As markets plummeted around us, with the S&P 500 hitting the bottom on March 23, it soon became clear that this would be a financial crisis like no other. Asset managers quickly realized that clients needed reassurance. That meant more frequent communication through the digital channels that were available. As a global PR agency that works with financial services companies, we have seen a complete overhaul of asset manager communications strategies in a matter of months – and some of those changes are here to stay, even after the pandemic subsides.
In an unprecedented move for the industry, most asset managers moved operations to offsite locations in mid-March as the coronavirus pandemic took hold. For some, this temporarily involved relocating employees to offsite emergency offices based off decades-old crisis planning to relocate from urban centers. Some New York-headquartered asset managers, for instance, moved their traders to the small office spaces they acquired after the Sept. 11 terrorist attacks, scarred from memories of the days-long shutdown of the New York Stock Exchange and their own downtown Manhattan offices’ proximity to Ground Zero. It was easy to envisage a scenario where one office or region might be affected by a critical event, but not the whole world.
Below is our 13F roundup for some high profile hedge funds for the three months to the end of March 2021 (Q1). Q1 2021 hedge fund letters, conferences and more The statements only include equity positions as 13Fs do not include cash and debt holdings. They also only include US equity holdings. Funds may hold Read More
Within a couple of weeks, as the scale of the virus became apparent, most asset managers ended up with 100% of employees working from home. The hardest to relocate to a work-from-home environment were the traders. Bloomberg Terminals were rigged up in makeshift home offices. Some needed landlines installed and faster Internet speeds. There was a period of adjustment, which undoubtedly contributed to the slowdown of the markets. But, surprisingly, by mid-April most asset managers had the transition to work-from-home under their belts.
Many business leaders have reflected on how this would not have been possible five years ago – let alone a decade ago during the Great Financial Crisis. It’s not just software and apps like Slack and Zoom; the leaps made in cloud technology and bandwidth speeds made working remotely almost seamless.
The transition was so successful that investment managers around the world are prepared to allow remote work for an extended period, as we are all still waiting for a Covid-19 vaccine. Despite concerns from the UK government about the lack of business and foot traffic in London and other urban centers around Europe, firms like Standard Life Aberdeen have said that most staff will not be returning to the office until early next year. In Canada, Sun Life Financial has already declared that asset management and other professionals working out of its busy Toronto hub will not return to the office in 2020.
Reassuring Clients Came First
Volatility across asset classes and the complexity of Federal Reserve lending facilities that followed gave active managers the opportunity to prove the value of their expertise to institutional clients. Meanwhile, thousands of financial advisers would dial into daily calls held by some of the world’s largest money managers in search of simple breakdowns of what was happening in markets that day and how they could explain it to clients. The everyday investor planning for their own retirement needed reassurance as their 401(k) balances plummeted.
Appetite for content among investors was incredibly strong, with the evolving market and economic picture demanding timely and regular updates to thought leadership. White papers began to resemble news media itself, necessitating up-to-the-minute analysis explained in a clear, concise way. Even though the S&P had made up almost all its losses by June, clients had already forged new bonds with their money managers that have yet to sever.
Fuse Research Network surveyed more than 700 financial advisers across channels between April 17 and May 14, and 70% of those intermediaries said economic or market insights topped their wish list for value-add program topics from asset managers. The topic was followed by retirement income distribution and then estate and tax planning, illustrating how clients were in strong need of guidance on how to make sure they were financially secure and well-capitalized for the long haul.
As clients’ point-of-contact salespeople were also grounded in their own home offices, they stepped in as thought leaders and helped to ramp up digital communications. This period at home also gave more time to sift through mountains of marketing data within their firm’s CRM, making them better equipped to target new and prospective clients as due diligence meetings began happening over video calls.
Adoption Of Digital Mediums
The most striking aspect of this to us was the speed to which asset managers pivoted toward using new digital mediums. Firms that were cautious about videos and webcasts prior to the crisis quickly began filming client presentations and Q&As. Many increased out-put of client content, publishing updates on the markets on a weekly and even daily basis. Conference calls were abandoned in favor of video conferencing via Zoom, Microsoft Teams and Google Hangouts.
Because the timeliness and relevance of content was top of mind to clients, production value of multimedia content sometimes took a back seat. Videos that would have been carefully crafted by an external film crew in a studio instead were self-recorded on a smartphone or webcam. Everyone was operating under the same circumstances, so it was acceptable – and even more authentic.
The DIY nature of these videos allowed asset managers to advance in another key area of a communications strategy: Giving their spokespeople star power. Daily calls with different groups of clients were conducted by the same executive, giving investors regular access to a high-ranking official they would not have otherwise had as much contact with. Some firms played into the nature of the work from home environment, calling their webinars and podcasts “fireside chats” or “coffee talk at home.”
Value-add programs go well beyond podcasts and webinars with big ranges of clients, however. This borderless world of communication enables asset managers to offer innovative incentives to their clients. For instance, State Street Global Advisors offered clients video chats with legendary Duke University and Team USA basketball coach, Mike Krzyzewski, for mood-lifting chats about sports and helpful discussion about leadership tactics through adversity that they could use while managing their own employees.
Social media was equally interactive and took on an even more important role through the worst market volatility flare-ups. Tik Tok-style videos, just a few seconds in length, on one statistic about an asset class became regular fixtures of some asset managers’ Twitter and LinkedIn pages. Executives will tweet out just one chart to generate online discussion among investors. And on the personalized level, many money managers used social media as a tool to humanize themselves to clients and prospects. Sharing pictures of work-from-home set-ups and jokes about their children interrupting client calls in home offices became a regular part of the lexicon of a historically staid industry.
Media Visibility Counts
Apart from the content they were producing themselves, investors also wanted to see their money managers in the media. In the aforementioned Fuse survey, financial advisers expressed that they valued a firm’s expert opinions being featured in the media, such as Squawk Box or commentary in business publications, much more than they did in 2019. About 21% of advisers found this very effective in 2020 – a jump from 11% a year ago.
Video chats enabled executives to conduct broadcast interviews from their own offices rather than fly to television studios in financial hub cities like New York or Boston, making these media opportunities more accessible to asset managers headquartered anywhere and everywhere. At the same time, the sudden availability of executives to the media meant that reporters’ schedules filled up quickly at a time when the news cycle was in overdrive.
Asset Manager Communications: Here Do We Go From Here?
Some of these changes to asset manager communications will remain in place after the pandemic subsides. Now that most investors are comfortable with remote technology, there will be less need to travel to other office locations. Asset managers will still likely go in-person for finals presentations and quarterly meetings, but almost everything in-between will stay digital. These changes will fundamentally change the operations of these companies, the lives of the people that work for them, and the relationships with their clients.
As asset managers seek to reassure and sell to clients in this remote environment, the volume and nature communications is increasingly important. In the case of financial advisors, increased communication from fund groups proved helpful, as month after month, the Alight Solutions 401(k) Index proved that trades were few and far between and the average American was taking the long view that the financial services industry recommended.
This ramp-up in digital communication is not without risk, however. Cyber security has become more important than perhaps ever before. While Zoom rose to prominence at the beginning of the crisis as a favored means of video communication, the company has since faced challenges around user scrutiny of security features – or lack thereof – and a number of high-profile incidents of so-called Zoom-bombing.
To mitigate risks around the digital tools used to connect with clients and share their sensitive financial information, asset managers will have to regularly evaluate the technology they have licensed or are creating in-house. A strong crisis communications strategy is also absolutely crucial to safeguard the asset manager from compliance and reputational risk.
As they may be inclined to experiment with new technology, it’s important for asset managers to survey clients to see if their interactions with marketing, sales and investing teams are up to standard. Are all clients truly comfortable with the technology you are using? How can you better connect with them? What do they think is working and what do they need as this crisis continues to evolve?
About the Author
Montieth Illingworth is CEO and global managing partner of Montieth & Company, a global communications consultancy that advises the financial services industry.