Institutional money managers'
websites — long saddled by jargon and vague investment descriptions — are
playing a more important role as a portal for showcasing managers' capabilities
in an increasingly competitive industry, sources said.
Managers are using their
websites not just to introduce themselves and put out their contact
information, said Andrew McCollum, managing director, investment management, at
financial consultant Greenwich Associates, Stamford, Conn. The sites also have
become a major part of the firms' overall institutional marketing strategy as
pension fund executives do more of their own research apart from their
consultants, he added.
"There's an evolution in
how institutions consume information," he said. "Younger officials
will use websites, LinkedIn, social media. Older executives will rely on their
consultant or their staff, but their staff is being influenced by more
digitally accessed information like thought leadership."
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Mr. McCollum said manager
websites historically have been "more of a reactive tool, a static
property with basic messages. What's changed now is that the website is no
longer a static tool. Managers that get this are driving visits to their
website through things like thought leadership and, by doing that, obtaining
information on prospective clients."
Mr. McCollum noted it is
important to look at the development of websites in the context of the maturing
of the money management industry.
"As the industry hits an
inflection point from a growth industry to a mature industry, it's become more
competitive," he said. "That requires institutional managers to
create a marketing strategy. A website is one tool for getting their message
out."
The websites of Putnam Investments LLC, BlackRock (BLK) Inc. (BLK)
and Pacific Investment Management Co. are
examples of good institutional client websites, he said.
But smaller managers looking to
build their institutional business also are looking at their websites to drive
more interest in their firm and their strategies, said Tammira Philippe,
president and CEO of $10.4 billion long-only quantitative equity manager Bridgeway Capital Management Inc.,
Houston.
"We're thinking of the
website as building trust, not to erode trust," Ms. Philippe said.
"As we're looking to serve more institutional clients, we spend a lot of
time in trying to make our website help us do that. But we're honest enough to
say we have a long way to go."
Ms. Philippe said her firm has
tapped its current marketing and operations teams for input on improving its
website.
"We will seek stronger
technical infrastructure and data management capabilities that will allow us to
efficiently produce and deliver high quality content," she said. To that
end, the firm this year completed a study by money management technology
consultant and provider Cutter Associates to assess Bridgeway's digital marketing
infrastructure, including its website.
Added Fergal McGovern, CEO of
VisibleThread Inc., a Dublin-based software provider and website analysis
service: "Asset owners are accessing manager websites first as a means of
going directly to the source. That's happening more and more in financial
services. And if those websites are too complex or hard to read, they'll just
go somewhere else."
VisibleThread in a report on
financial services websites earlier this summer said most money managers'
websites ranked poorly in terms of content.
"As a group, financial
services content is poorly written. Even the top-ranked websites don't meet
expected standards," the report said. "Content clarity is poor
industrywide." However, the report said Putnam had the highest ranking in
terms of readability of all managers' websites studied.
Mark McKenna, head of global
marketing at Boston-based Putnam, said the company's website for institutional
investors serves as a clear introduction to Putnam's capabilities, performance
and thought leadership, ultimately "opening doors" to direct meetings
with sales and client service employees "because people are finding this
interesting."
To build its website, Putnam in
2017 hired a full-time writer with a journalism background to produce global
markets stories for its institutional clients, backed by a content strategy
director, an editorial review manager and an account manager who provides
business strategy input "and is dedicated exclusively to the institutional
business," Mr. McKenna said.
"By the time
(institutional investors) come to Putnam, they're highly informed," Mr.
McKenna said. "This already happens in retail (sales). People go to the
stores after visiting their websites. They know what they want to buy and what
it costs. What we do is remove the doubt from the prospective client. They
review our website content, subscribe to our custom content and view our
videos. … Back in the day, some of this could have been a PowerPoint
presentation to clients, but now it's web first."
Traffic to its
institutional-targeting content has jumped in the past year, Mr. McKenna said.
For example, web views on Putnam's global macro report have increased 28% since
August 2017.
He said while content on the
site is promoted mostly through the institutional homepage itself, "paid
and organic search both play a key role in bringing users to the institutional
site. For example, year-to-date July 31, organic search drove 50% of visits and
paid search drove 21% — meaning search helped contribute 71% of traffic to the
site."
Greenwich's Mr. McCollum, who
also serves on the board of the firm's $100 million 401(k) plan, said looking
at manager websites in advance helped in a recent search for an international
equity manager to run one of the plan's options.
"We went to managers'
websites to read their thought leadership," Mr. McCollum said. "It
helped us whittle down prospective managers. It's an example of how important
websites can be to provide introductory information."
Past issues surrounding manager
website content included jargon rather than direct, understandable wording that
was used to convey details on investments and operations, said Jim Ware,
founder, Focus Consulting Group LLC, a Long Grove, Ill.-based money manager
consulting firm.
"When we start working
with a firm, we ask for a pitchbook with an organizational chart and ask for a
description of their strategy," Mr. Ware said. "They say, 'they have
a disciplined process,' or 'we use a filtered process.' That doesn't tell me
anything. But that's what they also say on their websites. It's usually something
like that and who's the CEO, their picture and background. There's no mission
statement on the website."
Mr. Ware said managers often
hire branding firms to design and populate their websites that don't really
know anything specific to financial services. "The branding message — 'a
disciplined shot, a strict investment process' — really? You spend $200,000 to
bring a firm in to write generic, vanilla stuff like this?" he asked.
Focus doesn't make
recommendations to manages on branding, Mr. Ware said, "but if we did, we
could advise (managers) on how they can say they're different from others, tell
them they really ought to tout that."
VisibleThread's Mr. McGovern
added that managers have been more comfortable with resorting to jargon and
vague descriptions of investment strategies, but now, "if a website isn't
meaningful, it won't serve a purpose as a window to your firm."
A common concern among money
managers, Mr. McGovern said, is getting website content approved by their
compliance departments. But that's changing as managers take a closer look at
the content.
"Those managers ahead of
the game understand the difference" between using what some might consider
safe, vague terminology and providing basic but essential information about
their firm and its investments, Mr. McGovern said. "They understand they
need to look at their sites from an outside-in perspective. The progressive
side of web design is looking at answering a viewer's basic questions. The poor
compliance officer is nailed with being the culprit to keep websites from doing
that."
Still, Mr. McGovern said, most
managers haven't gotten "ahead of the game." Has VisibleThread seen
any improvements overall in the industry on money management content clarity
since the first study in 2016? "Not materially," he said. "The
industry isn't any better with this than they were two years ago."
Focus' Mr. Ware agreed, adding
most managers he works with aren't concerned. In an informal survey of seven
money management clients on whether their websites deliver new business to the
firms, six said no and one said yes but as a part of a broader marketing
strategy.
"But it's a timely
discussion," Bridgeway's Ms. Philippe said. "We're discussing it, and
I know other money managers are discussing websites as well."
CONTACT RICK BAERT AT RBAERT@PIONLINE.COM · @BAERT_PI
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