How to Grow AuM in 2019: An Interview with Donna DiMaria and Sandra Powers of the 3PM Association

By Emilie Totten

The shift from active to passive investing continues to drive significant change for sales and marketing into the new year. Very recently, I had the pleasure of interviewing Sandra Powers-Murphy and Donna DiMaria to discuss what marketers can do to grow AUM in this very challenging environment.

I first became acquainted with both women through the 3rd Party Marketers (3PM) Association, where Powers serves as President and DiMaria as Chairwoman.  In addition to 3PM, Powers and DiMaria both act as CEO and CCO of their own third-party marketing firms, Ark Global and Tessera Capital Partners, respectively. Their firms provide outsourced strategic sales and marketing services to institutional asset managers who lack adequate internal resources.

According to DiMaria, operational efficiency in sales and marketing has become imperative, and asset managers are taking note. “Firms are looking to be more efficient, doing more with less resources both in terms of bodies and budget. And that is leading to consolidation, outsourcing, and automation. The status quo isn’t working anymore so, in a way, the market is recreating itself,” she said.

Outsourcing and Consolidation

In response to cost containment pressures in the market, many investment managers are turning to third-party marketing firms to outsource sales and marketing functions. “We’ve seen a lot of prominent investment managers that have just shuttered in the past couple of years because it’s become difficult to sustain the business as a whole. As a result, we’re seeing firm and resource consolidation across the industry at both small and large firms. In the past, managers were hiring to expand their reach, but now we’re seeing consolidation and more outsourcing,” said Powers. Firms are looking to outsourced partners who can assist with recommending and implementing new technologies.

Fee pressure isn’t just hitting investment managers, it’s also forcing change among RIA and wealth management platforms. “They’re rationalizing the firms that they have managing assets for them, both to take advantage of outsourcing platform opportunities and to reduce the time and expense of manager due diligence in-house. For example, in the past, they might have offered ten small cap managers, but now they’re cutting that list down to five. Firms that are under-performing, heavy on fees, or struggling to garner assets on their platform will get cut. It’s definitely a phenomenon of trying to use resources more efficiently, and it’s happening across the industry as a whole,” DiMaria said.

Digital Strategies – Social Media, Website, Video

Communication in this industry is extremely important, and there has been a fundamental transition over the last five years. Before the digital boom, sales and marketing happened in-person or on the phone, but that has changed. “It’s incredibly difficult to get anybody on the phone today, and people just don’t return voicemails. They want to get your pitch book by email and log into the databases to see your information. It’s a very big shift for salespeople who are used to selling the traditional way,” said DiMaria.

This new way of selling puts pressure on marketing to engage audiences through digital channels. Asset managers who haven’t quite made the shift are now almost required to make the push toward digital and data-driven marketing. But firms have been slow to adopt, due to the complexity around rules and compliance. Social media, for example, has seen very slow adoption in the industry. In Powers’ latest book, Road to AUM: Driving Assets Under Management through Effective Marketing and Sales, published by Noble Ark Ventures (a firm Powers launched in 2018 to specifically address marketing challenges on behalf of firms large and small) asset managers reported social media as a low priority initiative. “I interviewed well over 30 institutional research professionals,” said Powers. “Not one said social media or social networking was a component they looked at, partly due to regulation. Managers are very limited in terms of the content they can put out on social media, so some asset managers have been slow to adopt.”

Social media may not be a critical priority this year, but a well-designed website is. According to Powers and DiMaria, the website should be the number one priority, as it’s often the firm’s first impression. “Websites are really important because you never get a second chance to make a first impression. People go to the website and they’re going to see your presence. Are you transparent? Are you providing the information that they need? Is it something that could be interesting to their clients? We’ve seen a lot of managers whose websites have little to no information on them. They think just because they have a site they can check the box.  Websites are an important source of information, they have to be informative and, when possible, provide information evaluators may not find elsewhere. It will help decision makers remember you and keep coming back for the information,” said DiMaria.

The cost of implementation has held many firms back from investing in their online presence, but time is running out on that excuse. “All firms need a basic web presence. Having a good quality, consistent site experience is important, but managers don’t need to overspend. This is a place where managers can be thoughtful and make sure it represents their culture and is consistent with the stories they’re telling in their collateral and through other mediums, as well as in conversations,” said Powers.

Along with the website, both women agree that video can be an excellent place to allocate budget this year, as long as it is carefully implemented. Video presents an efficient opportunity for firms to drive home a value proposition very quickly, to target audiences. The key is that these videos need to be short, compelling, and extremely well thought out. Powers stressed the importance of using bite-sized content, as to not lose the audience’s attention. “There is so much content out there, and most of it is too long. Just as 85% of books are never read cover-to-cover, actual video viewership is limited, particularly the longer the video gets. The reality is, no one wants to click a button and sit there and watch a video which may only be five minutes but feels like 30. An interesting trend that I think we’ll see a lot more of is using a series of short video clips. Managers can use a more intimate medium like video, but create shorter one-minute segments. For example, a portfolio manager giving one-minute direct feedback on specific aspects of their market segment or strategy, a portfolio team touring a recent portfolio holding or visiting a location where the strategy is actively allocating,” she said.

Clear, Concise, and Consistent Messaging

With the pressure on fees and dynamic market movements globally, a clear value proposition is crucial for differentiation. And it can’t be about the numbers. “Instead of talking about what asset class we’re in, it’s about building the case for how you’re going to fit in the portfolio. It’s about telling your story. The best way to do this is to provide that bite-size level of information online, versus trying to deliver that in a phone message that’s not going to be answered, or a long commentary that’s not going to be read, or a pitch book where it’s going to be buried in the highlights for next quarter section,” said Powers.

While communicating online is a growing trend, traditional marketing communications like fact sheets, pitchbooks, and commentaries, aren’t going away. The key is making sure messaging is consistent across digital and traditional channels. DiMaria said, “Discrepancies between sales pitches, sales collateral, database responses, and website messaging is not good for firms. The underlying data has to be consistently implemented so that messaging is the same across the spectrum. The key is to ensure your messaging makes an impact.  A lot of managers think they have their messaging down, but in most cases the message doesn’t really identify the value they provide to investors. Saying, ‘Our differentiator is performance or our research process’, is basically saying nothing.”

Getting the messaging right is going to take collaboration across the enterprise, getting higher-level subject matter experts to come together to agree on the strategic positioning. Then, those same stakeholders must get involved in the communications in a way they are most comfortable with, whether that’s a blog post, video, a podcast, a presentation or a combination of all of these touch points.

Content Strategy & Automation

Once a firm has agreed on it’s strategic position, it’s crucial to communicate that message efficiently through the right mediums. Traditional sales collateral materials are still a key part of the mix, but the execution has changed. DiMaria explained, “All of these materials must be easily accessible and provide the information that people want to see. Investors shouldn’t have to dig through twelve pages of commentary to see how the strategy performed, what outperformed, what under-performed. They need a quick and easy way to see this information.”

The pitchbook has always had a starring support role in the sales process, but it’s becoming the main act. DiMaria said, “You need to make sure all the salient information is in there for an evaluator when they’re using that pitch book as their main source to determine whether or not to take a conference call or to move forward with the strategy. So pitch books are becoming very pivotal, in my opinion, in determining whether or not somebody’s going to look at you further.”

Again, it’s critical to ensure that the information in the pitchbook is consistent with what appears across all marketing and sales channels. That means there can’t be any errors. “Automation is very beneficial to content production, because without it, we see many errors. Someone will forget to update the quarter, or the footnote, or to swap to a representative account versus the general composite. These errors lead to inefficiencies, so this makes a great case for automation. The more efficient your process, the broader and more efficiently you can reach. The market will begin to view the firm as an effective, timely and accurate resource for investment management intelligence. And that is what creates opportunities for growth,” said Powers.

Automation also helps drive seamless inter-connectivity between marketing mediums. Firms can no longer look at the factsheet, website, or pitchbook in isolation, so updates to messaging or data in one medium must carry through to the rest of the firm’s marketing outlets. Automation is undoubtedly the most efficient way to accomplish his goal. With all of the changes and challenges facing investment managers as we enter 2019, those who embrace automation and technology will have a critical edge in the months and years ahead.

To learn more about the 3rd Party Marketers (3PM) Association, visit their website.

Here are some related resources that might interest you:

From the Blog: 5 Ways to Innovate your Fund Marketing in 2015
From the Blog:Asset Managers Using More Than LinkedIn and Twitter
From the Blog:3 keys to improving your quarter-end process

Emilie Totten

Emilie is Head of Marketing at Synthesis. Emilie holds a Bachelor in Advertising from the University of Illinois at Urbana-Champaign, and has 15 years of integrated marketing experience. She lives in the Chicago area with her husband, two adorable kids and two crazy cats. She fanatically roots for the Chicago Bears, despite their terrible record. Go Bears!