Clear, consistent messages about what makes a fund stand apart and serve a particular investment purpose well is what, in turn, makes a fund manager stand apart in the eyes of present or potential customers.

Here is a discussion on the importance of well-thought out messaging, between fund manager James Dailey, principal, TEAM Financial Asset Management, Paula Jurcenko, senior vice president, director of product management and sales, Huntington Asset Advisors, marketing consultant Dan Sondhelm, senior vice president, SunStar Strategic, and moderator Tom Steinert-Threlkeld, editorial director of Money Management Executive.

The talk was held at the 2012 Huntington Client Forum, in Indianapolis, in September.

MODERATOR: Dan, you did a great piece on your "Fund Factor" blog about marketing to sophisticated customers. Tell people how it should be done in mutual funds.

SONDHELM: Thanks, Tom. Does anyone remember the Pauze Tombstone Fund? [No response.] No. It died. The fund was designed to benefit from people dying. It invested in cemeteries, casket makers, all publicly traded companies. There were only nine or 10 companies that made up this product. I spoke to the owner, and he was getting very positive attention, until Forbes called him. They beat him up, because even though he understood the marketing story, he didn't have answers or good answers for the rest of the objections. There were only nine stocks in the portfolio. It was an index he created. Expenses probably were very high, especially for an index, but it was a small new fund.

Your story isn't just your story in a vacuum. Your story is: What are people going to be asking you about? What are they are interested in, and why would they buy you or keep you, given the market conditions? That's really important to people. They want to know what they're buying.

MODERATOR: We haven't seen something as clear as the milk industry's "Got milk?" campaign. How do you put a business as complex as running a fund into a very clear statement that summarizes why you're different?

DAILEY: I think the reason you couldn't find anything is, it's too hard potentially, meaning that there is a paradox between the demand of investment products relative to the reality of success in investing. The broadest marketing success you see in raising money tends to be hot money, high-dividend-yielding quality companies.

Why is that? Why did you see tech managers explode in the late '90s? Because it was hot.

Whereas, typically, that's not the best way to actually invest money long-term. That money tends to be hot and then leave. The ones that have built a brand over time, like a Vanguard, it's very simple: It's value. It's discount. It's commoditization.

And I think it's very difficult to try and come up with something that is sustained that's dealing with an inherently complicated issue and distill it down to something that's going to get people to do what they don't want to do.

MODERATOR: Isn't there some way to demonstrate that there will be money in their pocket over five years or seven years or 10 years if they go with you, rather than if they go with the hot product for the next six months?

DAILEY: There is, but it's mostly intellectual, and people don't care about numbers when they're drooling with greed or peeing in their pants with fear. It's not a rational decision-making process. And that's the challenge.

JURCENKO: I think one of the reasons you don't see any money managers on that list is because it's hard in this industry to get creative. This industry is highly regulated, so even if you have a big brand, it's tough to do something that out-of-the-box and that creative.

It's really tough to be a small player in this industry and make a name for yourself, because we don't have marketing budgets. The most important message we can play out there, especially for small asset managers, is when you're talking to your clients or your advisors or your shareholders, they need to know that there's not going to be any surprises, and that only comes from communication.

MODERATOR: How do you show that your experience, pedigree, depth of personnel, stability and tenure are better than the next guy?

SONDHELM: Let's talk about ways you're not demonstrating the depth of the team. Let's pretend one manager at the firm would say he's a value manager; the other manager would say he's a growth manager first. But they really manage the same fund; they tell the story a different way. That does not demonstrate a positive story investors are going to buy. In so many ways, it's consistency in message and delivery.

DAILEY: I think one of the things that we've benefited from is-I think most of the people in this room tend to be smaller, entrepreneurial, boutique-type managers. You know, this is your life. When you get in front of people, if you can communicate reasonably well, the passion comes out.

MODERATOR: Do you have an anecdote you can share about how you got that across to a customer?

DAILEY: We're battling it right now, actually, with our investors, because we run a very different strategy than most probably in this room. It's global macro, but it's a different form of global macro than most.

MODERATOR: Regard me as a potential customer, and explain global macro and why it's so great.

DAILEY: Global macro has historically been a higher-volatility strategy that doesn't correlate and does well when almost everything else can be doing poorly, like in 2008. So when you get in a period like we are right now, we've got to dig into the history and tell our clients and our investors, "Remember in '06 when we were really worried about the housing bubble and the buildup of credit and all those problems and, you know, getting defensive a little bit early was not fun at the time, but it paid off eventually?"

MODERATOR: There are a lot of global macro funds out there. What is different about yours in one or two sentences?

DAILEY: We're more equity-centric-most are fixed-income-centric-and we are more in line with the black swan mentality. We're short quite a number of things right now, including Apple.

MODERATOR: Paula, you run the Conservative Allocation Fund, the Balanced Allocation Fund and the Growth Allocation Fund. How do you get their messages across, and how do you distinguish each of those from each other?

JURCENKO: No matter what size firm you are, no matter what style you have: It's so important that you have your story straight. No matter how long you've been in this business, you think everybody is on the same page until you ask somebody a question. You ask five different people that same question and they might have five completely different answers. It's not until you go through that process that you realize you need to hone your message, and to make sure it's very succinct and very repeatable, so that no matter who asks it and who is answering it, it is the same question and the same answer.

MODERATOR: Can you be precise to your customers about what's different, what's different about your conservative fund?

JURCENKO: We have an in-house economist. So we look at what they are foreseeing for interest rates and the economy. We look at other things going on, like the election coming up, and we see where we see opportunity, whether it be in small cap, large cap, mid-cap, growth verse value, and we have a team of people that manage those portfolios accordingly.

MODERATOR: So if you're going to prove to somebody, a customer base, that you are better at what you do and everybody's touting performance, how do you prove you are better?

JURCENKO: Performance is obviously what everybody is trying to get to. But to me, the most important part is how you're positioning yourself to the end user, to the shareholder and to your advisors-how they expect you to perform and making sure it's consistent and repeatable.

MODERATOR: I'm a journalist. We spend time trying to distill things down into leads, which are one-paragraph summaries, and headlines, which are the one-sentence version of that. Isn't that, in effect, what every money manager needs?

JURCENKO: Yes. Actually, that's interesting, because Huntington does brand itself around this kind of fair-play banking, doing the right thing for their retail customers, and we have done very well with that.

Asterisk-Free Checking is basically a checking account that has no asterisks; there's no fees. We've been actually working very hard on the investment management side to duplicate that. We just launched a new fund last week.

And so we were trying to solve for a couple of things. One is, we know everyone is searching for yield and income. Whether you're in retirement or close to retirement or not even close to retirement at all, you're constantly looking for ways to enhance your income. In the investing world, people have this natural tendency to think expenses are too high; somebody is making money somewhere along the way except for the customer.

So we launched a fund called the Income Generation Fund, with a double play on the words "income generation" there-generating income for the generation of people looking for income. It's kind of our version of this asterisk-free concept.

MODERATOR: How about in your case, James?

DAILEY: Going back to this idea of clarity, if you look at who does most of the marketing spend in the industry, it's the life insurance companies with annuities and the big wire houses. If you look at how they market, it's got nothing to do with product. It's all about seeing families and selling dreams and hopes. We try to pretend that everyone's is better.

It's like Lake Wobegon: Everyone is above average, when we know that's not the truth. So I think it's an issue of finding a niche. It's like anything else. I think a lot of things Dan was referencing, as far as purity of message, or consistency-you know, good old-fashioned blocking and tackling, which is customer service and all those things that make any other business do well. Those work in our business, too.

But you can't turn lead into gold, and I think that that's part of the challenge with our industry. People are still trying to figure out that alchemy. And, personally, I don't think it exists. The concepts are what they are.

MODERATOR: The new customers are being reached through social media. You're probably not going to tweet about shorting Apple.

DAILEY: No. That would be a compliance problem.

MODERATOR: So how do you go about it? Now, you blog.

DAILEY: You can't be just putting out information. It's got to display some sense of either contrarianism or a different take on something, usually something topical. And there aren't a lot of firms that do it very well in our industry, because it takes a lot of effort. You've got to be able to write, which isn't easy. Probably the person that's done the best job and built a huge business largely upon it-the Hussman Funds, John Hussman. It's him and one other guy. They've never done any marketing, and all he's done is written a weekly commentary for the last 12 years.

MODERATOR: But his assets grow?

DAILEY: He went from, you know, $20 million 10 years ago to now, I think, $7.8 billion. Why is that? He had a niche.

MODERATOR: Which was?

DAILEY: Low-volatility, absolute-return-oriented, when people were starting to look for that. And he does an incredible job of conveying that he knows what he's talking about. So he's got a readership that is unbelievable, and people have stuck with him. It's that warm-and-fuzzy people get from reading content: "Wow. They really know what they're doing."

MODERATOR: How long does it take you to prepare a blog post?

DAILEY: Practice makes perfect, and that's where it's not easy. I started writing a weekly email to clients, ironically, about three weeks before 9/11. It was a good idea at the time, and then it became a really good idea because people were afraid and worried. I've since dialed back from weekly, because it just got to be crazy, the demands on my time. I've gotten to the point where I'll throw it together in a day.

MODERATOR: How long does it take you to find the supporting statistics?

DAILEY: That's not hard these days, particularly if the facts are in your corner. Google and Bloomberg terminals are pretty powerful, so not long at all.

SONDHELM: I saw [one of your recent posts], and there's that added section that says something like, "And what does that mean for our portfolio?" "What are we doing? What's that mean? I want to talk to you weekly. I'm not going to wait three months until the next quarterly report; I want you to know now." And that's very unique in the industry.

DAILEY: And basically, I've pivoted. I used to do it weekly and strained to come up with something sometimes, and now I do it when I think there's something meaningful.

MODERATOR: When you post, do you also send out an alert?

DAILEY: An email.

MODERATOR: Do you put it on a LinkedIn discussion group or anything?

DAILEY: We put it on Facebook and we tweet it. There's not a whole lot of distribution there. One of the things we haven't done enough of is sending it to some of the aggregators. There are some financial aggregator sites, like "Abnormal Returns," where they link to blogs that put up something interesting. And it just takes one or two where all of a sudden you've got, 5,000 people that come to your site because you've linked something. We haven't done that yet. That will be the next step.

MODERATOR: Do you have any way of knowing whether you're building relationships that way or getting more assets that way?

DAILEY: It's not necessarily getting assets as much a keeping assets part of it. And I think it helps in the sales process, particularly with the RIA market, you know, in building that credibility, where the sales cycle in the RIA market is very long.

AUDIENCE MEMBER: For James: We're talking about messaging matters, and I was curious how much, if at all, did your message play into your product design?

DAILEY: Zero. That's been our problem, to some degree. The marketing people we've dealt with have told us to do much different things than what we're doing.

MODERATOR: Paula, I know you said beforehand that you don't do much or any social media. Why?

JURCENKO: We dabble in it, but it's definitely an opportunity we're exploring. We do weekly updates on investment policy, our look at the economy, all those kinds of things, but it's typically through email. We're just starting to get into some of the blogs. It takes a dedicated time allotment to do it right. We don't want to start something and then not be able to do it consistently. So it's kind of a resource issue right now, to make sure that whatever we do, it's consistent with compliance standards. If you're out there every day, you've got to get that through a compliance check every day.

DAILEY: The blog I write is on our RIA side, which is like the Wild West, right? There are some compliance guidelines, but it's not nearly as constraining. If I had to go through what you have to go through on the mutual funds side, forget it, particularly with a small shop. We considered it, but to do something topical and timely in this kind of compliance environment is pretty tough.

MODERATOR: Dan, as a professional communicator, what are you telling people to do with social media?

SONDHELM: Companies certainly could be doing it if they're doing the other things, if their website is a strong tool they can use for distribution, not just a tool like a brochure.

So if your website is ready to go, great. If you're doing things like, you know, dealing with the media, great. Reuse those articles on your website and in your other sales and marketing efforts. Email marketing is a great tool, because that integrates really nicely with the sales team.

That gives the wholesaler an additional reason to call on somebody, if they're emailing good information. Social media is a piece of it. You have to decide, are you going after the retail customer? Are you going after the advisor? Are you going after both? What do you want to tell them? And how often do you want to communicate with them? Who is going to do it? Typically, those things take manpower, and for companies who can do it, great. For companies who can't do it yet, don't worry about it. Do the basics, with the website and the other ways to tell your story. Make sure you have a good story to tell in the first place.

Another way to get in front of these people, whether it's a portfolio manager interview or something community-related, would be videos. Videos are really popular. YouTube is a very serious search engine.

MODERATOR: And what would the video content be?

SONDHELM: It could be James talking about his market outlook. It could be somebody talking about a current event and what it means to them. Those are the more popular kinds, where you do them as needed and then you do different things with them. From there, once you have a video, that is helping you in terms of search optimization. And the nice thing about it-advisors love it because they can say to their client, "I saw the portfolio manager. I can look in his eyes." There's that engagement and connection that you can't have in words.

MODERATOR: Have you seen anybody using WebEx or Live Meeting?

SONDHELM: That's actually very simple to do-just kind of a webinar kind of thing with no audience. You have your little charts-whatever you want for 10 minutes, and you post it to your website. Or you go beyond the webinar and actually build a video. You can make it very sophisticated with the lights and everything, or you just have a camera and do your thing for five minutes. You know, Paula's income story is very interesting. If you can paint a picture as to what income means-if you're a retiree, you can give that nurse who is helping out your mom an extra bit of money because you get that check every quarter. If you can go beyond "Our income is 3.7 percent, the S&P is 2.2 percent," into "What does that mean?" in a story-whether it's print, video, webinar, a wholesaler meeting-that becomes a powerful sales tool. That's a powerful tool if you can go beyond the obvious.

MODERATOR: Quantify it?

SONDHELM: Well, telling a story to support the data. You get an emotional response instead of that intellectual, "Oh, I see that we have a bigger check here than we do here." What does that mean? And if you can kind of tell that story, that's a great tool.

DAILEY: One of the things I started doing when I went to the blog format is to do something funny at the end of the post. With my more serious ones, I tend to leave it out. But the one prior to this latest one was the Friday after Romney's nomination speech and Clint Eastwood's performance. So I put a video up of Saturday Night Live doing a spoof on him.

MODERATOR: Which were you spoofing? Romney or the chair?

DAILEY: Neither. It was just topical, and I thought it was funny. If you're looking at a sophisticated audience, challenging them, I think they appreciate it. I thought it in a lot of ways made some interesting points, and you just kind of throw it out there and let people take it the way they do. And you've got to be willing to respond. You get your right-wing clients or investors that email you angrily and then the lefties. You've got to be able to handle that. So I try to throw up either funny or challenging stuff that's topical and of interest, and I get more feedback from that a lot of times than I do from the content. You're getting the people in the habit of wanting to come read what you're going to say. It can't be just boring market stuff.

AUDIENCE MEMBER: How much time and energy does it take to capitalize on the replies that come back to you through whatever media source? What's kind of the experience ratio?

DAILEY: Great question. I don't even think it's 80/20. It's 5/95. Five percent of those readers are going to consume 95 percent of your time in responding, because they're the people who are really into it. We don't allow any comments or anything like that. You don't want your drunk client at midnight on a Friday putting a comment down about the Clint Eastwood video. So there's nothing public that's two-way. But I do entertain a lot of emails, and that's what I call the customer service. I probably go above and beyond what most people would be willing to do as far as a dialogue. I think at some point there's going to be a limitation of that, if we get a number of investors. The size we are right now, I can still sustain that. I would say I spend maybe a half hour responding to emails for each blog post I put up, and most of that is a couple of people who want in-depth response, and then it becomes a dialogue.

MODERATOR: So we are at the fourth anniversary of the credit crisis eruption. When Sept. 17 last came around, how did you approach your customer base? How did you keep your customers? And for the next black swan, if it happens this October, what would you do differently? First, what did you do, and then how would you apply what you learned next time around?

JURCENKO: You know, we've actually looked at the economic crisis as really a little bit of an opportunity, especially for the little boutique, kind of niche players that are sitting in this room and how we've managed money at Huntington.. People go through the times like '08, when no matter what fund family they were invested in, it was down. Over time I think advisors and customers are looking for different stories. Everybody can put an American fund in their portfolio, right? People are looking for something different, that's not something every other advisor is doing. And I think that's how you really leverage what we all do in this room because we're not an American fund, we don't have that brand, but we come to it as a niche kind of player and giving our advisors something diffrent.

During '08 we were actually managing as a separate account a portfolio that eventually became known as a disciplined equity fund. We turned it into a fund a couple of years later, but in '08 we were managing it as a separate account. It's basically a large-growth story, but it's leveraged. It has option strategies and so it's certainly not going to experience the full bull market, but it's not going to experience the major downturn, either. So we had really great performance. We were up in '08 by 7 percent. So we turned that quickly into a mutual fund, and it's now been out for three years. We've had really great success with it. It gives us a new story, a new niche."

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