Boutique mutual fund managers and smaller ETF providers face significant challenges when competing against large scale operators. There is broad evidence that boutique investment firms, which make investment decisions based on in-house proprietary research and have disciplined and differentiated investment processes, often generate superior relative performance compared with larger asset managers.

With all these competitive advantages, why are boutique firms not topping the charts with assets under management?

An obvious reason is the much smaller sales and marketing budgets at boutique firms. The age old dilemma of how to generate the highest return on marketing dollars spent has been and will remain the key challenge for sales and distribution strategies for mutual fund and ETF providers. There are some steps, however, which are relatively low cost and make meaningful impacts on existing and potential new clients.


The proliferation of technology and automated customer relationship management has clearly affected distribution of open-end mutual funds and ETFs. For instance, it is easy to see how the development of CRM platforms and software has made it easier to make far more impressions with customers and potential new customers than ever before. Unfortunately, more is not always better. The average number of emails sent and received per day for business emails is 120. That is one email every four minutes during the workday and only 22% of all emails are actually read.

Finding the balance between sending emails with valuable content that can help advisors and just sending mass emails is crucial to keep your emails from getting deleted. It is clearly important to personalize communications. To make communications even more effective, consider integrating a multimedia approach into your marketing and distribution strategy. A stamp only costs 49 cents, and hand-addressed envelopes have an open rate of 99.2%. The envelope is the "first impression" of a letter. Customizing the envelope is an opportunity to connect and capture the attention of the recipient. Consider creating a postcard with your firm's building or team on it. This is a unique follow-up item that can help differentiate you from other firms.


Being able to get in front of key advisors and introducing your products is, of course, key to success. Many RIAs and brokers, however, limit the numbers of calls or meetings they take per week with wholesalers. They often utilize assistants as gatekeepers. Background research before making calls and scheduling meetings is vital to unlocking these doors. Mutual fund and ETF providers should encourage their sales teams to read the advisor's or the RIA's background and biography to find mutually helpful connections. The sales associate might have the same alma mater or partake in similar hobbies and should try to use these connections to build rapport.It likely goes without saying, but understanding individual customers is of paramount importance. It is quite vital that a wholesaler know specific advisor's challenges and needs. One product rarely solves all problems. Of all the skills required to "know thy client", active listening is arguably most essential.Some advisors may know clearly what their needs are; some may need a little help, but understanding their business goals and how your products will fit into their practice and add value, will help solidify a long-term relationship. Knowing this information can turn a mere salesman into an external trusted consultant in a client's eyes.Profile advisors and provide them with the tools and content they need to better serve their clients. Cementing a relationship with the advisor will benefit a marketing executive in the long run, as most advisors will meet and do business with people they know and trust.


Tracking sales and distribution methods that work will help fine tune the overall process. If a mass email is dispatched, note the number of advisors who actually opened the email.

Mutual fund and ETF providers should follow up with advisors to see why the email was effective. It is important to identify both successful and unsuccessful methods at each step of the marketing process.

This will enable more systematic improvement relative to broader evaluation. Having exact figures will help make informed decisions. Reviewing sales data helps increase the efficiency of the sales team by showing which efforts have the greatest impact and where one should spend the most time and money.

Michelle Sarmiento is a marketing/sales associate at James Investment Research, a money manager based in Alpha, Ohio.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.