In a bygone era when the value of active investment managers was accepted as a matter of fact, asset management firms could focus their marketing efforts on the quality of their firm. As a result, most marketing materials tended to center on the four Ps: people, process, philosophy, and performance.
But in today’s investment landscape—one that is defined by continued outflows from active to passive strategies and investors who are increasingly skeptical of active management—asset managers can’t afford to simply describe why their portfolio managers are great at capturing alpha. Rather, asset management marketers need to explain why alpha exists in a specific corner of the market and explain how their portfolio managers are going to capture that alpha for investors.
In other words, asset management marketers need to become better at telling their alpha story. And that is the topic I discussed as the keynote speaker at PAICR’s May 23 Regional Roundtable.
The luncheon event, which was hosted by investment firm Brookfield at its office in downtown Chicago, was attended by about 25 marketing professionals from across the asset management industry. PAICR is one of the leading associations for asset management marketing and communications professionals, and their Chicago chapter hosts several educational and networking events throughout the year.
Incorporating Elements of Storytelling into Your Investment Thought Leadership
Every good story has conflict and resolution, as well as a hero and a villain. Asset management marketers would be wise to remember this as they develop their white papers and other forms of thought-leadership content.
When it comes telling your alpha story, I believe the main source of conflict a writer must resolve is the audience’s misconceptions about the topic. The writer should start from the premise that the audience either has incorrect information or incomplete knowledge about the investment opportunity. (Otherwise, why would you be writing the piece in the first place?) Your job as the writer is to resolve this conflict this by enlightening the reader about the reality of the situation. By rescuing the audience from their misconceptions, your firm becomes the hero.
For example, a real estate fund’s audience may already know that rental prices are at all-time highs, but they may be confused about the regulatory and demographic forces that are driving this. Or an emerging-markets fund’s audience may know about the financial turmoil caused by the recent bribery allegations in Brazil, but the audience may not know how similar political scandals have affected currency values and equity prices in other emerging markets. Publishing white papers or blogs that directly address the audience’s misconceptions or fill holes in their knowledge are effective ways of building credibility and showing the expertise of your investment professionals.
Even outside of thought-leadership pieces, storytelling principles can help make your marketing materials more compelling. The human brain has a hard time remembering data and abstractions, but those seem to be the default modes of communication for most marketers in the asset management industry when describing their firm’s strengths. For example, when describing their stock-selection process, a firm is likely to take one of the two following approaches:
- Simply stating the abstraction: “Our analysts use an exhaustive, disciplined process to uncover the best investment opportunities wherever they are in the world.”
- Quantifying the abstraction: “Our analysts visited companies in more than 30 countries last year and met with the management teams of more than 200 companies.”
Rather than talking in abstractions and data, your idea will be much more memorable and compelling if you can weave it into a story that articulates the larger theme. For example, you might say, “During a trip to Myanmar, which was one of the 30 countries that our analysts visited last year, one of our analysts noticed a growing number of IT outsourcing firms in Yangon. As a result, we started to investigate whether the IT outsourcing industry in Southeast Asia would be poised to capture market share from India.”
Stories are powerful because they transform your message from abstraction into something real and tangible.
Streamlining Your Content-Creation Process
The theme of the May 23 PAICR roundtable was editorial processes and thought leadership, so I also shared nine “hacks” that investment firms can use to streamline their content-creation processes.
Not having efficient processes in place for each of the three main phases—planning, writing, and editing and approvals—can derail any firm’s financial content marketing efforts. As I told the audience, if I had a dime for every asset management firm that, in January, planned on doing six white papers a year, but by mid-May was still trying to get the first one out the door, I’d be a rich man.
About the Author
Scott Wentworth is the founder and head writer of Wentworth Financial Communications. Scott and the team of writers and editors at WFC help professionals across the financial services industry build their brands by creating investment-grade white papers, bylined articles, newsletters, blogs, social media posts, and other forms of content marketing.