The number of independent marketing firms representing money managers has grown sharply in recent years and competition is growing, according to a new report by Eager & Associates, Louisville, Ky.
Eight firms were added to Eager's database of marketing representatives for 1995, for a total of 28 firms in the United States and abroad. Four of the new firms added for 1995 are less than 2 years old, and 43% have been in business for five years or less. However, the principals of the firms average 22 years in experience in investment management, and most worked as marketers, according to Eager's data.
The Eager report is based on information supplied by the 28 firms. The firms represent all types of money managers, mainly international/global firms, who made up 32% of the client base of the marketers surveyed. Domestic equity managers made up 25% of clients, alternative investment firms took up another 11% and all other manager types made up 11% of clients. According to the respondents' comments, the marketers are targeting the international/global and alternative investment managers.
Comments collected as part of the survey stressed an increased importance in cost-effectiveness and knowledge among the outside marketers. Several comments point out the tighter competition among managers could make them seek outside marketing help as a cost-effective solution. The marketers see "a more competitive environment, with more knowledgeable buyers on both the manager and plan sponsor side of the desk," one respondent said.