strong equity markets helped countries in the old world, which have large existing asset bases, to match the rapid growth in assets in the new world, which relies more on new wealth creation spurred by GDP growth and high savings rates. For example, private wealth grew by double digits in the U.S. and Australia, while some emerging markets, such as Brazil, showed substantially weaker growth. China will continue to consolidate its position as the second-wealthiest nation, after the U.S.

In North America, private wealth in North America rose by 15.6 percent in 2013 to $50.3 trillion, driven by the strong growth of wealth held in equities and moderate nominal GDP growth of 3.5 percent. Wealth grew by 16.3 percent in the U.S., while growth in Canada was considerably slower at 8.4 percent owing to weaker stock-market returns and a lower share of directly held equities.

In Western Europe, private wealth in Western Europe rose by 5.2 percent to $37.9 trillion in 2013, the subpar performance partly reflecting low GDP growth. The amount of wealth held in equities rose by 17.1 percent, compared with 2.3 percent for cash and deposits and a decline of 3.1 percent in bonds.

In Asia-Pacific (excluding Japan), private wealth in Asia-Pacific (excluding Japan) rose by 30.5 percent to $37.0 trillion in 2013. Strong nominal GDP growth in both China (9.6 percent) and India (14.2 percent), as well as high savings rates in those countries—16.8 percent and 19.2 percent of GDP, respectively—were the principal drivers. The amount of wealth held in equities gained 48.0 percent, compared with 30.4 percent for bonds and 21.3 percent for cash and deposits.

In Latin America, at constant exchange rates, private wealth in Latin America continued to achieve double-digit growth in 2013, rising by 11.1 percent to $3.9 trillion. However, taking into account the currency devaluations in many Latin American countries—such as Brazil (down 13 percent), Argentina (down 37 percent), and Chile (down 9 percent)—private wealth in the region declined in 2013. Below-average growth was observed in the larger countries in the region. Private wealth rose by 10.7 percent in Mexico and 5.6 percent in Brazil (where it was up 14.1 percent in 2012), driven by a weakening of local bond and stock markets. Regionwide, riding developments in other regions, the amount of private wealth held in equities rose strongly by 19.6 percent, compared with 9.4 percent for bonds and 10.4 percent for cash and deposits. There were significant differences between the changes in onshore wealth (up 7.1 percent) and offshore wealth (up 23.5 percent)—attributable mainly to net inflows from countries such as Argentina and Venezuela and attractive returns from offshore investments. With a projected CAGR of 8.8 percent, private wealth in Latin America will reach an estimated $5.9 trillion by the end of 2018.

Private Sector Demand for Bank Credit in the Emerging Markets to Grow 45% by 2018

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Emerging markets have been the principal driver of global growth in the last five years and are expected to continue growing at twice the rate of developed markets. As a result, banks in emerging markets expect improved financial performance, despite facing challenges of rising costs, intensifying competition and tougher regulatory burdens, finds a new EY report, Banking in emerging markets: Investing for success.

The report is based on a survey of more than 50 leading financial services institutions and over 9,000 retail banking customers in emerging markets. The report identifies three challenges for banks looking to emerging markets as a growth opportunity:

Tougher regulation: Regulators in the emerging markets are moving to catch up with, or in some cases get ahead of, regulators in developed markets. Eighty-two percent of survey respondents in established markets, 81% in transitional markets and 66% in frontier markets expect the volume of regulation their banks face to increase in the next 12 months.
Increasing costs: The average operating expense for 50 leading emerging market banks has risen 81% in last four years from US$3.6b in 2009 to US$6.5b in 2013, driven by increased funding, labor and investment costs.
Intensifying competition: New entrants to the market, including foreign banks and non-banks, are intensifying levels of competition. Seventy-one percent of customers in the markets we surveyed now have relationships with multiple banking providers. And 79% of this year’s respondents said they were experiencing competition for deposits as an industry challenge, compared to 65% last year.

Jan Bellens, EY’s Global Banking & Capital Markets Emerging Markets Leader, says:“Success in these emerging markets is not straightforward, but there is great potential for those banks that get it right. In order to be successful in the long-term, banks must focus on designing the right business model and developing strong execution capabilities – learning and adapting from what banks have done well and not-so-well in both developed and other emerging countries.”

To overcome the challenges successfully, banks must think beyond immediate fixes and plan to invest in the following three areas:

Investing in technology: EY estimates that bank credit to the private sector in the 11 markets studied will grow from around US$3.5t in 2013 to US$5.1t in 2018, triggering a need for significant investment in technology across emerging markets. Banks must invest in IT to provide new, low-cost ways to reach customers in markets with limited infrastructure, better assess credit risks, build enduring customer relationships and improve operations.
Investing in people: Despite the growing cost pressure, the war on (capable) talent in the emerging markets continues, with 44% of bankers expecting headcount to grow, especially in business lines that are experiencing especially high-growth or involve more intensive levels of customer service, such as premium and private banking. With banks needing to invest in both the front and the back office, employee-led innovation and efficiency programs are key to delivering new services profitably.
Building partnerships: Banks can plug skills and capacity gaps through collaboration with companies in other industries such as telecoms and technology, as well as other financial institutions. This will be essential for banks looking to expand rapidly into new markets, products and services.

The report focuses on 11 rapid growth markets defined as being at either a frontier, established or transitional stage of maturity. The report defines the three stages of maturity as:

Frontier: Per capita GDP below US$2,000, the point at which deposit and savings products appear. Nascent capital markets with depth under 50% of GDP. (Kenya, Nigeria, Vietnam)
Transitional: These markets lie between the other two groups. At least 30% of the population typically has bank accounts and the capital markets are further developed. (Colombia, Egypt, Indonesia)
Established: These markets have exceeded US$8,000 per capita GDP, the point at which credit products become established. Capital market depth of over 125% of GDP. (Chile, Malaysia, Mexico, Turkey, South Africa)

Each market presents its own unique challenges, but there are specific areas that international, regional and domestic banks can address now through strategic investments. According to Steven Lewis, Lead Global Banking Analyst at EY: “Domestic banks in these markets are already starting to strengthen risk management and improve capital and business efficiency, which will underpin profitable growth. However, if they want to keep pace with the growth of their customers, as businesses expand overseas and personal wealth in these markets increases, they will need to find ways to overcome skill and capability gaps or risk losing these customers to larger global players.”

Scout Investments Launches UCITS Umbrella to Expand Global Distribution

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Scout Investments recently launched a UCITS fund umbrella structure to further expand distribution of its strategies to non-U.S. investors.

The UCITS Fund will mirror Scout’s Unconstrained Bond Strategy and is currently registered in Luxembourg and Singapore, with plans to expand distribution into additional countries.

The Strategy is managed by lead portfolio manager Mark Egan and a seasoned team of fixed income investment professionals, including Tom Fink, Todd Thompson and Steve Vincent. The team has managed unconstrained fixed income accounts for more than 16 years and was among the first in the industry to do so.

“The cross-border distribution of Scout’s Unconstrained Bond Strategy allows us to offer non-U.S. investors a fixed income portfolio diversifier with a proven track record,” said Andy Iseman, chief executive officer of Scout Investments. “We plan to offer additional funds via the UCITS fund umbrella structure to continue to expand our global footprint.”

The objective of the strategy is to maximize total return consistent with the preservation of capital. Scout’s Unconstrained Bond Strategy seeks to maximize total return by systematically identifying and evaluating relative value opportunities throughout all sectors of the fixed income market.

The team may use derivative instruments, such as futures, options and credit default swaps, to manage risk and gain exposure. Given its objective, the strategy is not managed against a benchmark.

A UCITS (Undertakings for Collective Investment in Transferable Securities) is an investment vehicle that enables fund managers to distribute their products to non-U.S. investors.

Scout Investments, a global asset manager headquartered in Kansas City, Mo., manages more than $32 billion in equity and fixed income investment strategies for institutions and individual investors. Scout is the investment subsidiary of UMB Financial Corporation.

The Midas Touch: Wealth Preservation and the World’s High-Net-Worth Investors

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The priorities for a high-net-worth individual (HNWI) are: protecting their wealth in order to afford a comparable lifestyle throughout their retirement, actively growing their assets to support the needs of their families, and leaving an adequate estate to their loved ones.

In this issue of The Cerulli Edge-Global Edition, they focus on the high-net-worth market, including the main drivers of growth in demand for funds in the Gulf Co-operation Council (GCC) countries, the most effective points of entry to tap into Latin America’s wealthy, and an examination of the wealth erosion that takes place in American high-net-worth families.

Regarding to Latam, the study concludes that Latin America’s private wealth sector presents a golden opportunity for global asset managers who want to tap into the region. Economic growth and unprecedented wealth accumulation has prompted an increasing number of HNWIs to examine how they are able to preserve and enhance their assets.

At the last count, there were 1,587 billionaires in the world with a total net worth of US$6.5 trillion (€4.8 trillion). John D. Rockefeller is widely acknowledged to have been the first, achieving that status in 1916. The United States currently tops the leaderboard with 492 billionaires, but it has taken almost a century to get to this point. China, which had no dollar billionaires as recently as 2002, already has 152, and is second on the list, and Russia, which only freed itself from the shackles of communism in 1991, is third with 111.

That wealth is also spreading, with new billionaires in Algeria, Lithuania, Tanzania, and Uganda. London boats the greatest number of billionaires of any city with 72, (although only one-third were actually born British), followed by Moscow with 48, and New York with 43.

Making it onto this elite list is, however, no guarantee of future prosperity. Eike Batista is a case in point. In 2012, the Brazilian was the world’s seventh richest man with an estimated worth of US$30 billion. But in less than two years, a series of poor investment decisions has seen that pile almost disappear-and he now has to make do on less than US$300 million.

“The wealthy have something in common, and it isn’t just money. Worldwide, 95% of wealth creators and 91% of wealth inheritors are married. So the best providers don’t service high-net-worth individuals, they service HNW families.” says Barbara Wall, Europe research editor at Cerulli Associates. “To service these families, Cerulli has identified six key factors that providers should pay careful attention to.”

“Wealth preservation might not be the most pressing problem facing this elite,” notes Cerulli senior analyst Angelos Gousios. “However, they would do well to heed the advice of an ancient Chinese proverb-‘Wealth does not pass three generations’- because it is just as relevant today as it was then.”

Matthews Asia Demystifies China Through “Sinology”, its New Series of Reports

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Matthews Asia published last week its inaugural issue of Sinology, a publication designed to provide investors with a framework for understanding the Chinese economy and its impact on the global economy. The focus will be on longer-term trends, to help put in context the daily flood of China news. It begins with the first in a series of ‘demystifying China’ reports, to address some of the major misconceptions about the structure of Chinese economy.

According to Andy Rothman, author of the publication, the most fundamental misunderstanding about the Chinese economy is that it is dominated by state-controlled companies. The truth is that most Chinese work for small, private firms.

Private firms account for 82% of urban employment, as well as about 70% of investment and industrial sales.

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The Communist Party still controls the financial system and many capital-intensive sectors, but most economic growth comes from entrepreneurial, small private companies, just like in the U.S. and Europe.

Misunderstanding these trends leads to understating the important role of Chinese entrepreneurs, who are the most dynamic part of the economy and drive its growth.

The Communist Party has shrunk significantly the number of SOEs and reduced the number of sectors where they operate, while scaling up the size of the remaining state firms and limiting competition in those sectors from private and foreign-owned companies. While the Party still plays an outsized role, especially through its control of the financial system, it has turned over most of the economy to Chinese entrepreneurs.

You may access the full report through this link

Schroders Portfolio Solutions Expands in North America

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Schroders announced the appointment of Seth Finkelstein to the newly created role of US Product Manager, Portfolio Solutions within its Multi-Asset and Portfolio Solutions business (MAPS). Seth, who joins today, will be based in Schroders’ New York office and will report to Adam Farstrup, US Product Manager, Multi-Asset.

Seth has spent over 7 years at ING Investment Management where he co-founded the Multi-Asset Strategies & Solutions Group (MASS). He held the title of Senior Vice President & Client Portfolio Manager. Prior experience includes senior positions at Seneca Capital Management, Cohen & Steers and J.P. Morgan Investment Management.

Nico Marais, Head of Multi-Asset Investments and Portfolio Solutions: “In line with our strategy to build out our Multi-Asset and Portfolio Solutions capabilities in North America, we are pleased that Seth has joined us to take up this Portfolio Solutions role. Seth has strong skills in both multi-asset strategy and solution design, which is very exciting for us as we take another step in building our business in North America.”

GAM Acquires Specialist US Mortgage-Backed Securities Business Singleterry Mansley

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The principals of Singleterry Mansley Asset Management – Gary Singleterry and Tom Mansley – have entered into an agreement under which they and their investment team will join GAM. Singleterry Mansley Asset Management was founded in 2002 and specialises in the evaluation and selection of complex mortgage and asset-backed securities based on analysis of macroeconomics, yield curves and underlying collateral structures.  

The acquisition, structured as an asset purchase, is expected to close in June 2014. Subject to client consent, all of the company’s assets under management (USD 397 million as at 30 April 2014) and its client relationships will be transferred to GAM.  

Singleterry Mansley has been managing mandates for institutions for 12 years. The team has built a strong track record of absolute and relative outperformance through a number of market, interest rate and credit cycles, including the crisis in the US housing and financial markets in 2007/2008 where they outperformed through anticipating movements in yield curve and credit risk, and then capitalised on opportunities after the crisis. Their flagship managed account – which uses no leverage – generated net annualised returns of 13.7% from inception in October 2002 to 30 April 2014, with positive returns in every calendar year.  

At a size of around USD 7 trillion, the US mortgage-backed securities market remains one of the largest, most liquid and diverse sectors in global fixed income. The market’s complexity and depth plays to the strengths of experienced active managers who are skilled in understanding, controlling and profiting from a broad spectrum of risks.  Singleterry Mansley invests in collateralised mortgage obligations (CMOs) guaranteed by government agencies, as well as in non-agency debt. Asset allocation and portfolio construction is driven by an analysis of interest rate, credit and prepayment risk and focuses on strong yield generation, liquidity and downside protection during sell-offs – an approach, which helped them to avoid exposures to sub-prime loans during the crisis.  

For GAM Holding AG, this move represents an extension of its leading alternative and specialist fixed income capabilities. It will add a sought-after and distinct new specialist skillset to the Group’s USD 17 billion unconstrained/absolute return bond strategy and bring the total number of investment professionals supporting this strategy to 21.  Singleterry Mansley’s offshore fund, launched in 2009, will be distributed under the GAM brand. In addition, in the coming quarter the Group plans to launch a new dedicated GAM- branded UCITS fund based on the same unlevered strategy the team has been managing since 2002. Gary Singleterry and Tom Mansley and their team will be based in New York, where GAM has had an office since 1989.

David M. Solo, Group CEO of GAM Holding AG, said: “Gary Singleterry and Tom Mansley are experienced and successful investors – their ability to navigate the severe market stress in 2007/2008 and produce strong positive returns speaks for itself. In particular, they share our Group’s commitment to a disciplined investment process based on deep analysis, combined with unconventional thinking. I look forward to having them on board and am convinced their skillset will be a tremendous addition to our current offering, allowing us to grow our asset base in line with our strategy.”

Gary Singleterry said: “We are very excited about joining GAM: Its global distribution network and its operational and compliance infrastructure will allow us to expand our reach into new markets and client segments. In particular, it will be great for us to work closely with GAM’s outstanding fixed income team and contribute to the future development and continued success of their unconstrained global bond strategy.”

Tom Mansley said: “The US market for mortgage-backed securities has been in a slow recovery mode over the past six years. Housing prices have improved, but remain affordable and mortgage underwriting standards became much stricter. The dominance of government- guaranteed issuance allows us to invest in a diverse universe of structured securities, and while private residential mortgage-backed securities issuance remains subdued, the secondary market for non-agency debt is highly attractive. Overall, this asset class offers interesting return opportunities and we look forward to making them accessible to a new and broader set of investors around the world.”

Most Advisors Do Not Use Social Media, But Those Who Do Report a Positive Impact on Business

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While most advisors are enjoying greater success than they did a few years ago, many are challenged with how to best communicate with their clients, according to new research released from Pershing LLC (Pershing), a BNY Mellon company. The Second Annual Study of Advisory Success: A New Age of Client Communications and Client Expectations explores the value of key client touchpoints and identifies opportunities for financial advisors to strengthen their connections and be more effective.

Study of Advisory Success is a longitudinal study that defines what success means for advisors in today’s environment and highlights the most salient issues that advisors face. Based on this year’s research, advisors who adapt to client communications preferences and expectations are more successful than those who do not.

“Lessons learned from the financial crisis, combined with the popularity of smartphones and other devices, have raised client expectations,” says Kim Dellarocca, managing director at Pershing. “With the proliferation of different touchpoints and a greater apprehension of financial risk, clients expect more frequent, tailored communications in real time, and many advisors have not yet developed a consistent communications strategy. It is essential for advisors to understand how, where and when current and potential clients prefer to communicate.”

Twenty years ago, advisors connected with clients through three primary channels: phone, mail and in-person meetings. Today, these channels have grown to include email and social media, which are ingrained in their clients’ lives, raising the bar for effective communications between advisors and their clients.

The study identifies three key areas in which advisors should focus their communication efforts and actionable steps they can take to improve in these areas:

Personal brand: Advisors who focus on their personal brands seem to enjoy greater success. More than half (53 percent) of advisors strongly agree that their personal brand is more important than their firm’s brand, but they are not always communicating their value proposition to clients. According to the study, one out of three advisors is missing a mission statement on their personal website, and a quarter of advisors do not have a mission statement on their team websites.

Advisors should see themselves the way their clients do, particularly online. Brands are most impactful in helping to attract and engage the right customers, and advisors should take the time to see themselves the way their clients and prospects do by taking the time to discover their own online presence through searches and then refining that presence to be more effective.

Social media: The study shows that advisors have mixed feelings about social media. Advisors can use it to engage many current and potential clients, and to share content quickly and easily. Two in five advisors do not use social media for business purposes, but among those who have used it for business, 73 percent reported positive experiences and an impact on their business. More than half (52 percent) of advisors feel that they have not invested enough time in social media, including 11 percent who say they do not spend enough time listening to their clients on those platforms. An advisor’s lack of presence on the web and social networks might deter younger prospects from becoming potential clients.

Advisors should capitalize on social media and become savvy content curators. While many advisors cite a lack of time as the reason for not using social media, there are a number of platforms that can serve as an efficient vehicle for listening, distribution and engagement. Advisors should have the ability to discern which information has value and is worth sharing. It is important that advisors do not overextend themselves. They need to make sure they are able to reasonably maintain any social properties they create. Advisors should value quality over quantity in this case.

Milestones: Relationships require regular contact and attention. Major lifecycle events such as retirement or divorce call for heightened personal attention, yet 20 percent of advisors do not reach out to clients in such circumstances, jeopardizing the client relationship.

Advisors should reach out about the good news, too. Clients are interested in hearing from their advisors regarding positive milestones, such as a birthday, new job or the birth of a child. Communicating with clients under a range of circumstances will make outreach in turbulent times less reactionary and forced.

“With client communication channels and protocols continuing to evolve, what advisors say and how quickly they respond counts more than ever,” says Dellarocca. “If they are not sure how their clients prefer to communicate, they should just ask.”

To obtain a copy of Pershing‘s Second Annual Study of Advisor Success: A New Age of Client Communications and Client Expectations, please visit pershing.com/advisorsuccess.