Merrill Lynch customers the most loyal
TheMerrill Lynch Investment Management group commands more loyalty from its customers than all other fund managers, even though it accounts for less than one per cent of the entire funds management market in Australia, according to a report by research house Assirt.
The positive findings, which show that 79 per cent of Merrill Lynch’s past or present clients plan to continue investing with the group, comes in despite the fact that Merrill Lynch has scaled back its financial planning operations in Australia.
The findings, which form part of Assirt’s annual Investor Market Trends report, to be released this week, are based on a survey of 283 investors conducted in May.
Each of the investors, who had more than $20,000 invested in managed funds or shares outside of superannuation, was asked if they would place further money with their past or present fund manager.
Merrill Lynch took out the top spot narrowly ahead of ING, where 78 per cent of investors said they would remain loyal to the group.
By comparison, Rothschild, re-named Sagitta Rothschild after being purchased by Westpac in April, was the least likely of the major funds management groups to command customer loyalty, according to Assirt. The ANZ Bank, MLC and Westpac also scored relatively poorly.
But Assirt market research manager Vanessa McMahon says investor loyalty to an organisation in not necessarily an indicator of positive inflows.
In the year to June 30, some $283.4 million flowed out of Merrill Lynch.
“Despite the high levels of investor loyalty given to some companies, inflows have fallen as they try to win back the support of the financial planning community,” she says.
According to the Assirt report, 57 per cent of investors rely on information from financial planners to make their minds up about investments, and 31 per cent say financial planners are the most important source of financial information.
Last year, Merrill Lynch made 70 of its private client financial advisers redundant after it decided to refocus its retail private client division exclusively on a smaller number of high-net-worth individuals.
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