Maybe it’s the name. American Funds takes the top spot as the most trusted investment manager among 401(k) advisors.
The honor comes as “trustworthiness” outranks more concrete factors such as consistency of investment performance and the experience of the investment team, and is a “must-have” ingredient for brand consideration in the 401(k) industry.
In fact, “defined contribution investment managers who fail to foster trust among 401(k) advisors have little chance of being considered for new business,” according to a new survey.
Fidelity, Vanguard, BlackRock and Franklin Templeton rounded out the list.
“The power of brand trust and its resounding impact on brand consideration cannot be underscored enough—brand trust is vital for gaining traction among DC advisors as well as DC plan participants and affluent investors,” said Sonia Sharigian, author of “Retirement Plan Advisor Trends”, a new Cogent Reports study by Market Strategies International. “This is one of the most consistent and hard-hitting trends we’ve seen across a multitude of our studies. Any asset manager that is striving for growth or seeking to maintain its standing needs to pay attention to this metric.”
The study further details the DC investment managers that embody the concept of trustworthiness. Over three in 10 DC producers consider American Funds, Fidelity, Vanguard and BlackRock “a company I trust.” In addition, these four firms continue to top the leaderboard across other key drivers of consideration.
“In an industry that appears to be plagued by lawsuits and negative media coverage, DC investment managers are facing a significant trust deficit,” added Linda York, senior vice president at Market Strategies. “As such, understanding current perceptions and monitoring the experience factors that build trust are imperative to the health of a brand’s DC business.”
Top Five Trusted DC Investment Managers
| Rank | Established DC advisors |
| 1 | American Funds |
| 2 | Fidelity Investments |
| 3 | Vanguard |
| 4 | BlackRock |
| 5 | Franklin Templeton Investments |
Source: Market Strategies International. Cogent Reports™. Retirement Plan Advisor Trends™: October 2016.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
