Today’s article in Ignites – Strong Websites Drive Sales: Study – highlights a recent survey of 536 financial advisors by kasina; these advisors spanned all channels. The results indicate that the quality of an investment manager’s website affects product decisions by advisors – particularly among higher-end advisors. If I were an investment manager, I would take these results to heart.

The survey, entitled “What Advisors Do Online 2010” had a number of interesting conclusions:

1- Advisors in the top 10% of assets spent the most time online each week; in particular, the majority of these advisors visited the sites for news and commentary.

2- For all advisors, the main information sought was pricing, performance and product-specific information, followed by news and commentary.

3- 68% of respondents said that they shared this information with clients (investors).

4- 77.5% of these advisors use social media in some way in their businesses.

So lesson number one from this article for investment managers is that advisors do find value in their websites. But the article goes further to point out that it is important that all of the components of a manager’s marketing efforts work together to be most effective. For example, wholesalers should encourage advisors to look at the website for information rather than view the website as internal competition that might make the advisor more reluctant to spend time with him or her.

Finally, the article mentions the important of the design and ease of use of the website – because reality says that if an advisor goes to a manager’s website and it is hard to navigate or it takes a long time to get the information that they want, they will 1) go to a competitors website; and 2) they will never come back! One good rule of thumb that is pointed out is the two click rule – it should never take more than two clicks to get information of interest.

To summarize, this article has some interesting implications for investment managers. Advisors are willing to use websites for information, integrating marketing efforts are effective and not to be overlooked is the functionality of the website – ease of use is key!

There was an interesting article in the WSJ recently – Hey, Money Managers, Stop Putting the Squeeze on Investors – focusing on how while the stock market overall has done poorly over the past decade, the net margins of the 10 major publicly traded fund managment companies is still running at an astonishing 25.5%.

The author suggests that unless some changes are made, many investors may abandon the markets like they did in the 1930s and 1970s. He suggests that top money managers consider 1) cutting fees (only 175 out of 6,732 mutual funds have cut their fees so far in 2010 and only by an average of 0.07%; 2) help slash tax bills by investing more tax efficiently; 3) close when they get too big; 4) leave the herd mentally behind; and 5) be more upfront about not only how they performed, but how investors would have done had they done nothing – in other words – did the money manager really add value?

There are some important points here for investors and advisors. Fees should always be a consideration when investing and it is fair to question whether a particular manager, fund or fund family has reduced their fees. While there may be a legitimate reason why fees are where they are, it is incumbent upon the investor and advisor to determine those reasons. Part of the intial investment decision should take taxes into account – any advisor that has not done this is not doing clients any favors. Investors who invest on their own need to be aware of taxes – or perhaps they should consider getting some advice.

As managers or funds get larger, especially if they are investing in anything other than large-cap stocks, they should consider closing. Many managers and funds have closed in the past. In conducting due diligence, the question of when and if the manager or fund will close is definitely important. While the answer to one of these questions might not change your investment decision, taken as a whole, these questions, if answered in a way that does not add comfort, should make you think twice before making an investment.

One value of having an advisor or firm that conducts due diligence is to find a manager or fund that does not follow the herd, especially if it impacts their turnover as discussed in this article. Finally, managers and funds and their performance should be evaluated in multiple ways and no one should rely only on the manager or fund to tell you how they did.

The article raises valid points from a number of perspectives. Investment managers and fund companies should evaluate their policies in all of these areas and provide answers – not only when asked, but proactively. Advisors should outline their criteria for making investments to their clients, and all of these points are important ones to include. And investors should either develop their own due diligence methodologies to address these issues, or seriously consider working with an expert who can!

I almost entitled this – What Goes Up Must Come Down – in the sense that most market experts have been expecting a correction (as part of a normal bull market). But this doesn’t feel like a correction – this feels like those days back in the Fall of 2008 and the beginning of 2009 when your stomach dropped on a daily basis and +300 point up or down days were not uncommon.

It started this time with Greece …. and the other PIIGS (Portugal, Ireland and Italy) and their debt problems … then add on Goldman Sachs, European indecision on how to handle the debt problems, a falling Euro and the impending passage of the most comprehensive financial reform bill in decades. Oh, sorry – I forgot to mention weaker than expected economic numbers over the past week and that 1000 drop in the dow that still can’t be explained.

Is it any wonder that market participants are nervous? Trust me – talk of a double dip recession is going to come storming back.

I don’t know if in a month from now things will be better or worse – I wish I did. I am not a market forecaster and I gave up my economic research duties a long time ago.

But what I do know is that clients are nervous – and rightfully so. 2009 was a year of recovery in the markets, but even so many investors are not back to where they were pre-Lehman. Very few can be comfortable now thinking that the roller coaster may have started on a large down hill run again. And it won’t be long before the questions about the validity of asset allocation are raised again.

Now is the time for over-communication. Hopefully, those of you that are client-facing have already been proactively calling your clients and keeping them calm. Use whatever information you can from the information that you read to keep them focused on their long-term goals. Make sure that their risk tolerance profiles are up to date. I don’t think you can over-communicate!

This to shall pass. The question is whether it will happen soon, with less pain, or longer-term with more pain. Don’t let that issue get in the way of helping your clients now. They will appreciate it and you regardless of which scenario plays out.