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Standing Out By Making Messages Stand Out

Clear, consistent messages about what makes a fund stand apart and serve a particular investment purpose well is what, in turn, makes a fund manager stand apart in the eyes of present or potential customers.

Here is a discussion on the importance of well-thought out messaging, between fund manager James Dailey, principal, TEAM Financial Asset Management, Paula Jurcenko, senior vice president, director of product management and sales, Huntington Asset Advisors, marketing consultant Dan Sondhelm, senior vice president, SunStar Strategic, and moderator Tom Steinert-Threlkeld, editorial director of Money Management Executive.

The talk was held at the 2012 Huntington Client Forum, in Indianapolis, in September.

MODERATOR: Dan, you did a great piece on your "Fund Factor" blog about marketing to sophisticated customers. Tell people how it should be done in mutual funds.

SONDHELM: Thanks, Tom. Does anyone remember the Pauze Tombstone Fund? [No response.] No. It died. The fund was designed to benefit from people dying. It invested in cemeteries, casket makers, all publicly traded companies. There were only nine or 10 companies that made up this product. I spoke to the owner, and he was getting very positive attention, until Forbes called him. They beat him up, because even though he understood the marketing story, he didn't have answers or good answers for the rest of the objections. There were only nine stocks in the portfolio. It was an index he created. Expenses probably were very high, especially for an index, but it was a small new fund.

Your story isn't just your story in a vacuum. Your story is: What are people going to be asking you about? What are they are interested in, and why would they buy you or keep you, given the market conditions? That's really important to people. They want to know what they're buying.

MODERATOR: We haven't seen something as clear as the milk industry's "Got milk?" campaign. How do you put a business as complex as running a fund into a very clear statement that summarizes why you're different?

DAILEY: I think the reason you couldn't find anything is, it's too hard potentially, meaning that there is a paradox between the demand of investment products relative to the reality of success in investing. The broadest marketing success you see in raising money tends to be hot money, high-dividend-yielding quality companies.

Why is that? Why did you see tech managers explode in the late '90s? Because it was hot.

Whereas, typically, that's not the best way to actually invest money long-term. That money tends to be hot and then leave. The ones that have built a brand over time, like a Vanguard, it's very simple: It's value. It's discount. It's commoditization.

And I think it's very difficult to try and come up with something that is sustained that's dealing with an inherently complicated issue and distill it down to something that's going to get people to do what they don't want to do.

MODERATOR: Isn't there some way to demonstrate that there will be money in their pocket over five years or seven years or 10 years if they go with you, rather than if they go with the hot product for the next six months?

DAILEY: There is, but it's mostly intellectual, and people don't care about numbers when they're drooling with greed or peeing in their pants with fear. It's not a rational decision-making process. And that's the challenge.

JURCENKO: I think one of the reasons you don't see any money managers on that list is because it's hard in this industry to get creative. This industry is highly regulated, so even if you have a big brand, it's tough to do something that out-of-the-box and that creative.

It's really tough to be a small player in this industry and make a name for yourself, because we don't have marketing budgets. The most important message we can play out there, especially for small asset managers, is when you're talking to your clients or your advisors or your shareholders, they need to know that there's not going to be any surprises, and that only comes from communication.

MODERATOR: How do you show that your experience, pedigree, depth of personnel, stability and tenure are better than the next guy?

SONDHELM: Let's talk about ways you're not demonstrating the depth of the team. Let's pretend one manager at the firm would say he's a value manager; the other manager would say he's a growth manager first. But they really manage the same fund; they tell the story a different way. That does not demonstrate a positive story investors are going to buy. In so many ways, it's consistency in message and delivery.