FLX Networks, a platform that connects assets and wealth managers, has launched a new service it hopes will increase interaction between closed-end fund issuers, wealth managers, financial advisors and investors.
FLX CEF Nexus will provide financial advisors with data and education about closed-end funds, including through the use of video and written thought leadership content. It will also allow asset managers to market their products to wealth channels through what FLX founder and CEO Brian Moran calls a “virtual storefront.”
Moran noted that FLX CEF Nexus will provide a comprehensive view of closed-end funds. It will move beyond performance-based assessments to focus on explaining the fund’s strategy, educating advisors on who the fund managers are and creating a deeper profile of the industry than one can find in quarterly performance data. FLX will offer 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 increase investor awareness, in addition to providing industry data.
Closed-end funds are a $250 billion market. However, from our perspective, the closed-end fund pipeline has historically been underserved in terms of creating new content, new thought leadership, beyond what is needed for quarterly updates or fact sheets. This is a great opportunity for investors and advisors to really learn about this space, as some of these portfolios represent great opportunities to adopt strategies that can deliver alpha,” Moran said.
80 asset managers and advisors/representatives from over 200 wealth management firms have joined the platform. While FLX CEF Nexus will provide information on all closed-end funds on the market, funds run by managers participating in the FLX community will have access to more detailed data.
John Cole Scott, chief investment officer of RIA firm Closed-End Fund Advisors, said FLX has always been closed-end fund oriented and has grown significantly over the past five years. He noted that part of the functionality behind the new product may be to obtain secondary market support for closed-end funds that are not well represented among wholesalers. At the same time, “advisors can actually get a lot of value from the wealth of resources that are out there, and they want a bigger moat for registered representatives and registered investment advisors.”
The new service will also provide asset managers with marketing and distribution capabilities, including content and promotions, lead generation, board support and reporting, website development and access to a team of experienced wholesalers.
“Many managers in the closed-end fund space may not have the internal resources to develop this content in a timely manner,” Moran said. “They may not have in-house media, video or production facilities. They may not even have the technology or data on how to target effectively,” Moran said. “With FLX, they can bring all of these components together using a single solution and then leverage that virtual storefront to market directly to advisors who also come to FLX.”
