Despite the pick-up in equity markets, the asset management industry continues to face challenges on a number of different fronts. To help provide insight for fund groups as they try to plan their strategic communications programmes throughout 2013 and into 2014, Lansons commissioned a number of research pieces. This involved interviewing HNW investors in key markets such as the US, Germany and the UK; interviewing 10 senior figures in the industry and then taking those findings to be prioritised by just under 200 senior figures from the European asset management industry.
We also asked leading investment commentators Phil Davis and Caroline Allen to consider asset managers’ communications and use of social media. These findings were then synthesised to create a source of insight for asset managers and a guide to the minimum standard asset managers should have achieved in social media by Spring 2013.
A key communication priority for asset managers is the issue of differentiation. Being able to answer the “why should investors choose us” question in an industry where the similarities between providers often vastly outweigh the variations is a considerable challenge. Asset management leaders increasingly recognise that from the perspective of the buyer (and particularly the end investor), there is often little to distinguish one fund group from another – even though to those on the inside the differences can seem considerable and well-articulated.
It is not only at the product and corporate level that the asset management industry needs to be sharper. Strategic communication rather than tactical implementation will also be vital. Reputation is critical, and asset management chiefs recognise that company and industry reputations need to be rebuilt.
Trust in asset managers is low. Therefore, customer communication is a major challenge. In the UK, levels of dissatisfaction among asset management clients are greater than among retail bank clients. Investors are dissatisfied with returns, but also with the clarity and openness of asset manager communication. This is recognised among the CEOs and CMOs we spoke to, who perceive a gap between asset managers and their retail clients.
This is an area of real concern as there is also an undercurrent of complaints about the governance, level of fees and executive pay at asset management firms. The challenge here is multiple. On one hand, clients and the regulators want asset managers and other asset owners to play a bigger role in encouraging and enforcing good governance among the companies they invest in; on the other, investment firms need to address how well they match these principles themselves. Walk the walk, and talk the talk.
Nowhere is this gap between asset managers and investors more apparent than in digital and social media. 80% of the clients we spoke to want to be communicated with digitally (e-mail, website, and social media) and a significant proportion of these prefer only digital communication. EMEA asset managers lag US fund firms in digital communication and very few senior figures are au fait with social media. We believe that asset managers need serious further investments in website, social media and all things digital in 2013–14 as they seek to keep up with their most progressive clients.
Those who remain sceptical of the value of social media to investment firms should take a look at the research conducted separately by Opinium into post-RDR sentiment among financial advisers see http://www.lansons.com/pages/a-brave-new-post-rdr-world-the-good-the-bad-and-the-its-just-too-early-to-say. With advisers prepared to drop clients with less than £250k in investable assets due to changes in fee arrangements, a significance advice gap is likely to open up. Those who are slow to make the step-up in social media may find that this is an area of the market that becomes harder to access.
The Communication Priorities for Asset Managers in 2013 is available on request. Please contact the Lansons Asset Management team on firstname.lastname@example.org to obtain a copy.