The financial services sector is an important client base of ours and many of these clients are in no doubt that an overstocked market underpins most major challenges that sales, marketing and portfolio managers face in getting their strategies seen. We talked to five global fund selectors who gave us their pointers on how asset managers can get onto their buy and watch lists.

1. The pitch

When considering a strategy, the two main attributes selectors want to hear a portfolio manager articulating are the philosophy and the process.

“The [philosophy] ought to be sharp and succinct; the [process] should take up the lion’s share of the pitch”

Regarding the articulation of philosophy, most sales professionals and PMs struggle to encapsulate a selling point. They often revert to top-bottom or bottom-up lingo, spending precious time touting the merits of the fund’s asset class. This is a waste. The fund selector, whose job is to select from within the asset class, is already bored.

2. “Solutions, please, NOT products”

Asset managers can benefit from shifting the discussion away from talking about pure product towards a more solution-oriented approach. For example, highlighting strategies as inflation-protection solutions, capital preservation products or volatility managed solutions. If you are choosing a particular outcome for an investor, it makes it easier for the selector to select.

3. Go global

Our fund selector panel have encountered reticence about registering funds in multiple markets without inflow guarantees. However, they warn this attitude could lead to a significant loss of business.

“Yes, registering in Hong Kong is costly but, without registering there, you won’t be able to get the billion dollars in Switzerland“

4. Maintain dialogue

According to the panel, the most common reason for taking money out of strategies remains the departure of a manager. Other than that, fund lists tend to be revised to reflect an updated view on markets. Regardless of whether a direct or indirect action, communication with the fund selector and investor universe, both existing and prospective, is most important.

“If strategies aren’t visible, it tends to be a case of out of sight out of mind”

Fund selectors and consultants appreciate timely and concise commentaries that show adherence to the philosophy and process.

Engagement with investors is even more important when a fund performs poorly – being proactive by explaining underperformance and how management is responding can make all the difference.

 “It is normal to hear radio silence from asset managers when performance is bad. However, you remember the ones who keep communicating”

Fund selector checklist

Even if a fund is not the absolute best in class, its prospects can be boosted by helping a fund selector tick as many boxes on their mental checklist. This includes the philosophy, the process, the distribution positioning, and the ‘need’ the strategy is meeting. And if you want that business bad enough, do not be a stranger, radio silence can be lethal.

– Henry Adefope, Director

Methodology: Tavistock interviewed a panel of five fund selector researchers from fund of funds managers and global wealth managers on the do’s and don’ts product providers should adhere to in regard to getting their buy-in.