Independent advisors require a vastly different level of support from money managers and their field forces than their wirehouse and bank rep counterparts, according to newly published research from Financial Research Corp.

The three top-rated forms of wholesaler support that resonate most with independent advisors are information on portfolio holdings, resolving problems with client accounts and new product updates. Best way to get business from independent advisors? Respond quickly and help “efficiently” solve client problems. (65 percent of those polled in FRC’s Web-based survey of 821 independent advisory firms released last Thursday ranked that most important.)

“This is an area where advisors are not receiving the level of support they need,” says Lynette DeWitt, senior research analyst at FRC. “If they do not receive responsive service, they may move assets to a different manager—assuming performance is comparable.”

Put another way: The things an indie advisor wants—one affiliated with either an RIA or an independent broker/dealer—is different than, say, wirehouse reps. Most wirehouse reps crave more hand-holding when it comes to practice management tips, assistance with client events and referral strategies, the report says. Independents are more interested in “business maintenance support” and problem resolution for existing accounts. “While other more creative types of support may resonate with advisors in other channels, independent RIAs and IBD-affiliated advisors want asset managers and their wholesalers to first and foremost be very good at delivering straightforward, ‘bread and butter’ services,” the report says.

This isn’t surprising because their realities of their day-to-day business life are so different. For starters, IBD-affiliated advisors and investment advisor reps (the official names of those affiliated with RIAs) tend to have a longer tenure in the business, more assets under management and more clients. FRC found that the average indie respondent has been in the business for 18 years, have, on average, 280 clients and an average client size of $395,360. That compares to the reps average of 13 years in the business and $159,000 average client size, according to the SIA.

All financial advisors are in competition for wealthy clients. But the services indie reps provide their clients extend beyond what your typical wirehouse broker would provide—although that is changing, the wirehouses say. These advisors take a comprehensive financial planning and investment management approach and tend to be a lot more hands-on in managing client assets. In fact, 95 percent of indie respondents provide clients with a written financial plan and 87 percent conduct periodic reviews of the plan, the FRC study shows.

For these reasons, affluent baby boomers are drawn to independent advisors, which happens to be the same type of client fund firms are looking to attract, DeWitt says. In turn, this makes the independents very attractive to fund firms such as Fidelity and Schwab, which have been rolling out new business-support services to attract the growing businesses of RIAs.

“Fund firms that are able to meet and exceed the expectations of this advisor segment will be the best positioned to drive sales through all advisor-sold channels, assuming product performance is on track,” DeWitt forecasts.

Unlike their captive peers, independent advisors don’t have the luxury of massive resources and cash reserves that the big Wall Street banks and brokerages enjoy. So profitability is an ongoing concern for these folks. Therefore, it stands to reason that expense ratio is the most widely used selection screen among independent advisors. Nearly 70 percent of the respondents say they always consider expense ratio when selecting investment products.

With respect to product selection, more independent reps are parking their clients in ETFs and other passive investments, while shying away from expensive separately managed accounts (SMAs). The study shows that 44 percent of indie advisors are using ETFs, compared to 34 percent in 2003. Further, 72 percent of current ETF users say they plan to increase their exposure in the next 12 to 18 months. Their use of SMAs, however, declined during that time frame from 20 percent of assets in 2003 to only 13 percent of assets in 2005.

“Competitive pressures on independent advisors have increased, as has the cost of doing business, making the need for low-cost products paramount,” DeWitt says. “In a fee-based model, indie advisors are constantly seeking the highest return with the lowest cost. In this way they can maximize their own revenues while return for their clients.”