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The formula for getting Investment Trust marketing right

Let’s face it 90% of retail investors have low financial acumen and don’t really understand the first thing about the complex world of investments. In fact, investments in general and financial jargon, scares the living day lights out of them. Marketing professionals aren’t always sensitive to this issue and make advertising and communication more complicated then it needs to be.

These marketing professionals that we speak of don’t have it easy either. They are often sandwiched between several investment trust managers, all wanting their fair share of the marketing budget, and the need to make an impact with strong single-minded advertising and communication that has the media weight to cut through the noise in the market.

Despite the challenges, there are a handful of marketing truths that can be applied to help develop advertising and communication that speaks directly to consumers in straightforward language they can understand.

Tip 1 – putting client needs first

It is so tempting to design advertising around the product benefits and characteristics, but the sad truth is that this only serves your internal clients (investment trust managers). Let’s face it, most of retail investors don’t understand what the terms ‘open-ended funds’ or ‘net asset value’ even mean.

Income seekers have three basic needs:

1. Dependable income that won’t run out before I do
2. Income that keeps pace with inflation, so I can maintain my lifestyle
3. No nasty surprises

Now of course the temptation is to activate around all these needs, but I would recommend resisting this urge and building your campaign around just one.

Baillie Gifford has done this rather well when advertising the Scottish American Investment Company (SAINTS), its flagship investment trust for income seekers. Its print ads focus on things that you can rely on over the long haul, like an aircraft engine that delivers you safely to your destination without crashing. This sentiment is captured by the phrase “The power to generate an income for the long haul”.

Tip 2 – select a flagship product

In a perfect world, marketeers would have enough money to support all the investment trust products in the company equally, with sufficient media weight to get them noticed by the end client and drive product uptake.

The reality is that marketing budgets are finite and to achieve ‘bang for buck’, hard decisions need to be made. I would suggest selecting a single flagship investment trust to put your focus behind. This product needs to be the clear frontrunner for delivering on the client need you want to focus on. For example, if you choose to focus on dependable income, then the investment trust with the longest track record of delivering dependable income is the obvious frontrunner.

Selecting a flagship product is difficult because all investment trust managers in your company will naturally want their ‘time in the sun’, but you must stay true to pursuing the most compelling strategy to achieve your company’s growth objectives.

In today’s competitive marketplace, you just don’t have the luxury of a ‘pray and spray’ approach to marketing. Brutal decisions need to be made about which funds will be supported, and then the full force of your limited marketing budget needs to be applied to get these flagship products noticed.

Tip 3 – educating clients

We understand that most investors don’t have the first clue about the world of investments and many perceive financial advice to be too expensive. I believe that every company has the responsibility to provide education on investment trusts. The tricky part is to deliver this education in a way that is unbiased and can be trusted by investors.  Let’s face it, how can clients trust a company to act in their best interests when their primary objective is to sell a product at the end of the day.

Fidelity International has tackled this challenge rather well with its learning module series titled An Introduction to Investment Trusts. The host of the series interviews independent financial experts, (not employed at Fidelity), to educate investors on investment trusts. What’s particularly clever about this series is that all the experts interviewed have nothing to gain from sharing their insights on investment trusts. This is what makes the series a credible and trustworthy source of information. The series never talks about Fidelity investment trusts specifically, referring to this type of investment in general terms so there is no hard sell at play to turn customers off.

In summary, there is a simple formula for getting investment trust products noticed by clients, but the battles fought by marketeers are often on the internal company front. My philosophy is ‘less is more’-  build your advertising and communication ruthlessly around a specific client need, address this need with your strongest flagship product, and put your full media weight behind driving a single-minded message to cut through the noise.