Asset managers who are relatively new to the sector are often caught in a Catch 22 situation.
They need to raise AuM so people can see they are successful. But they need to be successful to raise AuM – quite a paradox.
And many spend their whole career struggling with this conundrum – and failing to solve it.
But what they miss is the biggest single factor in being able to raise assets – and what separates the winners from the losers in this industry:
T R U S T
That’s the secret. This is what investors are looking for and need. Without building trust you have little hope of raising serious AuM.
Think about it. Before you give someone your money, you want to know that they will act in your best interests and have the ability to achieve high returns for you. And both those things boil down to trust. In short, you don’t give your money to someone you don’t trust.
And trust even outstrips performance as a reason to choose a manager. A survey of institutional investors and asset managers by the Chestnut Advisory Group found that investment performance alone does not drive asset flow. In fact, it found that the top five reasons for choosing a manager all came down to trust in one way or another.
But it’s a mistake to think that trust is something that must be built up slowly over years and years. It must be earnt, certainly, but you can build trust relatively quickly by giving your potential investors reasons to trust you.
So, think about all the things that build trust – honesty, integrity, capability, transparency, determination et al.
Then tell your prospective investors about all this through your marketing efforts. Make sure you are sending out communications and distributing content that underlines to people why they can trust you, rather than just trying to sell yourself by boasting about performance.
And by tracking your marketing, you will see that engagement and trust are inextricably linked. As people begin to know and trust you they interact more with your content, so become more engaged with your brand. And it’s a short step from there to investing with you.
And once you start acquiring trust it can grow very quickly – as people start to recommend you to others.
In short, marketing that shows you are safe pair of hands with other people’s money – and which is consistent and stretches across multiple channels – will give a massive boost to your AuM.