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3 Ways That a Good Narrative Can Help Asset and Wealth Managers Connect With Their Clients

3 Ways a Strong Narrative Can Help Asset and Wealth Managers Connect With Their Clients

A strong narrative in communications with clients can help asset and wealth managers to strengthen investment rationales, increase buy-in and nourish relationships.

Narratives drive markets. If that was ever in doubt, consider the experience of the past year.

Two shock votes, for Britain to leave the European Union and for Donald Trump to become president, could easily have derailed markets – particularly after a long bull run, with valuations stretched, and an era of accommodative monetary policy coming to an end. And indeed they did upset markets, but only very briefly.

After sharp falls on both occasions, a different market narrative took hold: that the new regime would be positive for businesses. That the market has been able to rally so strongly despite the nature of this new regime being so poorly defined, and without much change in the fundamentals, emphasizes the importance of the narrative itself as the driving force.

Yet narratives tend to be absent from asset and wealth managers’ communications. They may have pundits who can comment on the story of the day in the financial media, but their own communications material typically focuses instead on reporting recent performance in the blandest manner possible or perfunctory remarks on macro events.

This is a huge lost opportunity. Those in the investment industry that embrace narrative techniques will benefit in three important ways:

1. Strengthen Investment Rationales

First, use them to strengthen investment rationales and make them resonate. Behind every stock there is a story; tell it. This will often speak to a familiar challenge or popular theme: how is the healthcare company you own placed to ease the burden of ageing demographics, or how has your technology name built an unassailable market position? Elaborating on the investment case through a narrative will help your client understand it.

2. Offer Solutions, Not Products

Second, use them to frame your investment strategies as solutions rather than mere products. The fear of failing to meet a savings goal is pervasive and the anxiety associated with market volatility is palpable. But if the purpose of a fund is explained beyond a return target or narrow mandate – is it there to maximize clients’ wealth before retirement, to pay them an income in retirement, or to smooth their path to retirement? – investors will fuse it with their own objectives rather than view it as a simple interchangeable tool.

3. Fortify Relationships

Strong narratives strengthen relationships between asset managers and intermediaries — and just as importantly, between intermediaries and their end clients. The more clearly clients understand an investment case, the more they can internalize it and increase their conviction in it.

At a time when active management is under such intense pressure from the passive industry, forging this connection with investors is absolutely vital.

4 Strategies for Asset Managers to Drive Sales and Build Stronger Relationships

4 Strategies for Asset Managers to Drive Sales and Build Strong Relationships

For asset management firms, developing strong relationships with clients is essential. Clients need to know that their firm understands their priorities, concerns and goals -– and they need to trust the quality of their firm’s research and analysis.

Insightful content which resonates with readers enables firms to showcase their expertise and build trust with existing clients. Content can also play an important role in attracting new clients, engaging intermediaries, developing brand and driving sales.

However, achieving this is not without its difficulties. Research published by PR firm BackBay Communications and the Mutual Fund Education Alliance found that 64% of the asset managers surveyed struggle to develop a content marketing strategy.

In order to use content effectively, asset and wealth managers should:

  • Define your audience. Whether your intended readers are investors or advisers, it’s important to know who your content is aimed at and understand their investment objectives. Content which speaks to one group of people may hold little interest for another.
  • Define your goals. What is the objective for a particular piece of content? From brand building to funnelling readers to read a more in-depth report, know what you want to achieve with every piece of content you produce.
  • Explore different formats and channels. Firms are using everything from thought leadership and white papers to videos across channels as diverse as traditional print to the most cutting-edge social media platforms to get their message across – and some are doing so with considerable success. Consider how different formats and channels can be used to engage readers in a planned and consistent way.
  • Measure success. The desired outcomes should be defined and measured so that firms can gain a clearer understanding of the effectiveness of different approaches.

A well-thought-through content strategy can be a powerful tool in an increasingly competitive landscape. Investors are expecting ever more sophisticated services, while asset managers are facing growing competition from alternative investment models. By producing content which provides information, analysis and guidance in a targeted way, firms can give themselves a clear advantage.