As the mutual fund universe becomes more crowded and the strategies offered to investors become more complex, fund managers are under pressure to further differentiate themselves and their brands from the competition. One way to stand out is to make investor and financial intermediary education a key element of any communications plan to drive brand awareness and asset growth.
Although the demand for alternative investment strategies continues to increase, a knowledge gap still exists about how these strategies are designed to function as part of a diversified portfolio. This is where educational campaigns and resources serve as a crucial bridge between fund firms and those they need to engage. However, by offering investors and intermediaries the opportunity to learn how complex mutual fund strategies work, and what type of investor would benefit the most from a specific strategy, managers can make their funds more tangible and accessible to a wider range of potential investors.
Along with increasing the understanding of a fund's management team and strategy, educational campaigns create new touch points for engagement by providing advisors with information, collateral, and resources they can share with their clients. An educational campaign also creates separation between firms that have similar strategies. By demonstrating how one strategy differs from the other or what makes one firm's management team unique, investors can gain greater perspective into the firm, its funds, and other strategies that might align with their goals.
T. Rowe Price also disseminates their market commentaries, money management tips, and educational materials geared toward investors and advisors via Twitter, Facebook, and YouTube. The firm's recent tweets include a link to its mid-year stock and bond market wrap-up and outlook report, while its YouTube channel features interviews with T. Rowe Price portfolio specialists.
State Farm's mutual fund division also offers robust and user-friendly educational resources for investors. The website for State Farm Mutual Funds provides videos that explain the benefits that municipal bond mutual funds could provide in today's market, the risks of investing in municipal bond mutual funds, and other topics related to their fund strategies that are relevant to their audiences. Other interactive tools and resources on the State Farm Mutual Funds website include calculators that determine how much to invest, how much a child's college tuition will cost, and other projected expenses.
This trend toward easier access to information has also surfaced recently among some fund firms which have made more of their advisor website content publicly available. Corporate Insight reported that Federated became the latest asset management firm to make this shift, al lowing advisors to freely view a number of pages and resources that previously required a login.
Regardless of which educational initiatives mutual fund firms utilize, brand consistency across every channel and the ability to work within a changing regulatory environment are paramount. In many cases, an external PR partner can bring industry expertise and competitor insight to educational campaigns in order to create content and strategies that are completely unique to what other firms may be doing. Besides freeing up internal resources, a PR partner can serve as the hub between a firm's internal departments to streamline the process of rolling out an educational campaign from conception to execution, while also providing valuable counsel on how evolving regulations over social media communications could potentially impact elements of the campaign.
In addition, data trackers such as Morningstar and organizations like the Mutual Fund Education Alliance (MFEA) can assist mutual fund managers with educational campaigns and strategies by providing resources, data, and guidelines for educational outreach. For those who have assets to invest in mutual funds, information is power. But for mutual fund firms, the ability to deliver information about their strategies and create a positive brand association in the minds of their target investors is even more powerful. Whether young, old, accredited or a self-directed investor, many of the key terms and strategies that are second-nature to mutual fund managers remain misunderstood. As a result, firms may be losing out on potential assets from investors that may be hesitant to invest in something they don't completely understand. However, by creating ongoing educational campaigns and making these resources both accessible and shareable, managers make it possible for financial intermediaries and investors at all levels to have more informed discussions about the best strategies for their portfolios.
Jennifer Connelly is chief executive officer of Jennifer Connelly Public Relations.