Monthly Archives: January 2014

The ‘Four C’s’ of great fund manager communication – 21 January 2014

Investors have literally 100’s of options to choose from in most asset classes, and so, fund managers need to have a Compelling, Clear and Consistent message that resonates with the target audience, which is then Constantly reinforced through regular communication – coordinating the ‘Four C’s’ is paramount if the desire is to generate sales enquiries and ultimately sales.

Given the level of choice that investors have, what can fund managers do to ensure that they stand out from the crowd or at the very least, are considered as one of the options in an investors choice set?

Six quick tips to ensure communication excellence

1.   Ensure you understand the key messaging needs of your target audience

If your target market are direct investors, such as SMSFs (e.g. B2C), the messaging on how your capability can fulfill a portfolio need that cannot be achieved by investing directly (i.e. the preference for most investors in this segment) is where the emphasis should be.  If you have a highly technical skill, such as a hedge fund, where the audience is typically sophisticated (e.g. institutional gatekeeper/B2B), key messaging should be around the inefficiency being exploited, showing demonstrable proof of your ability to exploit this inefficiency by using more technical language, focusing on the quality of your people, backed up by key performance analytics (e.g. the Greeks).

Whatever the target audience, test the messaging as often as possible to ensure it is being received as intended.  But most of all, it needs to be Compelling and Clear!

2.   Check for message consistency across your communication mediums 

It is recommended that the key messages you want to convey (and we assume that these messages are important to your target market), need to be Consistently conveyed across your PowerPoint, Website, YouTube clips, LinkedIn page, RFP documents, FAQs, Factsheets and offer documents etc.  Any misalignment could cause confusion with the target audience as well as with employees and other stakeholders.  Confusion might lead to questions that could have easily been answered in any of your chosen mediums, which can take the focus off your core message.

3.   Constantly reinforce your message

Investors rarely set and forget.  They are keen to hear from the people who are managing their money.  Ultimately, funds under management (i.e. the connotation here is that the money belongs to the fund manager) should be re-classified as funds under governance (i.e. the connotation here is that the money actually belongs to the client and is on loan to the manager).  If more managers thought like this, they might approach how they communicate differently.

Therefore, fund managers should communicate Constantly, in line with how the manager manages money and then on an ad-hoc basis to ensure that each communication is read and understood – whatever the frequency, the way you communicate should be aligned to the investment philosophy and strategy of the firm.  The investments and commentary/webinars must make sense to provide a level of ‘true to label’ comfort for the investor.

4.   Check how you are represented in third party mediums

In addition to the ‘Four C’s’ highlighted above, managers should check to see how their funds are represented on third party platforms e.g. newspapers etc. If you are a long only equity fund and are showing up in the hedge fund category of the paper, investors might pass over you when you might be in a strong outperformance period versus the correct peer group.

You should also check the Morningstar website (or other such public sites) to ensure that you are in the right asset class and that your performance figures are as up to date as they should be.

Other third party media includes research/consultant reports.  Do they accurately describe your skill? You may not like your rating but as long as it accurately describes what you do etc then you can still proactively engage with investors.

Further, look at how dealer groups have you represented on their Approved Product List and in their platform of choice.  It also pays to check with margin lenders to see if they have you in the right category – if you are in the wrong category, this may limit (or even close you out) of the margin lending market.

Doing the above does a lot your marketing positioning and communication for you, and is free to change!

5.   Present your story to friends to see if they understand it

A safe environment to present your story is often the best way to start.  Preferably, this audience will include people outside of the industry to test for simplicity and for message engagement levels.  Even the most sophisticated investment strategies should be told simply. If they look confused, ask where they lost track during your presentation to see if you can make some simple changes to get greater clarity.

6.   Be clear on the why, the what, the how and the why you

Fund managers need to be able to articulate the ‘why you exist’ simply and quickly (e.g. the case for the capability), the ‘what’ is being offered (e.g. what type of strategy and product structure and how it fits the philosophy of the firm), the ‘how’, both in terms of how you go about managing money and in terms of how an investor might use the fund in their total portfolio.  Most importantly, the ‘why you’ is paramount (e.g. why an investor should invest with you) – if you can articulate these points with ease, and consistently apply them across all mediums, you will be in a great position to engage with investors.

The above is not a comprehensive list of what is required to achieve communication excellence but enough to get you thinking about some simple (and free!) things you can do to ensure your story is Compelling, Clear, Consistently applied and Constantly reinforced.

If you would like a review of your  distribution strategy, please email andrew@winstoncapital.com.au or call Australia +61 401 716 043.

Andrew Fairweather, Founding Partner