In a crowded marketplace, where Canadian financial advisors have a tremendous range of suppliers to choose from, a supplier’s credibility is absolutely central to advisors’ willingness to support it. Credibility is based on truthfulness and dependability and only when investment managers deliver on these two dimensions, they can maintain their place on an advisor’s product shelf. When they compromise their credibility, asset management companies are either put in the penalty box indefinitely or marginalized completely in favour of more credible competitors.

To measure Canadian investment managers’ credibility, Credo garners reactions from advisors against four bellwether statements. This report, provides details and discusses the determinants of Credo’s Credibility construct for EdgePoint… just about the most credible asset manager in the business right now.

Exhibit 1. Credo’s Brand Credibility Pyramid

Each of the constructs (a.k.a. building blocks) in Credo’s Brand Credibility Pyramid is created by combining the results of financial advisors’ ratings of the many suppliers they have elected to work with against a set of marker statements. (An overview of the major constructs in the Credibility Pyramid is available in the overall advisor assessment for this company.)  This short report covers the four important statements that relate to Credibility.

Credibility for EdgePoint is presented in Exhibit 2 below. It shows that, in Credo’s most recent measurement, EdgePoint was in the 100th percentile relative to its competitors. No companies scored higher.  We can see that the trend for EdgePoint has been stable at the top of the industry for years.  On this basis, EdgePoint has earned a Credo Advisors’ Supplier of Choice status from Canada’s financial advice community.

The Credibility Factor

Exhibit 2. Credibility for EdgePoint: percentile ranking over time

Each of the constructs (or factors) in the pyramid is underpinned by statements that speak to the construct’s theme. The questions that underpin the Credibility construct include:

  1. This company Delivers what it promises
  2. You cannot believe what they say about themselves*
  3. My experiences make me wary about their claims*
  4. This is an organization you can trust

Note: Questions or statements marked with a star have had their scales reversed in our analysis. Being in the 100th percentile is optimal.

Each of these is discussed below along with EdgePoint’s scoring against each statement.

1. Delivers what it promises

Advisors are asked by Credo to react to the statement: “this company delivers what it promises.” Advisors make their willingness to support decisions based, in large part, on their assessment of a supplier’s commitment to delivering; i.e., their dependability. This statement speaks specifically to the level of dependability advisors believe their suppliers have. When the dependability of a supplier is compromised, advisors’ willingness to work with that supplier wanes dramatically. While a supplier delivers what it promises, it can be seen as dependable. This is an essential component that underpins Credibility.

Scoring against the statement “Delivers what it promises” for EdgePoint is in the 100th percentile; the top score in the industry. The percent rank achieved this year is as high as any average rank achieved over Credo’s multi-year measured period (100th). The overall trend for EdgePoint remains stable.  The percent rank achieved this year is no higher than the rank EdgePoint achieved in the previous year largely because it can’t be higher.  The top is the top.  Credo infers that EdgePoint is dependable as a supplier to advisors.

Exhibit 3. EdgePoint vs Delivers what it promises

 

2. Cannot believe what they say about themselves*

Is an advisor ever left with a nagging sense that what they have been told by a supplier just does not hold water as well as it might? When this situation occurs, it is generally because the supplier’s tactical initiatives have failed to deliver and are thus less than ideal. It is, after all, the experiences that a company delivers that create its brand. An incongruence between the advisor’s experiences and the messaging they have received create doubt… and doubt undermines credibility. A supplier’s claims should never leave an advisor questioning whether or not what has been said to them is something they can believe.

Advisors’ reactions to the statement, “You cannot believe what they say about themselves*” for EdgePoint is also in the optimal 100th percentile in the industry. The percent rank achieved this year is only slightly higher than the average rank achieved over the measured period and it is the same as the rank achieved last year (100th). The overall trend for EdgePoint remains stable… at the top of the industry.

Exhibit 4. EdgePoint vs Cannot believe what they say about themselves

 

3. Experiences make me wary about claims*

Asset managers have a small army of sales representatives called wholesalers calling on retail advisors across the country. These wholesalers are further supported by inside sales reps. Together these sales teams work with marketing departments to convey messages about their firms. So, we test message credibility by asking advisors if they feel they can believe what they are saying about themselves. (Note that desirable, optimal scoring against this marker statement actually requires disagreement with the statement.)

Scoring against this marker statement, “Experiences make me wary about claims*” for EdgePoint is also in the optimal 100th percentile. The percent rank achieved this year is slightly higher than the average rank achieved over the measured period (99th) and the percent rank achieved this year is on par with EdgePoint’s rank last year (100th). The overall trend for EdgePoint is marginally positive… though, being at the top of the industry, there really is no higher score.  EdgePoint has set the benchmark.

Exhibit 5. EdgePoint vs Experiences make me wary about their claims.

4. This is an organization you can trust

Credo is very direct with the matter of trust. We have advisors react to the statement, “this is an organization you can trust.” A high degree of trust sustains the credibility that a supplier must have with its advisor-clients. When advisors lose faith in a supplier – when they feel they cannot trust their supplier – they quickly seek alternatives. Trust is fundamental to Credibility which is, as we have identified, a key to advisors’ willingness to work with any supplier.

Scoring against the statement, “This is an organization you can trust,” for EdgePoint, is in the 92nd percentile. The percent rank achieved this year is lower than the average rank achieved over the measured period  which was 96th and it is also lower than the rank achieved in the previous year (97th). The overall trend for EdgePoint however, is quite stable and very close to the top of the industry.

Exhibit 6. EdgePoint vs This is an organization you can trust

 

Conclusion

By virtue of its optimal scoring on this dimension, EdgePoint holds the lead position in advisors minds with respect to Credibility as a supplier. This is part of the reason EdgePoint has earned its status as a Supplier of Choice among Canada’s advisors.

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Other Companies

Credo produces similar reports for almost 40 asset management companies.  Each company profile includes detailed analysis of the components of