Law enforcement uses behavioral profiling to identify terrorists, and now mutual fund companies are starting to apply the methodology to financial advisers to target sales and marketing efforts more effectively.
They are looking at which advisers — regardless of their channel — focus on investors in the accumulation phase of investing and which focus on the distribution phase, according to industry watchers.
Fund companies are studying which advisers use exchange-traded funds, which ones use separately managed accounts and which ones use alternative investments.
“They are looking at how an adviser actually does business,” said Howard Schneider, president of the consulting firm Practical Perspectives.
Some fund companies are even looking at more-personal information.
“If someone is a successful rep, guess what? They will look like a successful consumer,” said Jack Wallace, solutions leader at Acxiom Corp., a marketing services consultant.
Not all fund companies, however, are taking such a close look at the business and private lives of their adviser customers.
Many are still wedded to focusing simply on whether an adviser falls into a particular silo — such as wirehouse, independent broker-dealer or independent registered investment adviser, Mr. Schneider said.
But a growing number of fund companies are looking more closely at individual adviser practices.
T. Rowe Price Group Inc. began such an effort about two years ago, said Bill Weker, its vice president of marketing/web strategy and development in third-party distribution.
“We're trying to get under the hood of what's driving adviser behavior,” he said.
The Vanguard Group Inc. is also looking past traditional channels to get a better feel for who an adviser really is, said Melissa Nassar, its head of sales.
“It's a big deal for us,” she said.
To read the full version of this story, please see the Oct. 12 issue of InvestmentNews
