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Are You an Expert?

by Conrad

Imagine you need a new laptop. You check out a manufacturer's Web site, but see that the site is missing important technical information, such as the type of processor and amount of RAM provided. You would probably leave the site disappointedly. Later on, you find this information on a generic shopping site such as Amazon; at this point, however, you would probably think that the manufacturer is pretty incompetent, and you'd choose another one.

With this scenario in mind, we can see that it's imperative that firms be the experts of their own products. It looks bad if a third party Web site offers more product information than does the firm itself.

However, this happens quite often in the asset management industry. Morningstar offers data points such as P/E, Alpha, and Beta that are often missing on individual firm sites. Not only does this not make a firm look good, it also affects advisor site traffic in a negative way. Advisors primarily come to a firm Web site to get product information -- why should they do so at all if Morningstar offers more information?