Unless your fund has incredible performance over the last 10 years with double digit growth, everyone agrees that in order to have a truly successful investment firm, you need to have more than just great performance. Excellent investor relation and client services is the better half of a real successful business.
When we talk about a successful investment firm in this post, we don’t mean just in terms of AuM, nor just traditional “fall-at-your-feet” client services, but successful in the sense of operating in the areas of positive digital sentiment, in a way that the mention of your fund triggers good feelings from an investor or potential investor. Yes, when client service evolves into customer experience – almost as good as walking into an Apple shop.
Only a small percentage of hedge funds, asset managers and wealth managers are able to navigate through the current service landscape of digital and social media, always-connected investors, and the “investors is always right” mentality unscathed. And those that raise the bar when it comes to serving their investors and exceeding not just their expectations, but the industry’s, are the businesses that rise to the top.
Unfortunately, there is no award that can be given out for this, but rather these firms will be anointed by investor loyalty, word of mouth, and of course, performance and AuM.
What is great Investor Relations?
This is probably impossible to define. There is no a right or a wrong way to service your investors, because the factors of what makes the service “good” or even “great” also depend heavily upon what specific things a particular investor may hold valuable or their expectations from what your competitors do.
Good investor relations is partly defined by the industry, but a large part of how your business defines it will determine what good investor relations and service means to you. After some research – both ad-hoc and structured, there are common basics to the basics of investor relations and service. These factors may seem simple, but actually implementing them in your business may take more strategy, time and effort to achieve a truly satisfying investor experience. Gvie it a go!
1. Don’t Make Your Investors Wait
Failure to respond properly to investors or potential investors can negatively impact a business’ bottom line for years to come. Only a quarter of investors said they would continue to seek out a fund manager or institution two years or longer after a bad service experience, while 39% said they would avoid managers for longer than two years. Women, B2B customers, and “Gen-Xers” are more likely to continue to avoid a business for a longer period of time.
More alarming are large and institutional investors, who had the most profound results, with 79% stating they’d avoid a fund or manager longer than two years after a poor service experience. A simple solution to avoid damaging lulls in service, make sure that the team members who will be working most closely with your investors and potential investors actually have the autonomy, authorization and training to offer solutions when issues arise.
Can investors easily access information about details of the fund and their investments? Will they be able to understand when and how their portfolio has been valued? If the answer to any of these or similar questions is a “no”, then you may be coming up short on the service front—and could be sacrificing investment as a result.
45% of potential investors will abandon a potential engagement if they cannot easily find an answer to their question.
When it comes to providing information, it’s always better to err on the side of caution. As simple and cheesy as it sounds, providing a clear frequently asked questions (FAQ) page – internally or is a start, but the most successful online companies take it further by offering guidance and direction along the way, and making sure not to hide any pertinent information that the customer may find useful.
In brick-and-mortar stores, things are handled slightly differently. In this case, good customer service hinges on signage and verbal communication. In the digital world it is all about transpaency – if there’s transparency throughout the transaction, you’ll minimize surprises on both ends.
3. Help Them Help You
In the age of e-commerce and digital consultancy that DO NOT specialise in finance, many companies make the mistake of treating invesors and potential investors like online shoppers and let them fend for themselves, relying on self-service resources.
Although it’s true that today’s investors are more independent, not everyone is equally tech-savvy, or always in the mood to put their self-sufficiency skills to work. Sometimes your investors don’t want to figure it out and want an answer by asking someone.
According to eConsultancy, a large majority of online-prospects (83%) require some degree of customer support while online.
Whether that’s speaking to someone in person or online, or over an email – most potential investors, at some point, prefer human interaction so they can get straight to the point or complete their transaction.
To avoid a sea of abandoned shopping carts, ensure you are meeting your customers’ needs with the support they expect. Live chat is best, as this has been proven to reduce abandonment rates. If live chat isn’t an option, be sure to at least provide an easy-access link for email questions and a 24/7 toll-free number posted prominently on every page of your site.
4. Build Trust and They Will Come (Back)
If your business is answering a phone by the first ring, is straight forward with all pertinent fund information, and is giving investors a personalized experience when they need it, then congratulations, you are building much-needed trust. This is the final piece of the puzzle, but it’s the most important. Your products or services will attract them initially, maybe even bring them back a second time, but what consistently entices investors to return is trust that they’re going to have a good, barrier-less investor experience.
If you can provide the investors what they’re looking for (and sometimes what they are not), when they need and expect it, then that trust built between your company and the customer will evolve into invaluable customer loyalty.
In summary, the most important of all is to is recognise that good investor relations and service encompasses any interaction, online or off, that an investor or potential investor may have with your company, and it includes the entire experience, from initial contact to final investment and beyond.
Be sure to do everything in your power to keep your investors informed, on the move, and—above all—happy. If your company is responsive and friendly, and provides timely, relevant information when the investor needs it, you’ll build a reputation for consistently providing good service and all the benefits that come with that.