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New Managers
September 2014
THE MARKETING CHALLENGE: Investing in the investor
With year end allocation decisions taking precedence in the minds of advisors and managers both, it seems a good time to take a look at an interesting WealthManagement.com survey. Over 300 advisors throughout the industry were asked to share their views on hedge funds (Ten Charts That Explain What Advisors Think of Hedge Funds, by Megan Leonhardt, August 7, 2014). Alternative marketing devotes much time and communication on emphasizing the product's ability to generate performance and lower volatility for investors, hitting on the twin motivators of increasing return with lessening risk. While both factors are investment goals for the investor, the survey results, as seen in the chart below, indicate that neither are actually majority interests for advisors positioning new alternative products to their clients. It's the journey, not the destination that counts Joining performance and low volatility factors as minority persuaders is access to fund managers and new return streams. While performance and volatility are clearly in the mind of an advisor, they are not necessarily the areas that marketers should be hitting hardest when pleading their cause in investment meetings. The top four reasons advisors are compelled to consider alternative products in their client portfolios are correlation, an investment "difference" in portfolio construction, strategies that are unique or difficult to replicate in more traditional structures, and an overall strengthening of a portfolio's risk/return relationship. This suggests that advisors are more influenced by the manner, or the ‘how factor,' in which alternatives impact a portfolio, than in their pure performance or marquee manager. The following are some thoughts regarding these top four influencers and how to exploit them in alternatives marketing. Correlation (or the lack thereof) trumps ...................... To view our full article please login
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