Fidelity and Mackenzie: Performance Perceptions and W2S
In a battle for Canadian fundco supremacy, Mackenzie and Fidelity are undisputed titans. Both have war wounds, but they soldier on, regardless. The analysis shown graphically below shows two key dimensions of the battle. It shows, over time:
- what advisors believe two key industry participants have delivered with respect to financial returns as well as the trajectory of those perceptions; and,
- the corresponding advisors’ willingness to support those two firms… and the trajectory of that willingness over time.
We have removed many other players from this battle scene. Companies and CI and Franklin Templeton and AGF remain very relevant. So do the ETF shops and the banks. Even EdgePoints and NinePoints and PIMCOs and Canoes have effect on the landscape… but here we have isolated two behemoths.
What do we see?
- Both Mackenzie and Fidelity are in the top, right quadrant. This indicates that they are better than the average fundco (i.e., their competitors) with respect to both of these key, measured factors.
- Mackenzie’s trajectory currently looks very favourable. It is improving in the minds of advisors with respect to perceived performance (it is rising in the chart) and advisors are increasingly telling us they are willing to support Mackenzie. The company’s star is currently on the rise among advisors.
- Fidelity’s trajectory has stalled and reversed somewhat. While perceptions of the company’s performance (and the corresponding W2S) improved markedly between 2014 and 2016, they took a significant reversal between 2016 and 2018. The rise of this star has halted.
- Fidelity’s position remains superior to Mackenzie’s position with respect to both W2S and perceptions of performance. As Credo’s ongoing analysis shows, however, relative positions are ever evolving in a competitive landscape and a company’s trajectory needs to be considered.
Which will have what effect?
- Will Mackenzie’s positive trajectory be halted by the million dollar settlement with the OSC that the company has incurred for transgressions in sales practices? Fidelity has had no such issue with the OSC and maintains among the cleanest records with regulators. In an industry that is based on trust, what will be the effect of this settlement on Mackenzie’s trajectory.
- Fidelity’s flagging performance is, in part, a cause of the 2018 abatement of advisors’ willingness to sell Fidelity’s offerings. Despite this, advisors’ perceptions still have Fidelity ahead of Mackenzie with respect to perceived performance. Will the trajectory of Mackenzie’s strong performance overcome ongoing issues with its weak, inconsistent and ill-fated marketing efforts and enable the company to surpass Fidelity?
Can a company that is now firing well on 3 of its 4 cylinders surpass a company that has been firing on all four cylinders… but that has recently developed a severe enough engine knock to have its passengers scratching their heads?
Brand trajectory matters! Trajectory is the product of the time, effort and resources a company has dedicated to develop its brand — the experiential expectations that clients have of the company. Rome was not built in a day; neither were the names Mackenzie and Fidelity.
Point in time measures are important for assessing the current strength of a brand, to be sure. But, current measures alone don’t begin to tell the story in an ever evolving landscape. Taking measurements regularly to continually assess both the position and the trajectory of the brand is essential. You certainly have to measure brand if you’re going to manage it… but you also have to watch its direction for cues to assessing overall brand health.
There’s Yet More to It!
Though we’ve isolated two brands here, the other players have to be factored back into the equation as we assess evolving matters. Further, it’s essential that we incorporate an appreciation of the evolving advice industry as an overlay because, while all companies battle for net new sales… or simply to mitigate redemptions, the very nature of the pie over which they are fighting is changing. Know your product means further right-size your product shelf, for instance. Only companies that invest in efforts to deepen support for advisors will retain advisors’ support going forward. And no companies have greater advantage in doing this than the vertically integrated players.