Recognition, Relevance and Respect

It's amazing that these three little words, or the three R’s, can have such an impact on how Fund Management firms interact with customers, as these are the stages in helping build a successful fund management business. However it is often not seen by many managers as important and sadly not always by the marketing teams who represent them. In a mature business these aspects are taken for granted as it is endemic; however for new firms and boutiques it has to become part of their growth process as to how they will grow. Ultimately the sales strategy should be built upon these three little but important words!

Recognition

This part of the process incorporates building a relationship with the potential customer. It needs to be regular and concise information that is delivered in a way that the customer can access easily. That m

ay be email but, as we all know, our inboxes these days are filled with so much current information that “new” just doesn't get a look in and often will be overlooked or deleted without so much as an acknowledgement. Even where a relationship has been established through time at either a previous house or a contact, the customer will need to filter you through all the others and if they are reviewing their current options then they may not be in the mood to start looking at new product. So how do you get in front of them when they are so busy? You have to be savvy with your communication and if you deliver a document to them which takes 30 minutes to read then you will not get a minute of their time and more likely to annoy them. So how do you get what takes 30 minutes to read in front of them? One of the easiest ways is video either directly or as part of a broader presentation or platform. There are many ways to do this. You can set up a camera in your office and do regular updates and upload to your website, Blog, Twitter, LinkedIn or even Facebook. The other option involves getting yourselves on media platforms or discussion panels with the either independent firms like Asset TV or with a trade paper such as Citywire. You might have to pay a pretty price though but if you are happy to invest you can then encapsulate what you want to say in a social friendly manner and, with the use of mobile technology, more and more are watching video on line at all times day or night. Once you are on-line then it is yours to use and abuse and it starts to build your library of comment/opinion. Regular updates and sound bites are the best way to keep your profile up. Naturally having an opinion is critical if you are to make any impact. Shrinking violets need not apply here as the market wants an opinion, thought leadership or possibly just an occasional rant! Whichever route you take be prepared to have dialogue from all quarters but once the discussion begins you will get the following and recognition that you need.

Relevance

Critical in everything you do naturally, however it is amazing how many fund management businesses promote their products/services to the wrong person or team. Simple aspects as sending the equity note to the head of fixed income can cause you a reputation meltdown. So clearly identifying the right individual is vital. Before that, it is important to ensure the firm is the right sort to buy your fund. Many firms buy direct equities in the UK, USA and other major markets so no point in pitching a UK Growth fund

then! Equally many Family offices are looking for capital preservation for their clients and whilst they may look for some sex and violence in funds on the whole they will be looking to maintain their assets with relevant tax breaks etc. That's not to say you shouldn't pitch a good esoteric fund as they do like a good differentiated product for the portfolios! When it comes down to what you communicate there is an important lesson here which is how detailed it is and how much content there is which is relevant to the investor. If you pitch CFA level information to an IFA then whilst they might be impressed with your technical knowledge they will have no need of it as it does not help them in doing their job. Know your audience and pitch it at the right level. Get it wrong and you run the risk of alienating them for a while.

Another aspect is making you, the firm and the fund all relevant to the buyer. They need to feel you are relevant to them. Are you are a firm they can use? Do they know enough about you and the funds you are promoting? Do you fit the criteria they have set as a standard for example? If they can only use a UCIT fund then why are you pitching a Cayman product?  Research is critical here and make sure you really know who you are talking to and what they need. A bit of work here will save you massively in the long run. If you focus on a few potential clients and spend a few days on getting the information then it will help you ensure you are targeting the right firm and person with the relevant information.

Respect

The holy grail for all funds and managers alike in investment management! In order to gain respect many firms assume that only performance gets you respect. This in turn should lead to loyalty from investors. As an old wag once said to me, "if you want loyalty, you should get yourself a dog". Investors give respect for the way they are treated. Honesty, transparency in everything, regular communications, shared alignment of interests and above all a good understanding of what they have bought. The assumption is often made that a regular fact sheet is enough. Sorry but an emphatic NO! As a marketing man I get frustrated with managers who have little to say between factsheets. There is a lot going on all the time so make comment whenever you can. Regular communication is whenever things happen in the fund, the market or overall economic aspects for example. Best to get it out as soon as things change or your views change.

The respect of investors is demonstrated by them looking at you as the "go to" manager in the asset class you manage. It will initially be seen by the press as they look for a quote or an article on your subject. Following that investors then realise that when they want an allocation to the asset class you are responsible for then you are the investment of choice. Only a handful of managers get to this level but when it happens the results can be staggering and practically overnight. There are a few managers who have gone from boutique to large manager in a handful of years because they deliver at all levels.

Now I am the first to admit that none of this is rocket science but it is all too apparent that many Fund managers can fail to understand the process of sales and marketing in the growth of assets. Many seem to think that "once they hear me they will buy and once those numbers get in front of them it's a slam dunk". Sorry to burst that bubble but no. Follow a proper sales strategy and success will come; it just takes time.......

Happy Hunting

Stuart Alexander

Chief Executive