The Credibility of Canada’s Fund Companies

Why is this important? Nothing is more highly correlated to an advisor’s willingness to support a fund company than credibility; not even performance. If a fund company is not credible, it will not garner support from advisors.  If an advisor is not credible, he will not build or retain his client base.  Credibility is key!

Credibility is an essential element in any brand; it is all about being truthful and dependable.  That’s why Credo measures the credibility of many of the main competitors in the Canadian investment landscape.  In the accompanying table above you will see the Credibility scores for a host of key competitors.  To the left-hand side, you’ll see the companies that earned the best scores in the industry.  To the right hand side, you’ll see the worst scores we measured last year.


Advisors’ Perceptions: The Best and Worst Scored Suppliers[1] 

If you’re an advisor and you’re contemplating your product shelf, trying to decide which suppliers to keep on shelf and which simply no longer bring the value to the table for you, one of your go-to sources is typically your peers — other advisors in your office and within your network of colleagues.  That’s where Credo goes to generate these measurements!  We ask more than 1,000 advisors to rate the suppliers they work with against a set of statements about trustworthiness, truthfulness and dependability.[2]  On that basis, we’re able to identify the companies that advisors see as the best and the “not-so-best” in the industry.  We will point out that we ask only advisors who have a current relationship with a company to rate that company; we’re not asking advisors who have already kicked Sentry to the curb what they think of Sentry.  So, our company ratings are a valid and comparable analysis of advisors perceptions of their suppliers.

In the abbreviated listing of companies that accompanies this article, we can see that a number of companies are clearly at the leading edge of the industry.  Among fund companies, EdgePoint is seen as a fantastic player in the industry.  With only a tiny suite of funds, this is very different from the monolithic Fidelity that is also revered by Canada’s advisors.

At the opposite end of the spectrum are shops like Sprott, Manulife, BMO Mutual Funds and Franklin Templeton.  Sprott managed to crush its brand effectively during 2016 and 2017. It had lost such a degree of credibility within the advisor community that the firm decided to collapse its “Sprott” brand name and drape itself with a new moniker Ninepoint Partners; that’s the condensed brand-management story, anyway.  This is very reminiscent of the collapsing of the Aston Hill brand and the renaming of its remains to LOGiQ the year before.

To be sure, there is plenty of wheat among the chaff at some of these supplier companies.  Manulife, for instance, offers select fixed income instruments that advisors see as comparable to anything PIMCO’s offering. Yet, because of the complexity of the organization, its products and its website and information retrieval processes, advisors are often frustrated with their experiences with Manu.  Credo sees its green brand block (think of the company’s logo) that says trustworthy as aspirational more than factual… at least in advisors’ minds.

It’s not all and only about product performance and PMs.  It’s more holistically about the experiences that these companies, as suppliers, are willing to deliver.  It’s about their creativity in helping advisors understand where they and their clients are… and in moving to a better place. We’ll offer the caution that companies have to be very careful with respect to the experiences they are delivering as they attempt to build credibility, of course.  Though Sentry appears on the left-hand side of this chart, Under the weight of the OSC’s probe into the company’s conduct and the more recent acquisition (and gutting) of the brand by CI… Credo fully expects Sentry to fall into the right-hand column in this year’s measurement.

Is this ranking the be-all and end-all? Certainly not. It’s only one part of a much larger and more comprehensive analysis.  But is does provide solid perspective on which companies are justifiably being kept on advisors’ product shelves and which ones are being cast aside.

What you should do?  Audit your activities and the touchpoints you have with your customers and prospects.  Consider them critically and decide, objectively, whether or not each touchpoint is seen as truthful and dependable among customers and prospects. Environics’ Advisor Perception Study is a good tool to help with this.  Of course, Credo helps clients measure and benchmark

[1] The highest measurable level of credibility on our scale is a 5.  An impossibly poor score is 1.  As a result, all scores fall on a spectrum between 1 and 5.

[2] Truth be told, we ask the advisors to rate their suppliers against a much larger group of important dimensions