Vanguard brand gets high marks from institutional investors
OREANDA-NEWS. March 22, 2016. Vanguard stands at the top of investment management firms that pension plan and nonprofit institutional investors would consider as manager of a portion of their assets, according to a recent survey. Cogent Wealth Reports' US Institutional Investor Brandscape®, a survey of 405 investors conducted last fall, ranked Vanguard as the first choice for both smaller nonprofits (less than \\$250 million in assets) and larger ones (\\$250 million or more), from a list of 51 investment management firms. Large pension plans also gave Vanguard the top spot, with smaller plans placing it second. In addition, Vanguard swept the field in this latest poll when it comes to favorable impression.
The report noted that Vanguard continues to set the standard—garnering not only the strongest overall consideration score among nonprofits but also as the only firm to earn strong consideration ratings from more than one-third of nonprofit investors.
Highest overall satisfaction and loyalty
Vanguard also received the highest ranking in terms of overall client satisfaction. This reflects the importance that both pension and nonprofit institutional investors assigned to several brand attributes where Vanguard ranked very high: investment performance, organizational stability, and service and support—among other attributes (see the table below).
As for client loyalty, two results tell the story. The first is reflected in a question about how likely investors would be to recommend an asset manager they use to a peer outside their organization. Again, Vanguard topped this list, garnering the highest Net Promoter® Score of 60 (the score of the second-place firm was 53, the rest less than 50) as well as the highest percentage of clients highly likely to recommend Vanguard.
The second result reverses the question asked above. Instead of which firm they would recommend, investors were asked which firms they are likely to drop from their lineup within the next year. On this list, Vanguard was next-to-last (2% versus 1% for the last-place finisher—34% for the first-place firm).
Brand attributes an excellent match with criteria for selecting asset managers
Survey respondents were asked to rank the importance of a list of 17 criteria for selecting asset managers. These criteria were translated into 16 brand attributes. Respondents were then asked to select the manager they most associated with these attributes and with whom they were familiar.
As illustrated in the table below, Vanguard dominated here, as well—ranking first in 39 combined attributes for both large and small pension and nonprofit institutional investors.
High marks for Vanguard brand from institutional investors
| Pension plans | Nonprofit organizations | |||
|---|---|---|---|---|
| <\\$250M | \\$250M+ | <\\$250M | \\$250M+ | |
| Strong, consistent investment performance | 1 | 1 | 1 | 2 |
| High level of integrity | 1 | 1 | 1 | 1 |
| Outstanding service and support model | 1 | 1 | 1 | 1 |
| Optimal fees/Fee structure | 1 | 1 | 1 | 1 |
| Superior thought leadership | 2 | 3 | 2 | |
| Having a well-respected brand | 1 | 1 | 1 | 1 |
| Noteworthy organizational stability | 1 | 1 | 1 | 1 |
| Commitment to social responsibility | 2 | 1 | ||
| Experienced investment teams | 2 | 2 | 1 | |
| Best-in-class risk management practices | 1 | 1 | 1 | 5 |
| Distinguished investment philosophies | 1 | 3 | 1 | 2 |
| Superior research processes | 2 | 3 | 4 | |
| Exceptional relationship management | 1 | 1 | 1 | |
| Strong, effective alignment | 1 | 2 | 1 | 3 |
| Exceptional financial strength | 1 | 1 | 1 | 1 |
| Industry-leading product innovation | 2 | 3 | 3 | 3 |
Source: Cogent Wealth Reports US Institutional Investor Brandscape, January 2016.
"We're very gratified by this response from institutional investors who we believe represent the many nonprofit and defined benefit pension plan clients whom we serve," said Kevin Jestice, principal and head of Vanguard Institutional Investor Services. "Vanguard has been client-focused from the day it was founded more than four decades ago. We're owned by our funds, which are owned by our fund shareholders; because we have no other owners and no conflicting loyalties, we can keep our fees low—helping our clients keep more of their investment returns. That our service and support model, as well as our organizational stability, were also highly ranked also reflects the depth of focus on our clients."
Notes:
- All investing is subject to risk, including the possible loss of the money you invest.
- Past performance is not a guarantee of future results.
- Cogent Wealth Reports is a division of Market Strategies International. Market Strategies is a market research consultancy with deep expertise in consumer/retail, energy, financial services, health care, telecommunications, and technology. Its syndicated products, known as Cogent Reports, help clients understand the market environment, explore industry trends, and evaluate and monitor their brand and products within the competitive landscape. The survey referenced here was conducted independently by Cogent.
- Vanguard neither commissioned nor paid to be included in the Cogent survey reported on here. Cogent has conducted unrelated, custom market research for Vanguard in the past.
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