Marketing Investment Funds – It’s no “Field of Dreams”

Marketing Mellstock Tiger institutional

In the 1989 Kevin Costner film “Field of Dreams”*, the main character hears a voice telling him “Build it, and he will come”, alluding to his father with whom he had a troubled relationship.  Many entrepreneurs in different industries have applied a similar concept. – Build it and they will come – meaning, if we create our product or service, customers will come and buy. Sadly, it rarely works in business.  Just delivering a product, or a service or even an investment fund that the designers think is a “dead cert”, is not enough.

We have many discussions with managers who offer funds with great performance, perceived market appeal and a good regulatory profile. But which are lacking in investor engagement and therefore, subscriptions volume. Investors simply aren’t listening to them and are going elsewhere. They have built a certain winner, but investors just don’t come and buy. What’s going wrong?

This is a common story in fund management today. A crowded market place is hard to break into unless your marketing is not only sound and well-planned, but targeted to your chosen investor audience.  Many firms take a top-down rather than a more-preferable, bottom-up approach. This means they have the product packaged and ready-to-go without any significant investor research or structured assessment of market demand.  They almost say: “We’ll build our funds and investors will come.”  Sadly, even though in many other fields the premise of “Build it and they will come” can work, it rarely works in the investment business.

Before you can market your product, you need to establish your own goals and objectives, evaluate your core values as a fund manager and fully understand your own business and why you do, what you do. What motivates you, what are your relevant interests?  Are you passionate about the asset class or the principles behind it?  (Responsible investing is one example).  If you don’t know these things and don’t “feel” what your business stands for, how will your investors know and share those feelings enough to trust their money with you?

Using differentiation to build trust and engagement

Just having a good investment strategy isn’t enough. You may know what you do and how to do it well, but do you know what makes you and your company tick? What makes you and your colleagues stand out amongst dozens of other managers who are offering the same promises?  The key word here is “differentiation.” Offering something that sets you apart from the rest.

Too many businesses, in all industries, suffer from a distinct lack of forethought in establishing what makes them worthy of customers’ attention. And eventually earning the most crucial element in any relationship, namely, trust. Trust leads to them spending their money in a store or restaurant or investing money in your fund ideas.  Remember, people invest emotionally as well as rationally – behavioural finance theories tell us that.

A simple Results Cycle – each element is mission-critical for a good marketing outcome

Marketing Results Cycle

Taking time to align your clients’ needs and perceptions of themselves, with your proposition and your perceptions of yourselves, is a critical stage in the marketing process. This should begin way before you open your doors to accept investor money. This is differentiation.  Many managers do not take these vital planning steps – if you do, you are showing your customers you care enough to explore these vital elements of your own proposition and are laying the foundations of a good future relationship.

At the planning stage, it is important to go back to basics. Do you enjoy what you do? How can you align your proposition with your customers’ needs, desires and, critically, their aspirations? You can’t always align your customer’s needs to your product. That’s likely the wrong way around.  For example, an income investor needs just that – income.  Great medium to long term capital growth may just not be what they need.

What lead can you take from success stories elsewhere in the investment industry or even from businesses in other industries that have clearly defined and achievable marketing goals? Who do you admire and why?

Then, think deeply about the fund vehicle you are proposing and if/how it needs to be shaped to match your target market. Is its regulatory status in-tune with the investor protection criteria necessary to create the right environment?  There is such a thing as over-regulation – would your new customers feel restricted by an over-robust and unnecessary supervisory regime?  Conversely, would such regulatory oversight be comforting, boosting trust and engagement?

Creating a marketing plan with achievable objectives

Finally, create a practical marketing plan that starts at the heart of the proposition you offer, takes full account of the resources you have available. And what truly achievable goals and objectives you see in the near, mid and far time horizons.

Evaluate and project the fund’s personality and other abstract “soft attributes” into your proposition alongside the more tangible “hard attributes”. Soft could be the ability to communicate your feelings about investment markets (always a very personal thing). Hard attributes could be proven skills and track record in your chosen investment markets and asset classes.

People invest with people.  People invest more with people they trust. Trust is built upon engagement and confidence-building. These are critical steps to building any investment business and creating the right environment for investors to feel right about investing with you. There are no short cuts. Asset classes and investment strategies can come in and go out of favour. Yet a trusted and admired investment brand must be built on more than a passing fad or bandwagon.

Understanding why you do what you do and how that matches and enhances investor expectations and satisfaction. This is a crucial step in fund design and hence, fund marketing, and ultimately fund success.  If you have put in the right foundations, built a fund that meets investors’ needs and expectations, there is a much better chance they really will come and buy!

* Field of Dreams (1989) starring Kevin Costner and directed by Phil Alden Robinson, distributed by Universal/TriStar/Carolco

Biography of the author

Tony has a background in the investment management industry that started in the early 1980s in the UK. His practical experience in both management and marketing provides a unique insight where both elements combine to create unique and attractive investment propositions. Read more about him here


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