This in turn is leading the heads of distributions and sales in asset management firms to demand more reliable and trustworthy data from operations. They have recognised that high quality information about their products can be used as a differentiator in winning new business, and that it positions them to deliver best in class client service which leads to higher levels of customer retention.
This data is directly used in the monthly and quarterly production cycles that serve their clients with regular updates on investments and power up the sales engines and related materials in the go-to-market side of the business.
But, surely investors are only interested in the risk-adjusted performance? Why would the quality of information in point-of-sale documentation or reporting influence an investor?
The reality is that investors do not, and should not, use past performance as the sole criteria in their decision process any more – so many other factors are important. The same applies to distribution channels for funds - fund providers need to differentiate themselves from the pack.
So clearly the distribution channels want good products to sell, but they need good materials (and good information) to help them make their products stand out from the crowd.
They not only want good sales support materials though, they want them on time, and ideally, they want them before their competitors have theirs. They want to wow the investor with the breadth, depth, and timeliness of the information. They want to ensure that whatever they present matches 100% what the investor will find on the web.They want to use the latest technologies to deliver the information to the client – support for a touch screen tablet is the new must-have request from the field sales teams.
So, having a good product is a given. Having smart and exciting ways of delivering point-of-sale information to the potential investor is a given. The best product in the world, and the sexiest of sexiest tablets will be useless if the content you are delivering is late, limited or just plain bad.
Investment decisions are built on trust, trust in the advisor, trust in the brand of the provider, and trust in the material being presented.
Trust in the product is built by providing clear, deep, transparent information on the product at point of sale – so one or two page fact sheets that are two months old do not cut the mustard.
Trust in the information being communicated is the foundation on which the investor will build their impressions – it is their window on to the organisations they are doing business with (or considering doing business with).
The investor wants an appropriate mix of qualitative and quantitative information – too much text and not enough stats make it look like you’re hiding something, too much stats and not enough text make it look like you have a lightweight analysis team.
The investor wants first-class, qualitative analysis of the market segment / strategy that the fund is targeting – they want to understand the product and market risks at play. They want quantitative and technical analysis that open the lid on where the performance and risk of the fund is being generated, and they want to understand how this breaks down when compared to peer-groups, external category averages and the stated benchmark.
Something which very few asset managers have embarked upon is providing advice on which products from the same provider (currently) have a correlation co-efficient that would lower the overall risk of a portfolio while maintaining overall target performance – think about how Amazon.com markets books that are related to each other.
Finally, clear unambiguous presentation of the fees/charges for the product, build confidence and support the trustworthiness of the advisor, provider and product alike.
To summarise, by sorting out the “plumbing” i.e. the flows and quality controls around product information from various internal and external sources, sales and distribution can leverage this reliable and trusted data to accelerate new customer acquisition and increase customer retention rates.