Why Asset Managers ‘Do’ Thought Leadership

Few asset managers lack the ambition to be recognized as a thought leader. Many publish white papers and studies on a regular basis.  Some unequivocally stamp sections of their websites with the ‘thought leadership’ label just to dispel any remaining ambiguity of purpose. What is less clear, however, is WHY they do it. It’s useful to look at the purpose thought leadership serves.

I had the good fortune of speaking with the head of an investment team who addressed the question in a recent client meeting. (All names have been withheld to protect the innocent). The actual question was “so why do you do thought leadership activities?” I find the answer incredibly instructive.

There are many reasons for asset managers to conduct thought leadership, namely:

Thought leadership helps provide structure and promotes rigorous thinking.

In the context of ever-evolving markets, investment and research teams tackle interesting and important questions every day. Rendering that output in an accessible, external form forces you to construct a compelling narrative that leads the audience from the introduction all the way to the conclusion. It sounds simple. Logical missteps or unanswered questions are not permitted. The benefit here largely goes to the team undertaking the activity, in that it raises the quality of analysis and communication.

Thought leadership fosters innovation and product development.

If you have a new client request or regulatory change, you have an impetus for identifying a solution. The path you take to tease out the right approach and the client’s decision (e.g. change strategy, shift assets, adopt a new framework), along with the final outcome–the client’s success–form the crux of a case study. Investors (whether they admit it or not) often exhibit a herd mentality. This is not a criticism. There are several reasons investors should care a great deal about what others are doing–not least because whole groups of investors share similar concerns. For asset managers, sharing that knowledge and client ‘win’ with the outside world makes good business sense, because it can bring the ‘lessons learned’ to a broader audience for whom it can be quite relevant.

Thought leadership allows managers to differentiate and deliver more than ‘just’ financial performance.

Lots of players on (often) clearly demarcated fields mean it’s rather difficult to stand apart from the herd among, for example, first quartile US large cap strategies. Investment management is tricky, in that while delivering strong performance trumps all else, there’s still the ‘else.’ Investors value clear, timely and insightful communication. Anything you can deliver that lights up their ‘priorities radar’ — be it a market or regulatory outlook, new portfolio construction techniques, or investment committee best practices — can strengthen the manager-investor relationship.

Thought leadership creates awareness.

Clients of professional services firms often prove willing to lend their attention to insights,  new solutions or trends–especially when it’s about ‘them’ and their area of activity. Thought leadership content with real substance stands out from what Jack Bogle dismisses as ‘financial pornography.’ All other things being equal, a thought leadership piece will garner substantially more client engagement than a product launch press release. Journalists give greater consideration to the former. It’s not hard to understand why. Thought leadership materials create an opportunity to engage with journalists in a more meaningful way–the clear advantage being that discussions with journalists translate into press coverage, boosting brand awareness and credibility, as any PR manager will tell you.

What’s more, for asset managers that have adopted ‘cause marketing’ either bolted-on (more common) or as a founding principle (think Generation IM)–a broad category that could span activist hedge funds, green investing boutiques, long-only managers with a focus on corporate governance, or more ‘plain vanilla’ shops with a specific corporate social responsibility focus (i.e. workplace diversity, a low-carbon future, etc.)–raising awareness on a particular topic counts itself as a win.

A win for all

While this list of reasons why asset managers do thought leadership may not be comprehensive, it certainly puts forward a number of valid purposes that can serve to inform an asset managers’ thought leadership activities. Coupled with the ways that thought leadership can add value for investors, it provides key elements for making thought leadership a mutually-beneficial proposition for asset managers and investors alike.

What’s your view? Are there other reasons for asset managers to conduct thought leadership programs, in your opinion?  Do you think that thought leadership is worth the effort, and that it ‘pays off’ for all parties involved?

How Content Marketing Is Sweeping Asset Management

More and more asset managers are riding the content marketing wave. What began in so-called Anglo-Saxon markets like the US, UK and Australia has quickly swept Europe and Asia. Firms are looking to create new content teams or reposition existing ones in order to refine the focus and to boost both the quality and volume of content. In this post, I explore the key drivers underlying this trend, along with opportunities and risks for asset managers. Finally, I offer a set of guidelines to help asset managers raise their content game and successfully navigate the oncoming deluge of less-than-stellar content.

Wait. Content what?

Content marketing relies primarily on storytelling and publishing to reach prospective clients. Messages are transmitted via a range of channels that include online articles, how-to guides, videos, documents (case studies, white papers, brochures, magazines) and more. Most content marketing evangelists advocate giving it away for free. It differs from other types of marketing that focus more on promotional and price-based offers.

Content marketing’s global domination

To some observers, there’s nothing revolutionary about content marketing–especially since the key tactics and formats have been around for decades. Yet, the term ‘content marketing’ itself appeared only in the late 1990s, and has really gained traction among marketing professionals over the past few years, with the founding of organizations such as the Content Marketing Institute. Worldwide, over 90% of marketers recently surveyed say they currently use content marketing.

content marketing table global

Asset managers board the content train

In this context, it’s no surprise that asset management firms have come to embrace content marketing. In some cases, this entails boosting headcount by adding investment writers or marcomms coordinators, often dedicated to a specific client segment. In continental Europe, some asset managers have created new content marketing teams and labelled them as such. Others have drawn from already-established product marketing, investment writing, PR, design, video & web teams. While the evidence is, in part, anecdotal and relies on discussions with industry marketing and HR professionals–I have no doubt that these moves signal a real move towards more thoughtful content marketing buoyed by additional resources and greater support from top management.

Why this makes sense

In a way, content marketing in the financial services sector is nothing new. In a guest post for Digiday, Barry Lowenthal details Why Finance and Content Marketing Go Great Together. To reiterate a number of my favorite key points:

  • “Financial-services clients [companies] have long been in the content game, investing tens of millions of dollars in research that they distribute to their clients.” Investment banks and sell-side research teams especially have perfected this activity.

  • ”They already have a publishing machine in-house.” Yes, nearly every firm can publish. But some firms have yet to uncover the true potential of a well-tuned machine.

  • ”They’re usually not selling anything online, so their KPIs lean toward engagement, which is the sweet spot for content marketing.” While some firms lament their inability to sell online directly to consumer (due to lack of infrastructure or regulatory hurdles, for example), it reinforces the role of the sales force and two-way interaction with clients.

  • They ”intuitively grasp the importance of being thought of as thought leaders.”  Go here for more on how asset managers’ thought leadership can create value for investors.

To these points I would add that content marketing suits financial services particularly well because education is key. Market developments, regulatory changes and product innovation–which are constantly in a state of flux–can all impact clients’ financial outcomes.

Several additional factors are making themselves felt in the asset management space:

  • Social media is becoming a must-have, at least for retail/advisor segments & recruitment purposes. This very public form of two-way communication and the opportunity for content to ‘go viral’ mean that managers have to focus more on delivering messages that meet the audience’s needs. Evidence from PwC confirms that firms that do this well have the greatest success.

  • Heightened competition, fee pressures, the growing popularity of passive strategies, and the decline of sales commissions (distribution fees) make it essential for managers to communicate more on the relevance and the added value of their product and service offer.

Proceed with caution

Without a doubt, asset managers’ embrace of content marketing merits praise–this is a positive development that will help revitalize firms’ attention to clients’ interests. Bumps and challenges may present themselves during the transition.  An amazing slideshare presentation from Velocity Partners warns of the unseemly underside of content marketing’s ascent, namely, lots of:

According to Velocity, key potential obstacles to include:

1. Coping with a marketing skills gap: finding “people who ‘get’ content, understand context and can actually produce things that audiences want to consume.”

2. Generating friction through mediocre content. Audiences will raise their defenses and become less trusting.

The warning: poor content brands risk being washed away amidst the effluence, while strong content brands stand to gain ground.

So, what’s an asset manager to do?

The marketing skills gap can be combated by informed hiring and training decisions. Consistently delivering high quality content and building a strong content brand is less straightforward. Here are a few tips:

1. Go a step beyond know your client (KYC) to know your audience (KYA). Find out what they know, where they get their information, how they make decisions. Document this and share it within your organization so that everyone is ‘on the same page.’

2. Identify and address clients’ most important issues–these are your benchmark. How you relate to them largely determines your relevance.

3. Raise the bar for the quality of your communications. Set a written content strategy and editorial policy.

4. Pay attention to the messages, articles and videos that capture your attention. Re-use the most effective storytelling techniques you find there for your own content.

5. Plan ahead, execute to near perfection, measure and analyze the results. Make adjustments, rinse and repeat to follow the path to continuous improvement.

6. Be patient–the road to success–earning your audience’s trust–takes time.

By following these guidelines, asset managers can build strong content brands. As Velocity points out, a strong content brand creates a virtuous cycle: strong content brands tell great stories that attract new talent (that tell great stories).

What’s your view? Do you have other examples of how content marketing is sweeping asset management? Additional tips on how to create great content?

When Higher Price Equals Higher Demand

Recently, a lot of recent political and business discourse has hinged on common sense notions of supply and demand—erring on the side of over-reliance on an appeal to reason that can lead to mistaken logic.

The law of demand posits an inverse relationship between price and quantity demanded—when the price of a good goes up, the demand for the product goes down, and vice versa. It’s important to emphasize that this general principle is not absolute, which is to say that there are exceptions to the rule.

Let’s examine several exceptions to the law of demand, illustrated here:

Supply and demand chart image
According to the law of demand, price and quantity are inversely related.

Meet Thorstein Veblen

Thorstein Bunde Veblen, an American economist and sociologist who coined the term ‘conspicuous consumption,’ leant his name to Veblen goods—which defy the law of demand. The Veblen effect explains how Veblen goods, or ‘positional’ goods, become less desirable (lower demand) when their price decreases, since their status symbol shine diminishes as they become more affordable.  For these types of goods, the reverse also holds true—higher prices coincide with greater demand.  Does this kind of conspicuous consumption ‘make sense’? Probably more than North Korea’s latest fad, buying refrigerators to store things like books since the power supply proves so unreliable.

Pinching pennies

Counter-examples to the law of demand are not reserved to the upper echelons of society. Economically-challenged individuals or lower income households can violate the law of demand when the price of basic goods (staples) increases, since they offset the price rise by cutting back on other less essential purchases. This concept comes from British economist Alfred Marshall, who attributed the idea to Scottish statistician and economist Sir Robert Giffen. He wrote:

As Mr.Giffen has pointed out, a rise in the price of bread makes so large a drain on the resources of the poorer labouring families and raises the marginal utility of money to them so much that they are forced to curtail their consumption of meat and the more expensive farinaceous foods: and, bread being still the cheapest food which they can get and will take, they consume more, and not less of it.”

Alfred Marshall, Principles of Economics (1895 ed. III.VI.17).

So not only does bread purchases make up a larger portion of the poor family’s’ budget–the family actually buys a greater amount than before in order to keep their stomachs full.

Buying ebooks

In The Secrets to Ebook Publishing Success, Mark Coker notes that a whole segment of ebook buyers steer clear of works at the lowest price point range ($0.99 to $1.99) because they judge low priced ebooks to likely be of lower quality than higher priced ones. He writes “lower prices generally resulted in more unit sales, with the exception of the $1.99 price-point, which appears to underperform.”

A blip in the ebook demand curve at the $1.99 price point. In theory, this should be a negative sloping line.

Aside from this one anomaly, his data showed consistency with the law of demand.  I’m not sure if there’s an economics term for this particular phenomenon.

It’s the counterexamples, stupid

While the actual requirements for a commodity to qualify as a Giffen good are strict enough to make their existence a subject of debate among economists, the fact that counterexamples to the law of demand exist at both the high and low ends of the price spectrum is telling. The ebook example shows that with real data under the microscope, the real picture may surprise you. Commentators who want to rely on the law of demand as absolute truth may rely too heavily on the general principle to support their argument—opening their claims to legitimate challenge. The lesson for content marketing folks is to be careful about how you use common sense arguments to build stories/prove points.

What do you think? Do you know of other ‘common sense’ claims that are over-used or used inaccurately?

The Price of Admission Ladder (Infographic)

The price of admission ladder is a kind of pay scale for consuming content: you consume; you pay. It covers ‘free’ and ‘paid’ content along a single spectrum to help audiences and publishers understand their relationship more clearly–online or not.

Value and engagement drive the audience to pay more in terms of time, data and money.
Value and engagement drive the audience to pay more in terms of time, data and money.

Read the full description here.

The Fight Club Rule of Thought Leadership

Views, advice and opinions on thought leadership abound. Trawl the world wide web long enough and you’ll stumble across debates about the ‘real’ definition of thought leadership or whether a company (rather than a person) can be a thought leader. The Fight Club rule of thought leadership, on the other hand, enjoys seemingly unanimous agreement.

The first rule of thought leadership is you do not talk about thought leadership.

It’s difficult to pinpoint the precise origins of the Fight Club rule of thought leadership. I make no claims as to authorship. You can find recent posts referring to the rule here, here and also here. (Sidebar: the formulaic first rule of Fight Club lends itself to pretty much any business or social media topic, which means there’s a whole section of the internet dedicated to corporate riffing of a single line from a 1999 movie. Why it’s reappeared after 14 years is anyone’s guess–possibly an interesting observation related to demographics and blogging).

 In practice, there are two corollaries to the rule.

 Corollary 1: You do not apply the moniker ‘thought leader’ to you or your colleagues.

This morning while eating breakfast I saw a guest political consultant on a news program call himself a ‘rock star’ on national television. The fact that he did so to prove a point he was making nearly caused me to spit half-chewed cereal and milk across the kitchen. The lesson? If you choose to behave like that you’ll probably come across as boastful, arrogant, pretentious, or just plain silly.

 Self-proclaiming yourself a thought leader is counterproductive to your desire to be seen as an expert. Audiences will be less receptive to your message. Know-it-alls tend to monopolize the conversation and be more close-minded: two things aspiring thought leaders should avoid at all costs.  Also, a recent study shows that people suffering from narcissistic personality disorder have fewer brain cells in a certain region of their brains…which means you risk being a few sticks short of a full croquet set (kidding: the science is still out on that one).

While there’s not a single, agreed definition of the term thought leader, most online commentators tend to agree that it’s a mantle bestowed upon an expert earned through years of hard work in an industry. Fly-by-nights and self-promoters need not apply.

Corollary 2: You do not apply the moniker ‘thought leadership’ to the materials you publish or the words you speak aloud.

You’ll find the term thought leadership plastered on brochures, web pages, smartphone apps, etc. This is also a no-no, for the same reasons as Corollary 1. This one proves tricky, though, because while it’s easy to follow, the genie is already out of the bottle. The IBM Institute for Business Value, for example, offers “leading edge thought leadership and practical insights for business executives.” SAP’s website offers thought leadership by topic. Both firms are frequently cited for the high quality of their thought leadership platforms. Does the label ‘thought leadership’ irritate their B2B audiences? Not enough to make the practice obsolete, obviously. In the financial services industry–my sandbox, so I won’t name names–plenty of firms similarly group white papers and other materials on a landing page under the banner of thought leadership.

The bottom line.

Not every company reaches the point of being recognized as a thought leader. Those firms and individuals that are successful appear to respect Corollary 1 and portray at least an outward appearance of humility. So it makes sense to respect Corollary 1. Clearly, the same cannot be said for Corollary 2, which appears to be more of a stylistic preference than a hard-and-fast rule. Ultimately, you’ll gain agreement within your organization as to whether you follow the Fight Club rule of thought leadership and its corollaries.

Do you follow the Fight Club rule of thought leadership and its corollaries? Do you know of any other generally-accepted rules to conducting thought leadership?

What You REALLY Pay for Content and What This Means for Marketing

“The best things in life are free”–so goes the 1959 hit Motown single Money (That’s What I Want) by Barrett Strong.

Content, on the other hand, is never free. You pay something for content, knowingly or not, though there’s not always a price tag or exchange of money. You pay in the form of time spent with content, divulged online behavior, personal data and–yes–cold, hard cash.

The revelation on price comes from a discussion on value.

This idea came initially from an off-hand remark I took from a discussion that many content marketing fans find shocking: “when you give information away for free, it essentially means that it has no value.” Hearing this from the (still anonymous) head of an award-winning content program sent my head spinning. Quickly, I took to the blogosphere, wrestled the claim in this post and sent the subdued remainder of an argument bouncing around discussion forums, the Twittersphere, and the like. It soon became clear that when content works, not only is it valuable both for the provider and the audience, but that you–the audience–pay for it. Always.

Knock, knock. You’ve been called to action.

The original, analogue example was a report–though any message, note, flyer, prospectus or other dead tree product addressed to you or put directly in your hands will do. Once you have the content in front of you, you make a conscious decision whether to toss it, skim it, or consecrate a few minutes to make sense of the message. In this brief window, you’ve already been called to action. As the seconds tick by, you’re engaged with the content–and you are NOT doing much else. In the time it takes you to pick up the content and decide your next move (ignore, skim, set aside for later, read), you’ve already paid an opportunity cost.

The more you like, the more you pay.

Your opportunity cost represents the lowest level of engagement–the bottom rung (Rung 1) on the price of admission ladder which illustrates what you pay as your involvement with a provider’s or website’s content increases. The more an audience engages with content (a sign that they attribute more value to it) the further they’ll move up the ladder–paying more time, data and cash along the way.

Value and engagement drive the audience to pay more in terms of time, data and money.
The price of admission ladder. Value and engagement drive the audience to pay more in terms of time, data and money.

Climbing the ladder.

As you move online, you continue paying opportunity costs that vary in length from obnoxious pop-up ads to hour-long videos. All the while, an invisible transaction takes place. On Rung 2, cookies record and store and your IP address, geographic location, and web-surfing behavior. As you spend more time on the site, you may move to Rung 3 by creating an account, or using social sign-in to identify yourself–thereby divulging personal identification information such as name, phone number, email address, interests etc. B2B sites may hit you up for corporate identification information (company’s name, your professional role, number of employees, sales turnover, etc). Divulging this information can unlock protected or premium content including special reports, tutorials, and the like.

You reach Rung 4 by opting into periodic communications from the provider–checking a box or signing up for a newsletter. Here you essentially enter into a tacit agreement for the provider to eat up more of your future opportunity costs in exchange for the convenience of being altered to new developments/stories/offers that appear on the site. Rung 5 introduces the distinction between free-of-charge and paid content by giving you a sample, i.e. 30-days free or 10 free articles per month. It serves to convey a single message: “See this paywall? there’s great stuff behind here and we’ll give you a taste while you’re looking for your wallet.”

You cross into Rung 6 territory once you’ve forked over money for content. It’s an initial purchase that likely bite-sized so as to be more affordable and less of a commitment than Rung 7’s full-on subscription.

Not all ladders are equal.

The price of admission ladder shows all possible payments paid by an audience, though each website or content provider’s actual model will vary. If you discover and immediately fall in love with a newspaper’s online site you may only traverse rungs 1, 2, 3 and 7. B2B websites not equipped with e-commerce functionality may only build out rungs 1 through 4.

Implications for marketing.

Understanding the costs your audience pays to engage with your content can be helpful in a number of ways.

1. Design a sturdy ladder. Figure out which height you would like your audience to reach and make it as painless as possible for them to get there.

2. Don’t leave money on the table. It would be a shame to leave data unused in your web team’s closet. Do you have a robust and compliant data collection system in place? Crunch it for more insight about your clients and prospects.

Does it make sense to think about free/paid content engagement as a series of costs paid by the audience? Have you seen something similar? Can you think of other uses for the price of admission ladder?

‘Free Content Has No Value’

When free = worthless.

The other day I happened to speak to a marketing director who laid out the details of the brand’s distribution of thought leadership content. The firm in question has a solid reputation for producing high quality pieces and, as I learned during the discussion, seeks to imbue them with an air of exclusivity–meaning that they print and deliver hard copies to the target audience by snail mail. No email blast, no pdf posted to the web. In describing this particular strategy, the director emphasized how this exclusivity reflects the characteristics of a premium brand, adding that “and of course, when you give information away for free, it essentially means that it has no value.” The corollary: only paid content has any worth.

When you give information away for free, it essentially has no value…

Premium content.

There’s a certain attractiveness to the idea that top content comes at a price. After all, paying for content does indicate premium value: think cable/satellite television, industry/client market reports, the Michelin guide (their green guides for travel or the red one for restaurants), stock research, sites with paywalls, etc. So people do pay for content, and in general that content tends to be of higher quality than the free version. Most firms do give it away for free, so those that can convince clients to buy it clearly make a compelling offer. In a sense, creating content that people will purchase could be seen as the pinnacle of content marketing success. Yet, by most accounts, content marketing should provide content for free (or at negligible cost).

Are innumerable marketing professionals damaging their companies’ bottom lines by creating something of value (with a price tag) and simply giving it away?

Widespread panic.

Here I’ve spent years trying to refine content marketing efforts for financial services firms–which relies on providing useful information as a service in order to gain the trust and credibility of prospective clients and eventually make a sale. If we break it down to price per word, the customer paid…absolutely nothing. Was that a mistake? Could content marketing, which has been recently garnering a lot of interest across the intertubes, be a hoax? Or worse, are innumerable marketing professionals damaging their companies’ bottom lines by creating something of value (with a price tag) and simply giving it away? Surely, these questions merit serious investigation.

Multiple response.

While I find the notion that valuable content should command a price on the market compelling, this seems a very high bar that few firms actually meet. It’s hard to imagine an average or even above average marketing team convincing management and sales teams that monetizing their output takes precedence over brand building, lead generation and other key marketing objectives.

So the contention that free content has no value misses the mark for several reasons:

  1. One need not conflate price and value. They’re not the same thing. I value many things that do not have a price. Within a corporate paradigm, a firm may find it more valuable to provide content to its customers than not provide/create it–precisely because it’s appreciated by customers, bringing reputational benefits to the firm along with a more robust sales pipeline and perhaps even more revenues–which would clearly be more profitable than keeping the information locked away in a dusty archives.

  2. There is a cost/price paid, but it’s not paid to you. When someone takes the time to consume your content, they pay an opportunity cost–that is, they choose to spend their time doing that rather than something else. A key goal for marketer’s is to facilitate a purchase, not put up paywalls or roadblocks at every step along the way.

  3. It’s free anyway. The brand in this example prides itself on exclusivity–but doesn’t go so far as to charge for content–since that’s not the main business. Rather, they achieve the appearance (or illusion) of exclusivity by artificially restricting distribution of their content (offline only). Clever, but still free to consumers.

  4. It’s costing you. There’s a danger that the brand has effectively limited the upside to its content (that is, restricted the potential benefits that could have been gained from it) by limiting distribution. Perhaps the firm in question could  achieve more with the same amount of content by effectively recycling it online. This could include pre-release using the current method (snail mail) and later running online efforts (teasers, sign-up drives) that could be conducted without damaging the brand’s exclusivity by using equally exclusive online channels, such as native advertising, invitation-only forums, etc. Movie distributors have shown that carefully staggering content across multiple channels can multiply the rewards (a paid content example, but worthwhile nonetheless). Online distribution means more than simply posting a pdf to the web.

While some brands may find that a paid-content business model works well, the trend in journalism and elsewhere clearly suggests otherwise. The majority of firms must find ways to make free content work: the financial success of companies like Google suggest that it can be done. But an ad-supported revenue stream is not the only option. Firms that combine content marketing with consultative selling (most professional service firms) could charge for workshops or staff training, while some may decide that the benefits of having an audience engage with their content is reward enough.

What do you think? Is paid content the zenith of content marketing? Does monetization align or conflict with other marketing objectives? 

How Asset Managers’ Thought Leadership Creates Value for Investors

Not everyone is convinced that an asset managers’ thought leadership content in its various guises–email, video, slides, events and long-form articles–can add value for its audience of investors.

According to critics, thought leadership amounts to a mundane, me-too effort that succeeds only in killing trees and filling pixels in a way that provides sales teams something to shove in front of prospects and clients–just like the competition does. While these naysayers may often be justified in their cynicism, especially regarding mediocre content, it’s not always the case: successful thought leadership can create value for investors.

Thought leadership, simply defined, is a company’s effort to communicate innovative and compelling analysis/information that proves useful to the audience, thus driving the business relationship forward. It’s necessarily differentiated from that of other firms, because it’s meant to support that particular company’s relationship with the intended audience (often a specific type of investor). The firm expends time and resources, and expects a return on the investment in the form of higher profits in the future. It’s a fine proposition for the manager, but what can it offer investors?

An asset manager’s thought leadership can deliver three kinds of value to investors:

  1. Technical value
  2. Personal value
  3. Social value

Knowledge, or technical value.

Financial markets evolve constantly, with new types of investment strategies and even asset classes emerging from the sheer force of innovation. Investing today is not the same game it was 50 years ago, wen investing in timber meant that you had a pile of wood, and quantitative computer models that generate buy/sell lists or machines that trade at fractions of a second were not readily available (to say the least).

Thought leadership provides investors with information about new strategies or product offerings, along with explanation of how they work and how to put those products to use within a broader investment plan. To be effective, it must be clear, well-structured, and explicitly tie the key messages to the investor’s objectives. Successful thought leadership in financial services hinges on investors’ needs and paints a full picture of both the risks and potential rewards linked to a given trend, strategy, or asset class.

Successful thought leadership in financial services hinges on investors’ needs and paints a full picture of both the risks and potential rewards linked to a given trend, strategy, or asset class.

Reassurance/confidence, or personal value.

It would be as mistake to categorize investors as simply rational. While sophisticated investors tend to be quite rational, comfortable with models and financial calculations, there is an emotional element to even the most rational psyches. Providing a case for investment or current macro economic analysis that supports their way of thinking can reassure them in feeling that they have made the right decision (to invest or not, choice of product, timing). The audience can use this confidence to persuade other people (especially other members of the decision-making unit such as investment committees) to accept their view.

Acknowledgement/notoriety, or social value.

Thought leadership can, and often should, engage the audience in the discussion. A case study, for example, where a firm goes out and interviews clients could be distributed as part of a thought leadership effort. The interviewee, giving answers if not also ideas, receives recognition of his/her peers. It also provides recognition that the company 1) really listens to its clients and 2) has experience addressing the needs of that type of investor.

Taking a look at these three kinds of value (technical, personal and social), the impact of thought leadership will vary depending on the particular audience member and the effort the firm makes to leverage the value created. In most cases whether a household or large institution, the investor is not a single person, and the decision-making process involves multiple individuals in multiple roles, such as those acting as a gatekeeper, providing advice, approving the final decision, etc. Whether it’s a member of an investment committee, an adviser, or even a spouse, the individual can make use of technical, personal, or social value—or a combination thereof—in the way they see fit.

Whether it’s a member of an investment committee, an adviser, or even a spouse, the individual can make use of technical, personal, or social value—or a combination thereof—in the way they see fit.

A company well-equipped to aid them in realizing this value will engage the audience by delivering pertinent content as part of a broader consultative selling process in order to grow the relationship. In financial terms, the consultative selling process backed by successful thought leadership can, but does not always, translate value into better financial performance (risk-adjusted return, better diversification, avoidance of loss) for the investor.

So, what do you think? Do you know of any other ways that asset managers’ thought leadership can create value for investors?

Origin Story

Que la lumière soit.While I’m certainly a fan of some of the grittier reboots of fictional character narratives (i.e. Batman), there is something more pure to be unearthed in the traditional origin story. This new website — by definition a beta launch since I’m learning much of it along the way — springs from several related interests including content creation, online sharing and the tools of social media.

Curation as introduction.

This is not, however, my first rodeo. My initial foray into online content began with curation (think of a museum curator without a museum) focused on the topic of thought leadership, which I dubbed Cogitation Supremacy. I set out to explore the extent to which these nebulous ‘online communities’ of complete strangers sharing about their common interests do, in fact, exist (they do). For beginners looking to curate, I can heartily recommend Scoop.it.

The New Platform.

This new endeavor offers me a chance to go another step further in creating and packaging content that is my very own. This space will serve to showcase updates and thoughts that may be of interest. I’ve enabled comments and sharing in order to allow for discussion and exchange. For those interested in finding out more, the horizontal navigation at the top of the page will take you to Activities and About pages. Feel free to contact me via the contact form or find me in the Twittersphere.