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What Factors Most Impact How Much Capital You Raise? The Answer Might Surprise You!
On an overarching level, almost everyone knows that trust, above all, is the single most important factor for your asset management brand. But how does a fund manager go about establishing trust, or perhaps increasing it? This is essential, as even investors engaging in the riskiest of financial strategies try and control as many variables as possible. They work with asset managers and investment companies they know, invest using the quickest or most reliable platforms, and do as much research and due diligence as possible to educate and protect themselves.
Investment management companies try to build trust through a number of investment marketing and financial services advertising strategies to raise assets under management. Fund managers often cite their current assets under management, the size and experience of their investment management research team, awards and Morningstar ratings. When possible, fund managers also highlight fund performance in investment marketing materials, comparing it to industry benchmarks over favorable time ranges. What might surprise you is that these methods of building brand awareness, though certainly confidence building in some ways to some prospective investors, are all backwards looking, and are not the most powerful way to raise capital. As many fund managers and asset managers are saying the same thing, these factors are rarely differentiating.
For financial services companies dealing with and managing other people’s money, trust is an especially important consideration. This is the same reason so many public companies take the time and energy to manage their corporate identity and investor relations. Investors and fund managers invest more readily in companies they understand. Knowing where a company is going and the kind of challenges or expectations it has for the future reduces an investor’s perception of risk. Asset managers, by actively engaging in investment branding efforts and proactively engaging in public relations and communications with investors, can expand and accelerate their capital raise and increase AUM. Additionally, by building trust, investment marketing and financial services not only help you to gain new clients but foster relationships with the clients you already have, making them much slower to leave during adverse market conditions.
Even the potential for significant gain is not be enough to win people over if a sense of trust is lacking. Investment presentations and marketing materials need an overarching brand messaging clearly communicating and defining your competitive edge. Investors and prospects need to know what makes you as a financial services company most trustworthy and notable. This involves why and how you do what you do and how this differentiates you. Building mutual understanding goes a long way in the investment management world – standout performance may be tempting and certainly intriguing enough to grab people’s attentions, but investors will increasingly look to place money in the hands of those they can depend upon.
MBC Strategic is an award-winning Los Angeles financial corporate communications firm with nearly two decades of specialized American investment branding experience. Take a look at some of our sample financial services marketing and investor relations work below.
Kayne Anderson Capital Advisors
Echelon Asset Management
SunAmerica Asset Management