In a crowded marketplace, where advisors have a tremendous range of suppliers from which to choose, a supplier’s credibility is absolutely central to advisors’ Willingness to Support it. Credibility is based on truthfulness and dependability and only when investment managers deliver on these dimensions can they hope to maintain their place on an advisor’s product shelf. When they compromise their credibility, they are either put in the penalty box indefinitely or marginalized completely in favour of more credible competitors. To measure Canadian investment managers’ credibility, Credo garners reaction from advisors on four bellwether statements. Each of these is detailed below.
This report provides details and discuss the determinants of Credo’s Credibility construct for Dynamic Funds. Each of the eight constructs in Credo’s Brand Credibility model (a key component of our overall brand health measurement system) is created by combining the results of financial advisors rating the suppliers they have elected to work with against a number of marker statements. A detailed overview of Dynamic’s scoring on the other major constructs in the Brand Credibility model is available in the detailed advisor assessment of this company.
Overall Credibility scoring for Dynamic is presented in Exhibit 1 below. It shows that in Credo’s most recent measurement, Dynamic was in the 46th percentile relative to its competitors. It also shows that the overall trend for Dynamic is negative. Dynamic has been losing Credibility with Canadian financial advisors.
The Company’s Current Credibility
Exhibit 1. Credibility for Dynamic: percentile ranking over time
Each of the eight constructs in Credo’s Brand Credibility model is underpinned by a number of statements that speak to the construct’s theme. The questions that underpin the Credibility construct include:
- This company delivers what it promises
- You cannot believe what they say about themselves*
- My experiences make me wary about this company’s claims*
- This is an organization you can trust
(Note: Questions or statements marked with a star have had their scales reversed.)
1. Delivers what it promises
Advisors are asked by Credo to react to the statement, “this company delivers what it promises.” They make their Willingness to Support decisions based largely on their assessment of a supplier’s commitment to delivering; i.e., their dependability. This statement speaks specifically to the level of dependability advisors believe their suppliers have. When the dependability of a supplier is compromised, advisors’ willingness to work with that supplier wanes dramatically. While a supplier delivers what it promises, it can be seen as dependable. Delivery against promises is thus an essential component that underpins credibility.
Scoring against Delivers what it promises for Dynamic Funds is in the 38th percentile. The percent rank achieved this year is slightly lower than the rank achieved last year (41st). The percent rank achieved this year is also significantly lower than the average rank achieved over our extended measured period (66th). The overall trend for Dynamic is negative.
Exhibit 2. Dynamic Funds vs Delivers what it promises
2. Cannot believe what they say about themselves*
Asset managers have a small army of sales representatives called wholesalers calling on retail advisors across the country. These wholesalers are further supported by inside sales reps. Together these sales teams work with marketing departments to convey messages about their firms. So, we test messaging credibility by asking advisors if they feel they can believe what their suppliers are saying about themselves. (Note: Desirable scoring against this marker statement actually requires disagreement with the statement.)
Scoring against Cannot believe what they say about themselves* for Dynamic Funds is in the 46th percentile. The percent rank achieved this year is lower than the average rank achieved over our extended measurement period (that rank was 58th). Further, the overall trend for Dynamic is negative. The percent rank achieved this year is significantly higher, however, than the rank achieved last year (24th).
Exhibit 3. Dynamic vs Cannot believe what they say about themselves
3. Experiences make me wary about claims*
Is an advisor ever left with a nagging sense that what they have been told just does not hold water as well as it might? When this occurs, it is generally because the supplier’s tactical initiatives have failed to deliver and are thus are less than ideal. It is, after all, the experiences that a company delivers that create their brand. An incongruence between the advisor’s experiences and the messaging they have received create doubt and doubt undermines credibility. A supplier’s claims should never leave an advisor wary.
Scoring against the statement Experiences make me wary about claims* for Dynamic Funds is in the 49th percentile.The overall trend for Dynamic is clearly negative. The percent rank achieved this year is significantly higher than the rank achieved in the previous year (22nd), however. Still, the percent rank achieved this year is lower than the average rank achieved over our more extended measurement period (65th).
Exhibit 4. Dynamic Funds vs Experiences make me wary about their claims
4. This is an organization you can trust
Credo is very direct with the matter of trust. We have advisors react to the statement, “this is an organization you can trust.” A high level of trust sustains the credibility that a supplier must have with its advisor clients. When advisors lose faith in a supplier – when they feel they cannot trust their supplier – they quickly seek alternatives. Trust is fundamental to credibility which it, in turn, a key to advisors’ willingness to work with any supplier.
Scoring against the statement This is an organization you can trust for Dynamic Funds is in the 35th percentile. The percent rank achieved this year is significantly lower than the average rank achieved over our measured period (69th) and the overall trend for Dynamic is dramatically negative. The percent rank achieved this year is on par with the rank achieved last year (35th).
Exhibit 5. Dynamic vs This is an organization you can trust
Among advisors, Dynamic has fallen to a substandard position in the industry with respect to its Credibility as a supplier. On the basis of this and advisors’ assessments of the other constructs in Credo’s brand health model, Dynamic is not currently an Advisors’ Supplier of Choice.