With the record inflows to the bond funds of BlackRock Inc., it’s very likely that its fourth quarter results will make it win over the hearts and investments of its financial advisers and retail clients. The earnings are expected to show that the firm’s three-year efforts to impress its clients have finally started to pay off.
Since it first took aim at mom and pop investors back in the year 2011, BlackRock has launched a branding campaign as well as a sales force reorganization. It has gotten 500 of its investment strategies on brokerage firms that it actively managed which included Raymond James, Wells Fargo Advisors and other clients. According to BlackRock, the fund family is a top seller at UBS and Morgan Stanley.
After BlackRock made an addition of $37.7 billion through the first three quarters of 2014, its retail actively manage business went up at $525.5 billion by the end of the third quarter which ended in September 30.
This is just a small portion of the $4.5 trillion in assets under the management for BlackRock but this is a key bottom-line contributor since those funds purchased by its retail clients have more fees compared to those that are bought by institutional investors. While they make up only 12% of assets, they account for 35% when it comes to fees.
For each $10,000 investment, a retail client of the firm pays more or less $64 per year which is higher compared to the $34 for an exchange traded funds and lastly, $10 for institutional investors according to the BlackR