FLX Networks, a platform connecting asset and wealth managers, launched a new service it hopes will increase engagement between closed-end fund issuers, wealth managers, financial advisors and investors.
The FLX CEF Nexus will provide financial advisors with data and education on closed-end funds, including through the use of videos and written thought leadership content. It will also allow asset managers to market their offerings to the wealth channel through what FLX founder and CEO Brian Moran called a “virtual storefront.”
Moran noted that the FLX CEF Nexus will provide a comprehensive understanding of closed-end funds. It will go beyond a performance-based evaluation, focusing on explaining the funds’ strategies, introducing advisors to who the fund managers are and creating a more in-depth picture of the industry than what people can find in quarterly performance data. FLX will provide a dedicated category for closed-end funds on its Investments Exchange, a dedicated FLX TV channel for fund updates and a monthly newsletter to help drive investor awareness, in addition to providing data on the industry.
Closed-end funds comprise a $250 billion market. Yet, the closed-end fund channel “has historically been, from our perspective, under-served when it came to creating new content, new thought leadership beyond what was required to just deliver in a quarterly update or fact sheet. There is a really good opportunity for investors and advisors to learn more about this space, given the fact that some of these portfolios represent incredible opportunities to engage strategies that can deliver alpha,” Moran said.
Eighty asset managers and advisors/representatives from over 200 wealth management firms have joined the platform. While FLX CEF Nexus will provide information on all the closed-end funds in the market, more detailed data will be available for funds run by those managers who participate in the FLX community.
FLX, which has always had a closed-end fund orientation, has grown significantly over the past five years, according to John Cole Scott, chief investment officer with RIA firm Closed-End Fund Advisors. He noted that part of the function behind the new offering might be to garner secondary market support for closed-end funds that don’t have strong representation with wholesalers. Simultaneously, “advisors can actually gain a lot of value from the deep bench of resources available there, and they are looking to make a bigger moat accessible to registered reps and registered investment advisories.”
The new service will also provide the asset managers with marketing and distribution capabilities, including content and promotion, lead generation, board support and reporting, website development and access to experienced wholesaler teams.
“A lot of managers in the closed-end fund space may not have the internal resources to develop that content in a timely fashion,” Moran said. “They may not have in-house media, video, or production facilities. They may not even have the technology or the data on how to target effectively,” said Moran. “With FLX, they can use that single solution to piece together all of those components and then leverage that virtual storefront as a way to market directly to advisors who are also coming to FLX.”