Fund Marketing: A Millennial’s Perspective

FUND MARKETING - A MILLENNIAL’S PERSPECTIVE2

IN THIS WHITE PAPER

Robo-Advisors

Advertising

Infographics

Sarah MardineyDigital Engagement Intern

For fund managers working in

a digital age, advertising is

changing drastically“ Wikipedia characterizes the “Millennial” generation as including

individuals born between the early 1980s, continuing until the early

2000s. Millennials are a population of young men and women raised

alongside the internet, developing and maturing with the technology.

Millennials are digitally-native, narcissistic, and anxiety-ridden.

I should know; I am one.

I was born in 1994, and cannot remember a time

when there was not a computer in my household.

On September 11th 2001, I was only in the second

grade. I remember my mom purchasing her Þrst

cell phone. I remember making my Þrst MySpace

page (without parental permission) in 2006. I can

learn the ins and outs of any social media site in

minutes. IÕve been taking selÞes for years. I know

very little about Þnancial data.

Introduction Introduction

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Much of the Þnancial data I encounter is confusing, dense, and maddeningly

boring. (We millennials are noted for our shortened attention spans, after

all.) When it comes to understanding information dealing with loans,

investments, or credit, it helps to have the data visualized. Infographics are

not only eye-catching and aesthetically pleasing, but they render

information in a way which is understandable; perfect for those of us who

were raised doing much of our learning using the internet.

Infographics can and should be utilized by asset managers, especially on

social media. Clients of all ages can appreciate how infographics alleviate

the task of understanding facts and Þgures. When scrolling down oneÕs

Facebook or Twitter feed, for example, an individual is more likely to pay

attention to and absorb information displayed on a colorful infographic with

descriptive pictures as opposed to long paragraphs of data. Social media

sites like Twitter, Instagram and Facebook, after all, are platforms designed

with the affordance of easily displaying and sharing pictures. Asset

managers are encouraged to use these affordances to their advantage.

Infographics and Financial Data Infographics and Financial Data

Digital Marketing at Asset Management Firms Digital Marketing at Asset Management Firms INFOGRAPHIC

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Social Media and Asset Managers Social Media and Asset Managers

It is no secret that millennials are the kings and queens of

social media. According to a 2013 study by Pew Research

Center, 90% of internet users aged 18-29 use some form of

social networking. Asset managers who do not have a social

media presence, therefore, are ignoring a huge population

of possible clientele. At the bare minimum, a Þrm should

have one (or all) of the following: a LinkedIn Company Page,

Twitter account(s), and possibly a Facebook company page.

The more social media sites that are utilized by a Þrm, the

more digital engagement you will be likely to receive.

Marketing to a younger demographic is essential, as the

millennial generation begins to enter the work force. As a

millennial, I can assure you, social media is an integral part

to how my generation consumes news, advertising, and how

we provide (valuable) feedback to companies.

To elaborate: I stay up to date on current events through

CNN’s mobile app, Facebook’s trending stories sidebar, or

Vice News’ homepage. I communicate with peers about

assignments through various messenger apps and sites. I am

notiÞed about what my favorite musicians and politicians

are up to through their social media proÞles. Much of my

shopping and banking is done online.

It is crucial, therefore, that asset managers maintain an

active and organized online presence (whether it be a web

page, social media site, or both). Creating a Facebook,

LinkedIn, or Twitter account for your Þrm is a great start.

But, if you want to draw in clients from a speciÞcally

younger demographic, posting content (such as

infographics) to your social media sties will be a great help.

By doing this, you will have not only better informed

clientele, but demonstrate that you value their feedback

through active engagement. In addition, social media is

free marketing! Maintaining a social media presence can

help you acquire new, younger clients.

On the next page I will provide examples of Þrms and

Þnancial companies who are using social media

infographics to their advantage.

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Schroders Investment Management tweets infographics on a regular

basis that are crisp, thematic, and most importantly, instructive.

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JP Morgan Chase & Co. should be praised for the variety of infographics they utilize. While

there is not an abundance of infographics on their social media sites, the ones JP Morgan use

are informative and display a range of stylistic elements including variations in color, images,

and the amount of data displayed. In addition, they use these images to market their hashtags.

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Wells Fargo Asset Management’s infographics are mostly graphs and charts. While these

infographics are good at visualizing data, they still take time to analyze and understand. However,

the graphs quickly convey general trends. Wells Fargo uses their graphs to “advertise” their posts

which discuss the Þgures displayed.

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Citi’s infographics lack a presence on Facebook, but have a pretty good selection on Twitter. As

you can see, the infographics do not convey a lot of information, but have a simple, streamlined

design. This, along with the short captions help to make the info clearly interpretable. These

infographics lack artistic sophistication, yet succeed in transferring facts and Þgures.

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Bank of America Merrill Lynch does not have an abundance of infographics on their Twitter –

instead, they have many sophisticated and informative videos. However, every once in a while,

they will post an infographic which excels in creativity. Unlike some of the other examples

we’ve looked at, the design for their videos and infographics are more artistically driven

(color-coding, symbolic visualizations).

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State Street does not utilize graphics so much for the displaying of information, but instead

pair short fact phrases with graphic design. By tweeting these images, they succeed in

disrupting the monotony of their Twitter feed. However, State Street’s images are not quickly

digestible. Some examples are provided below. State Street also displays infographics once in a

while in the form of line graphs, which are more understandable.

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T. Rowe Price is one of the more active producers of infographics on their Twitter (not so

much on their Facebook). T. Rowe Price produces a simplistic infographic about once a week.

Their infographics typically display one statistic, and are quick and easy to understand. A great

marketing strategy they use is that their infographics prompt viewers to visit their website

and read blog posts.

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Close Brothers Asset Management feature great infographics not only on their Twitter page,

but also on their LinkedIn. LinkedIn is a great resource for asset managers who want to market

their brand and network with clients, as well as share infographics like the ones below.

LinkedIn also provides a more personal experience on a platform which encourages new

connections.

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Fund Managers & Advertising Fund Managers & Advertising

Print advertising or word-of-mouth is simply not going to

be effective in maintaining client relationships in today’s

online world. Effective advertisements can attract clients, as

well as develop a brand image which will build lasting client

relationships. Marketing is a way for fund managers to

translate the goals and values of their Þrm in a visual,

tangible way. “Many people believe that marketing is just

about advertising or sales. However, marketing is

everything a company does to acquire customers and

maintain a relationship with them.”

For fund managers, a huge part of marketing is

generating advertisements. These ads can take a variety

of forms; there are print ads, billboard ads, ads in the

subway, Twitter ads, pop-up and sidebar ads, and many,

many more.

As a result of this advertisement inßux, third party

marketing services are becoming more lucrative, as they

provide a “consulting service to hedge fund managers who

need the expertise of seasoned marketing professionals.

[They] employ experienced investment marketing and

sales experts, and raise assets for hedge funds.”

Advertising is obviously essential in today’s world for any

company that wishes to make their name recognizable and

their business proÞtable; luckily, there are a number of

ways for hedge funds to develop ad campaigns, hone in on

a brand image, and start recruiting new clients.

However, according to an analysis by Hoovers.com, larger

funds are not using their larger marketing budgets to their

advantage. “An analysis of the top 30 institutional asset

managers (as deÞned by Hoovers.com) conÞrmedÉ larger

Þrms were no more successful at differentiating

themselves than their smaller brethren.” What does this

mean for these larger Þrms? One goal of advertising and

branding is to set a company apart from competitors. In

order to do this, marketing content needs to be original

and resonate with viewers. Clients can and should be able

to separate the men from the boys, so to speak, through

the sophistication of a company’s advertisements.

Next we will be taking a look at how well fund managers

(both large and small) are setting themselves apart from

their competition.

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Advertising Budgets Advertising Budgets

Michael Pantanella is quoted in an article by Forbes on fund

managers and advertising, in which he says, “Advertising is

now another tool for hedge funds to get their message out.

What’s very important is that the hedge funds who seek to

beneÞt from advertising have very clear and powerful

messages that are also well targeted.” Well-targeted

advertisements are very important, and some companies

are willing to shell out the big bucks in order to get them.

For example, “Advertising spending by Invesco Perpetual

tripled last year. The UK fund house increased its

advertising spend to £6.2m, making it the third-biggest

advertiser in the UK funds market behind Old Mutual

Global Investors (OMGI) and Fidelity Worldwide

Investment, the biggest spender. OMGI also more than

doubled its advertising spend, to almost £9m in 2014.

Clearly, the marketing departments of companies like

Invesco and OGMI are willing to spend big. While a lot of

the larger fund management Þrms can afford paid

advertisements, it is certainly worth mentioning the Þrms

using social media to promote their brands, free of charge.

Vanguard Investments, for example, were one of the Þrst

to start harnessing the power of social media’s advertising

affordances by “hiring a head of social communications

eight years ago, when other asset managers regarded this

position as a subsidiary of other communications roles.”

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Video Advertising Video Advertising

YouTube is a popular entertainment and information medium among many; especially the Millennial generation. I, for one,

use YouTube to catch up on political debates and commentary programs, to Þnd new music and music videos released by my

favorite artists, to watch the latest movie trailers, to research and listen to user testimonies before making a product

purchase – the list goes on and on.

ÒAsset managers canÕt push individual products as obviously as other brands can because they are bound by regulations

around product promotion. But they can build more general brand recognition using informative, topical and educational

videos.Ó Anyone who has ever used YouTube knows how the platform features ads; there are banners which pop-up on the

bottom of videos, short introductory ad videos, as well as banners at the top of the webpage.

This Advicent (Þnancial advisor) ad appeared before a

video played on YouTube. As you can see, YouTube gives

the option of skipping the ad after 5 seconds.

These ads appear under the search bar on YouTube.

YouTubeÕs platform always lets you know when

youÕre being shown an advertisement.

This very simple rebranding message

for Columbia Threadneedle

Investment appeared on the sidebar of

the YouTube search page

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Hedge funds and fund managers tend to utilize the YouTube advertising methods of pop-ups and banners much less

frequently than they utilize the free video-producing capabilities of the platform. By editing and producing original content

on YouTube, funds are able to bypass advertising fees, while still developing a brand image online. It is important to note that

the following YouTube examples are not examples of YouTube’s ad platform. Instead, these examples are simply good use of

video marketing.

Coronation’s content videos on YouTube have a unifying theme translated

through their slogan: “Trust is earned.” The videos posted by Coronation

appear to have a high production budget, and are intended to evoke

feelings of nostalgia in viewers, and earn legitimacy through small

disclaimers which read: “Based on a true story.” One thing about YouTube is

the platform allows for fund managers to “recycle” old ads, so to speak, by

uploading old television commercials as content.

Perhaps my favorite Coronation advertisement is this video, in which

Coronation uses Vincent Van Gogh as an example of a historical figure

who was a “missed investment opportunity” (as he only sold one painting

during his short lifetime). This ad, which features great special effects and

a Van Gogh lookalike, functions to associate the investment management

firm Coronation with something as high-culture as Van Gogh’s art. This

comparison is supported by some very cool camera effects in which real-

life scenes morph into Van Gogh’s most famous paintings. In this sense,

the advertising is original and effective. Coronation’s production team

deserves props, as all of the firms’ videos are high quality and nicely filmed.

Coronation Fund Managers

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Old Mutual’s YouTube channel content is not recycled TV

advertisements like Coronation’s; instead, Old Mutual uses

YouTube as a way to provide to clients a history of the company’s

“humble beginnings.” There is an emphasis in Old Mutual’s videos

on themes of family, children, and nostalgia for the past. These

themes I believe are not as effective in attracting new customers,

however, will strengthen loyalty and forge a lasting relationship

among existing clientele

One thing that makes Old Mutual’s advertising stand out from

competition is that all of the company’s existing advertisements

are provided on the company’s website. In this way, Old Mutual is making it easy for those who want to know more about the

company’s brand image – that person does not have to scour the internet for ads. Instead, their advertising accomplishments

are displayed in one place.

Although most of Old Mutual’s advertisements are in video form, there

are some print advertisements, although these print ads are not nearly as

interesting nor resonate with viewers in the same way the videos do. For

example, the following print ad continues the theme of families, children

and nostalgia, however, it lacks the aesthetic and design sophistication of

the video ads.

Old Mutual

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Fidelity’s use of instructional videos on

YouTube is notable. If an individual visits

Fidelity’s YouTube page, they will see an

abundance of videos which offer mini-

lessons in finance. These videos describe,

for example, what an ETF is, or what the

basics of roll-over IRAs are. Once again,

while this is not technically YouTube

advertising (the videos were uploaded for

free and are not promoted by YouTube), it

is an ingenious form of brand marketing.

The reason these “Fidelity Learning

Center” videos are so great is that the

company is demonstrating to their clients

that they care about their financial literacy. By helping clients clearly understand concepts like fixed-income ETFs, they are

demonstrating they want clients to be informed about their options and decision making in the financial sector. These videos

are successful because they will attract not only Fidelity customers, but anyone who is perusing YouTube searching for

clarification on financial terminology.

Fidelity

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Social Media Advertising

One major affordance of social media platforms such as Facebook or Twitter are the

interactive capabilities. A great way to “advertise” on social media is to respond to

comments and interact with customers. This not only reinforces existing customer

relationships, but shows visitors site or that the company is actively listening to

customer critique and praise, and genuinely cares about customer feedback. Check

out the image on the right.

Another method of advertising on social media is to be “promoted” by a site such

as Twitter, which essentially means a company pays Twitter to encourage users

to follow or retweet the company. You can see an example below of

Fidelity using this feature. It should be noted however, that this feature

is probably only going to be utilized by fund managers with larger

marketing budgets. While I am not particularly fond of the promoted

Tweets feature as a Twitter user, I do think if a company can afford it,

they should use it to their advantage. Even if it does not succeed in

getting the company a lot of followers, they are still encouraging brand

recognition and familiarity among users of these social media sites;

namely, millennials.

Positive feedback in Vanguard’s Facebook comments.

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Robo-Advisors

Every passing year marks the introduction of a technological advancement

which affords some new form of progressive automation. Members of the

millennial generation, like myself, are no strangers to the integration of robotic

technology in daily life. I remember delighting in the introduction of self-

checkout machines at the grocery store as a young kid, begging my grandmother

to use the machines. Unfortunately, my old-fashioned grandmother never let me

use the self-checkout, as she did not trust the technology to get the job done.

New robotic technology has always

made older generations understandably

uneasy, especially since pop culture

tends not to portray robots in the best

light (who remembers The Stepford

Wives or I, Robot?) Often, robotic

technology is suspected of being too

generalized, and unable to tailor tasks

to an individual’s specific needs.

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Robots: They’re No Big Deal

Millennials, on the other hand, are far more open to and accepting of

the idea of robotic automation, simply because robotic technology,

in some form, has existed for most of our lives.It was only four

years ago, after all, that the world was introduced to Siri, Apple’s

intelligent computer program/personal assistant robot, thrusting

robots into mainstream, every day life.

Siri is by no means the first or only robot introduced in the past

decade. Companies like Toyota, Lexus, Ford and BMW have

developed cars which feature parallel parking automation, allowing

a robot to take over the vehicle and perform more precise parking. To present a more controversial example of robotic

technology introduced within the last 10 years, drone warfare has opened a worldwide debate in regards to the morality of

certain robotic technologies. The future of robotics is approaching quickly; Google is currently developing self-driving cars

with the goal of one day eliminating traffic and car accidents, all together.

Robotic technology, therefore, has saturated many institutions of every day Western life. As technology in the robotics field

improves rapidly, the coming years will no doubt introduce an abundance of new robotic technologies, which the millennial

generation will adapt to and appropriate in a variety of ways.

It comes as no surprise, then, that robotic technology has become extremely popular, as well as useful in the financial

industry. Robo-advisors have become prevalent in the last few years, as robo-advisor programmes “allow consumers to go

online, answer some questions, and receive financial help without having to pay for individually-tailored suggestions.”

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In the modern-day world of Seamless and Amazon Prime, it is no surprise that individuals would want to receive personalized

assistance, free from paperwork or even basic human interaction.

As the millennial generation gradually enters the workforce and accrues wealth, “asset managers and banks [are] looking for

ways to deliver low cost, automated investment strategies in a way which fits with customers’ increasingly digital mindset.”

Seeing as no generation is more digitally-minded than the millennial generation, I thought it would be appropriate to conduct

some research on FinTech’s hottest trend, and offer up my “millennial perspective.”

Betterment scores huge points in terms of ease of access and design. On the

site’s homepage, users are asked to “Start your investment plan” by entering

your age, retirement status, and annual income.

After entering this preliminary info, the user is directed to set goals, which are

recommended automatically by the program based on age and income. My

favorite part about this website’s robo-advice

platform is its design. It is modern, streamlined,

and uncluttered, with small pie charts to easily

display plan

The website breaks down the investment into 3 “priorities,” based on your age and income.

Since my personal profile is 21 years old, making less than 50k a year, this robo-advisor

deems my number one priority to be having a safety net, followed by planning for retirement,

and finally, general investing.

Robo-advisor Platforms

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Charles Schwab Intelligent Portfolios asks users to begin their investment

process by taking a short, diagnostic quiz. The portfolio prompts the

user to answer “12 straightforward questions,” and takes no more than 5

minutes to complete. I like the fact that this quiz is reminiscent of creating

a social media or a dating profile. The quiz really gives a feeling like Charles

Schwab’s robo-advisor is tailoring the profile to the user’s specific needs,

despite not being human.

Some examples of diagnostic questions are shown right. As you can see,

the questions are specifically asking about the user’s financial history and

goals in order to offer the best plan possible.

Another feature I like about the Intelligent Portfolios platform are the

automated recommendations the questionnaire provided. For example,

after asking my age, the program automatically recommended I plan on

saving for retirement for a longer time period, and prompted me to adjust

the settings accordingly. (Turns out I’ll be saving for retirement until I’m

90… thanks baby boomers!)

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WiseBanyan – As a millennial, I feel I would be remiss if I did not mention a robo-advisor featuring the one

quality praised by our generation more than anything else: this robo-advisor is free! WiseBanyan markets itself

as “the world’s first free financial advisor.” Upon entering the site, you’re immediately prompted to enter an email

address so the site can send you an invitation.

Just like Charles Schwab, WiseBanyan has the user fill out a short questionnaire so they can build a personal

finance portfolio.

WiseBanyan actually takes Charles Schwab’s method one step further, by

offering an explanation as to why it is important for the firm to ask these

diagnostic questions. These short explanations are helpful formillennials

who may not be familiar with wealth management or financial terminology,

to understand why a firm would need to know their financial history and

goals. A sample of some of the types of questions are displayed below.

Notice also, how the site features a modern and chic design, easy to read

and easy to navigate.

After the user completes the short quiz, they are given their results in the form of nicely

designed infographics. The user is given a “risk score,” and an infographic displaying

recommended percentages of stocks and bonds.

I like that WiseBanyan offers concrete information which has been organized and easy to

understand through data visualization. Unlike Betterment, which simply offered priorities,

it feels more comfortable to see my financial info quantified in the form of a “risk score.”

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WealthFront features a similar platform to both Charles Schwab and WiseBanyan. Users are prompted to

answer a questions in a short diagnostic quiz upon entering the site, which asks many of the same questions as

the other sites (age, financial goals, net worth, etc.) However, one feature that sets WealthFront apart which I

like, is that after choosing a response from the multiple choice question, a short response pops up to provide the

user with more information on the answer they’ve given. Not only are these short responses encouraging, they

are fantastic marketing. Check out the example below:

After researching so many of these robo-advisors, a lot of the sites I came across began to look the same. A

lot have similar layouts, similar risk scores, and diagnostic questions that are so similar they are almost word-

for-word. This is why, for millennials especially, it is important for a site to have a feature which allows the

firm to stand out. For WealthFront, their defining feature is their results page. WealthFront offers a colorful,

eye-catching infographic to display the risk score, and investment recommendations. This infographic is easily

digestible, and offers a splash of color to the monochromatic aesthetic most financial websites feature.

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Nutmeg Online Investment Management differs from the previous

examples in small, yet significant ways. Firstly, the website’s font is

playful, and there’s a lot more color on this site than others that I’ve

looked at. Color is always a plus for breaking up monotony and making

the question-answering process less dull.

Another aspect that made this site stand out are the options provided for the user from the get-go: the visitor decides

whether they’d like a “general,” “ISA,” or “pension” account, then offers the option of making a goal with the investment

account.

Hands down, my favorite part about Nutmeg’s robo-advising site is

that the template is highly reminiscent of a social media profile. The

site offers options of editing your “Nutmeg Pot,” complete with a goal,

name, and target, positioned at the top-left of the page. It reminded me

immediately of creating a username and short description that would be

displayed on the top/left of social media profiles like Twitter, LinkedIn, or

Instagram. The template is not only easy to read and edit, but the setup

is logical, with name of the users’ “Nutmeg Pot” and target at the top of

the page like a personalized header.

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Upon scrolling down is where the user gets to set more specific timeframes,

contributions, and risk level.

After entering the preliminary info, Nutmeg provides the user with a beautifully

designed infographic displaying their projected portfolio. The site offers detailed

descriptions of the projection, portfolio, and investments. In my opinion, Nutmeg

is the most aesthetically pleasing and coherently designed. The fact that this

financial profile is so highly reminiscent of a social media profile makes it

incredibly translatable and acceptable by a millennial audience. What really sets

Nutmeg’s robo-advisor service apart, for me, is the customization element that

other advisors lacked. Getting to name your own “Nutmeg Pot” and the ease with

which you can edit your timeframe, etc. makes Nutmeg the #1 robo-advisor on my

list.

ABOUT Kurtosys

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