Customers have had their fill of fund blancmange.

Published 20th November 2020 by Chris Dell

The third in our series of articles on responsible investment.

This year we have seen a dramatic rise in the number and sales of responsible investment funds. There is a danger from a marketing point of view that they all tend to look and sound the same as each other – all using category norm language and imagery. This tends to lead to a lack of product differentiation – think income funds and coins or piggy bank imagery!

With increasing demand for investments which benefit society there is an opportunity for fund managers to tell more interesting and compelling stories about their investment approaches in this burgeoning and competitive category.

Dig a little deeper and you will find every subject has hidden interest. This has been my experience in my more than 25 years of marketing with asset managers. What they do, the way they think, how they construct a fund are all things that are distinctive and open to sharing with their customers – retail and institutional. And doing so provides understanding and reasons for buyers to choose one fund over another. In the past many have failed to grasp this opportunity, resulting in bland and undifferentiated fund communications.

It is only by interrogating the product that you find its truths – this has been a timeless truth behind great product promotion in any category.

As David Ogilvy advised, the job of marketing is simply to:

"Tell the truth, but make the truth fascinating. You know you can’t bore people into buying your product, you can only interest them into buying it”

I believe asset managers should take heed of this advice as they consider how best to market their burgeoning range of funds built using environmental, social and governance (ESG) factors. For many years the ESG tag has represented a rather large and amorphous collection of ideas and approaches that broadly fitted into one or more of the E, the S or the G.

But there is a lot of sophistication in the company selection made by a manager which the industry understands but fails to share. There are interesting views to share, debates to engage with and stories to tell. All of which will help differentiate one fund from another, as well as one fund manager over another.

It is my belief the current – and likely enduring - focus on this category and its popularity with investors getting this story right and investing in bringing it to life could be a big key to an asset manager successfully growing their business in a post Covid world.

Let’s get interrogating!

At the time when the industry needs to be talking more, why not talk to us?