5 Examples of the Matthew Effect In Asset Management & Fund Marketing
It’s a competitive world out there where it can feel impossible ‘to make it’ without a leg-up.
This disparity between those with initial privilege (be it wealth, fame, or education) and those without is extremely prevalent today through a theory known as the Matthew Effect, effectively the ‘rich get richer while the poor get poorer’, with the mega-billionaire chokehold we see over politics and culture on the TV and social media feeds being a clear picture of that gulf widening.
In an industry where the core purpose is money – banking, asset management, hedge funds and alternative investment – it feels unavoidable that those with established bulky wallets will only fill up further. This can be a hard truth for the boutiques and small family businesses to be found, let alone increase their assets under management.
Here we’ll explore fund examples of this principle in action, while also shedding light on how digital marketing might level the playing field more than you think.
Ultimately, Big Funds Attract Bigger Inflows
We talk a lot about the inability to “out-BlackRock Blackrock”. After all, it’s the world’s largest asset manager with famed investment banker CEO Larry Fink at the helm. Likewise Fidelity, Schroders and Vanguard benefit from being reputable, largely due to their sheer size that helps them build on their historic reputations as not just big names in the business, but household ones.
When brand recognition hits the right notes, this means investors can automatically assume that they are trustworthy. There’s a narrative along the lines of “they’re looking after billions of real people’s money, so they’re surely the best to look after mine” to help large banks get larger. Meanwhile, newer fund managers can exist in their shadows, even with strong performances that may not be enough to gain public attention or to win mandates.
Persistent Performance Wins May Not Get Seen
On the subject, why is it that two completely different funds that deliver similar returns can get either star treatment or none at all? That’s down to how well-known that fund’s performance is and the coverage that it has gotten via traditional asset management industry publications, as well as certain platforms or consultants singling them out for praise online or via word-of-mouth.
Of course all of this recognition will have taken even the behemoth managers years, even decades, of marketing graft to get to. But it does mean that they’re in a powerful position now to experiment while lesser known funds remain invisible while being wholly consistent in performance. “Success breeds success”, as they say, and it’s a cycle tough to break into.
They Have More Marketing Firepower
With more AuM comes greater budgets for the marketing team. A stronger headcount also equals more creative juice for campaigns, and more chances to try and (potentially) fail them without making too much of a dent. Established funds have a workforce able to retain a full-time, 24/7 digital presence on every channel available – multi-jurisdictional websites, email newsletters, shiny portals, LinkedIn, and even TikTok – and it’s not uncommon to see highly-produced television spots or interactive adverts on webpages or YouTube for the largest players these days, too.
This is how the brand gets reinforced organically everywhere in front of allocators, far more than smaller managers that strive their very best to stay active across multiple effective platforms linked to a CRM. There’s less room for error, more pennies to count, and it makes gaining visibility feel achievable only through a viral moment.
It’s Easier to Gain Oscar-Winning Status
After a fund manager gets interviews and features in high-level sector publications such as the Financial Times or Citywire, that credibility becomes a rolling stone toward winning industry awards time and again, gaining (virtual) rosettes that drive up rapport with prospects.
Awards in any industry, including the Grammys, do often favour go-to picks and overlook the up-and-comers. That’s just the way it is, but it’s still very possible for starting firms to get noticed if they push their own brilliant culture via sites such as G2, or client success stories with reputable PR firms. It takes a little extra effort, but these channels can elevate personal wins beyond the ‘Our Company’ content on a fund website.
Personalisation Paves A New Path
Despite technological uptake being notoriously slow in the industry (no matter at what level), this poses an advantage for the digitally-savvy when it comes to CRM and automation usage. With a specialised solution that can pinpoint which prospects are engaging with a fund, from where, and which sort of investment they’re interested in, even a nascent manager can achieve far more outreach and brand presence without a hundred marketing professionals.
AI-powered data processing can segment engagement levels in a CRM through a LeadDeck setup, and provide stripped-back teams with a reporting suite that’s highly tuned to map their investor base’s preferences. It helps run targeted, tailored campaigns to the investors that matter, and that’s the knack for any fund to reverse the Matthew Effect through marketing traditionally reserved for the lions in the jungle.
The marketing technology space is a hefty beast with a range of options. But the right tools, data, and integrations all build up a manager’s capability to continuously get the brand noticed and thrive in a space dominated by billion dollar skyscrapers. ProFundCom’s platform is specific to the asset and wealth management world, supporting funds with automated intelligence that can amplify even the smallest voices – talk to us to learn more!
