This week, we are recognizing the winners of the 2021 Financial Advisor IQ Service Awards, and diving into the areas where advisors say product partners can make the most impact. Check out www.financialadvisoriq.com/serviceawards for more information and the full list of winners.

Financial advisors pay attention to how well asset managers run their product menus, which they see as an element of client service.

Half of the 903 advisors we surveyed cite product lineup management as “very important” or “crucial” to their opinion of an asset management company; only 6% consider it unimportant. Menu management can involve an array of activities, including planning and launching new products, striking the right balance between focused and diverse offerings, and exhibiting discipline in changing or rationalizing products.

Advisors make it clear that fund firms can impress them by demonstrating that they consider advisors’ needs through the products they offer and how they communicate changes to those product offerings.

Financial advisors say they may be skeptical about a new fund or ETF that veers dramatically from an asset manager’s previous products. And, just like seeing sushi on the menu at a Mexican restaurant, a seemingly incongruous addition to a fund family lineup can cause advisors to start questioning an asset manager’s judgment.

But providing too narrow a choice of products can also pose risk — especially now, as financial advisors expect manufacturers to offer multiple types of strategies. Notably, this year’s award winners for product lineup management tend to offer a range of products across asset classes, and often across active and passive strategies.

Beyond the products themselves, advisors value communication. Advisors and product selectors for platforms consistently say that being surprised by a change to a product or a product line-up can be a big strike against the manager. For instance, 34% of advisors say a common problem when asset managers merge or liquidate products is that the provider fails to give enough advance warning.

Whether adding or subtracting products, asset managers need to explain the reasons behind the changes or risk losing advisors’ faith. As the sales head at an award-winning asset manager told us: “We’re built on partnerships with advisors; we build trust by explaining our strategy and discipline and how we can add value.”

As the 2021 awards indicate, advisors respond to firms that embrace product lineups as means of building credibility.