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Today's marketplace is crowded with thousands of investment managers offering investment products of all types to meet evolving client needs around the globe. In 2011, the winning investment managers are most likely to be those who go back to basics and:
- Acknowledge the importance of relationship building.
- Focus on distinguishing themselves from others.
- Get their story right and communicate it in a consistent fashion.
The Importance of Relationships
Building and nurturing relationships is not a revolutionary idea--what has changed is the way relationship building happens. Trends of particular significance for sales and consultant-relations professionals include:
- Entertainment is a strategy of the past.
 - Need to be technically savvy.
- Should be perceived as part of their firms' investment teams.
- Must know their products and strategies inside and out.
- Need to be brilliant at every point of contact with the outside world.
Identifying and Communicating Distinguishing Characteristics
All investment managers face the challenge of distinguishing themselves from the competition--identifying their "edge." For many, this is not a trivial exercise. One suggestion is to conduct an offsite retreat with representatives of sales, consultant relations, marketing, client service, investment management, and senior management to discuss the factors contained in Exhibit 1.
Exhibit 1: Seventeen Factors to Consider When Determining your "Edge" and Distinguishing Characteristics
1. History and background
2. Mission and vision
3. Cultural values
4. Ownership and organizational structure
5. Professional and support resources
6. Investment products and strategies
7. Strengths and key competitive advantages
8. Weaknesses
9. Investment philosophy
10. Investment process
11. Risk management
12. Use of technology
13. Compliance and trading
14. Historical performance
15. Client-service and consultant-relations programs
16. Fees
17. Current marketplace perception
You don't necessarily need to distinguish yourself from others in huge ways. For example, having a clearly defined succession plan can be a strong advantage for hedge fund managers and investment boutiques with relatively lean investment staffs.
Communicating the Right Story in a Consistent Fashion
Although the successful managers in 2011 will offer different products and investment strategies, they will share many of the traits listed in Exhibit 2:
Exhibit 2: Eight Common Measures of Success
1. Good long-term performance
2. Organizational stability
3. Low turnover among key employees
4. Controlled and steady asset growth
5. Products of interest
6. Cogent investment thesis
7. First-rate communication skills
8. Client satisfaction
Consultants tend to highly rate those investment managers who can convincingly demonstrate these common measures of success. Telling your story within this framework may be an effective approach to follow. Tell your story in a consistent fashion across all of your points of contact with the outside world--RFP responses, Website content, introductory presentation books, finals presentations, quarterly updates, etc.
In summary, the competitive landscape will create marketing and selling challenges for investment managers in 2011. The winners will go back to basics by remembering the importance of relationship building, distinguishing themselves from their strongest competitors, and communicating the right story in a consistent fashion.
Ron Gold
[email protected]
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