Heartland Funds is taking a fresh approach to registered investment advisor distribution, utilizing social media, video technology and an advisory council to better support advisors. These tools help the firm more efficiently use its resources to find out what advisors want and then tailor a support strategy based on this feedback.
"As a boutique firm we are tightly focused on a few particular areas of the market as it relates to the size of our sales team," said Dave Ribbens, senior vice president, managing partner, Heartland Funds. "One of the key ideas is efficiency. What do you do with a sales team to keep it as efficient as possible when you have restrictions on what you are able to do because of the size of your firm?"
In the RIA space Ribbens said Heartland does several things that increase efficiency. "When we think about efficiency, the first thing we think about is do we have our teams focused in the right place given what our products are and is our marketing team aligned with that? In the RIA space, which we love, we think we do a couple of things that are efficient.
"RIAs tend to be relatively serious buyers in the sense that they often have a due diligence process and a means of selecting mutual funds that looks a lot like an analyst, even perhaps an instructional buyer," said Ribbens. "It's not about, 'are you a buddy of mine,' 'did you take me out for dinner last week,' 'do we play golf together,' 'do you live in my hometown?' That is just not germane to registered investment advisors," he stated.
Ribbens said what is relevant to RIAs is, "a clear story about why a fund is appropriate for their clients and an alignment of what you are trying to do in the fund with their perception of their fiduciary responsibility. When we started to realize all these things were true, we started to bring institutional quality communications to the RIA channel. We found that to be productive in a lot of ways."
Ribbens also weighed in on the technological front. "I don't have any data to support it, but it's my feeling that RIAs are embracing digital media and a social media strategy, perhaps more quickly than some other channels might be, specifically compared with the DCIO and bank trust channel," he said. "We've heard of RIAs inviting small groups of clients to their offices for meetings where they feature video from a portfolio manager and maybe even have a manager present online. They are certainly trying to connect via Facebook and YouTube and other means that might work for them."
Heartland is using these observations to deliver materials to RIAs that they can bring to their clients. "We've found a couple of ways to work with RIAs in that space that we think is innovative. One is via LinkedIn and another is though delivering our message in a digital format so that they can in turn facilitate its use with their clients," Ribbens said.
The materials distributed to RIAs by Heartland feature the firm's portfolio managers and CIO discussing specific themes within the portfolio.
Ribbens gives an example. "One of the written pieces we put out is called PM Perspective. This could be on a range of topics: we have an overweight to XYZ sector, why is that, what are the reasons we feel comfortable with this, or it might be a topic that has bearing on the portfolio going forward, and will be useful in upcoming months. These are often converted into videos. Our ideas are less about saying a value plus fund does such and such and more about, value plus has overweight to energy and here are some of the reasons we really like energy today. It's a deeper dive, not really a sales tool. It's more getting into the holdings and positioning."
With LinkedIn Heartland communicates firm news, but mainly takes a general approach to postings, serving up broad topics that are of interest to the RIA community.
"It could be a particular article that one of our relationship people read that is useful to advisors. We use it to communicate a things we do here at Heartland, like here's a new white paper and a link. We try to keep it more generic, however, less Heartland specific. It seems if you take LinkedIn and turn it into another way to pump a bunch of advertising to folks, you are just going to turn people off."
Another way that Heartland keeps its finger on the pulse of the RIA community is through its RIA advisory council, which Ribbens said has been beneficial for Heartland's business.
"This is the third year of our RIA advisory council. We do an annual due diligence event for our broader RIA community, in conjunction with that we announce a new RIA advisory council. They come to Milwaukee and spend a day and an evening with us. We engage them several times throughout the year via teleconference, perhaps, and an e-mail chain or a webinar."
Ribbens said the feedback from the council shapes Heartland's support strategies. "There are a few things that come out of this council that are helpful to our business and theirs as well. They are able to give us insightful feedback, on both the nature of the way we are supporting our funds in their practices, and also how we deliver that material. Our ability and our interest in providing electronic or digital media to RIAs really came out of that RIA council. Of course they comment on what they like and what they don't like about this white paper or some of the other materials, which is always helpful to make sure we are on point."