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How to break through when marketing in a crowded field of funds

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The market for funds is crowded. For asset managers marketing a fund, it can seem like an uphill battle to capture advisors’ attention and stand apart from the sheer volume of available options.

By the end of 2018, the total number of worldwide regulated open funds stood at 118,978, according to the 2019 Investment Company Institute Factbook, amounting to $46 trillion in assets — an extensive pool of funds for advisors to consider for their clients.

A crowded marketplace isn’t the only hurdle facing asset managers looking to market a fund. Mutual funds are facing increasing competition from other investment vehicles, contributing to an overload of information for both the advisor and asset manager.

Mutual funds are losing ground, as actively managed domestic equity mutual funds experienced a net outflow of $1.4 trillion from 2009 through 2018. These outflows likely signify a greater shift driven by investors and plan sponsors to other investment products, such as ones for retirement.

Asset managers need not be discouraged, however: In a world of competition and oversaturation, there are simple ways to successfully market your funds while simultaneously being a resource for advisors’ clients.

“By understanding the communication preferences of advisors ... asset managers can build up their credibility, and therefore their emails and communications will be more valuable and desired," writes StoneShot CEO Gavin John.
“By understanding the communication preferences of advisors ... asset managers can build up their credibility, and therefore their emails and communications will be more valuable and desired," writes StoneShot CEO Gavin John.

The average lead financial advisor spends about half of their time on client-related activities, according to a study from Kitces Research. Less than 20% of their time is spent meeting with current clients. The work behind investment management (research, trading and implementation) barely accounts for 10% of their time.

Their attention spans for researching fund information are understandably short and it is asset managers’ responsibility to adapt their strategy accordingly to set their fund up for success.

For asset managers, this means earning the trust of the advisor to whom you are marketing. Only 10% of advisors say they are interested in communicating with new wholesalers this year, according to an industry survey. With 50% percent of advisors reporting that they receive too much contact from firms they don’t already do business with, it’s a fine line to walk. Advisors also reported 59% of new annuity providers are reaching out too often, which would not pose a problem if the advisors trusted the content was valuable to them.

Building trust and credibility with advisors is extremely important to stay competitive, as most financial advisors often work with 10 or more asset management firms.

Determine how each advisor prefers to be communicated with and act accordingly — whether it’s through email, by phone, in person or a combination of the three. No matter how you are communicating, being upfront about when funds don’t work for a particular situation helps make an advisor’s job easier; they’d often prefer to not have to explain why a fund didn’t work as planned for the client.

By understanding the communication preferences of advisors, and taking a consultative approach to the information provided, asset managers can build up their credibility, and therefore their emails and communications will be more valuable and desired.

As the advisor’s role is to provide clients with recommendations on where to invest, advisors are often looking for valuable insight they can’t find elsewhere.

Rather than sales ideas, practice management pieces or fund brochures, they prefer economic perspectives, investing insights and legislative updates that are relevant to their clients’ needs.

With valuable content on hand for the advisor, here are three additional steps to take to achieve good engagement and be a better resource for the recipient:

  • Keep it short: Our data find email recipients are more likely to read your email if the content is between 101 and 300 words.
  • Link strategically: When aiming to be concise, link to more information on clear, user-friendly landing pages or microsites. For example, with the launch of a new fund approaching, our client BNP Paribas needed a way to clearly communicate its benefits to their clients. They built a portfolio of content to tell their story and created a single-scroll page. The content was efficiently distributed through a concise email highlighting the fund and linking to the microsite with more information about the product and team.
  • Use strategic and targeted distribution. Our State of Financial Services Marketing Report finds asset managers that use smaller, more targeted email distribution lists see better engagement with their advisor partners.

With the vast amount of competition for advisors’ attention, it’s more important than ever for asset managers to act as a trusted resource, rather than taking a one-size-fits-all approach.

Taking the time to understand their advisors’ needs, adapting their strategies accordingly and delivering relevant content will help ensure your communications, and your products, do not go unnoticed.

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