Five dumbest things investment managers say on their websites

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If you’re using these five phrases, you may just be portraying yours as the Grand Poobah on the home page of dumb investment managers.

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Phrase on home page: Founded by NAME in YEAR

Who cares? Unless you’re Warren Buffett or Ben Graham, it’s a name that nobody recognizes.

I’m sick of seeing this plunked down smack dab on the home page as if I’m supposed to know who in heavens you are. Does your name and length of tenure prove competence? No they don’t, and people are tired of hearing it. Remember 2007? I lived through Lehman where they claimed “we set the bar very high.” Ever since then I’m sick of false pretenses. And so isn’t the rest of the world!

As you may have noticed, Betterment is giving away investment advice for less than what I spent in 2019 on my Metrocard fare. And they reached billions under management with less tenure in the business than most people spent getting all their MBAs, CFAs, and every other designation that all of us thought would render us capable stock pickers! Founded in 2008? Managed by Mr. or Mrs. Algorithm? You don’t see that front and center on page one of Betterment’s website.

If you were a big gun, we’d know your name and probably wouldn’t even need to go to your website to learn more about you. If you’re not (99% of you aren’t), stop being an imposter. Don’t get me wrong – it’s important for investors to know that there’s a credible person making the investment decisions and that they’ve been doing this for a significant amount of time. Put your name, credentials, and firm history where they really belong – on the About Us page. The home page is what gets the most attention so hit the investor with what really matters the most: what you do, for whom you do it, and what the experience of working with you is going to be like.

The information that should be front and center (but often isn’t) is the AUM because as we all know, investors vote with their dollars. Not quite as easy to pony up that info, is it?

Flagship Fund

This is positioned as the largest or most important fund that the investment management company offers. I know, you want to show people you have some “crown jewel” that makes the portfolio manager look like the 2006 Indianapolis Colts.

Problem is that by doing this you’re inadvertently creating competition between your flagship fund and the other portfolios you manage. Subconsciously I am biased to pick the option that poses the least risk.

Let me give you an analogy. Let’s say I go to Target to buy a stroller. By the way, I have four kids until six years old (literally, I actually did this to myself). Now there’s the old faithful stroller with ample storage space, two roomy seats, and a pull out skater board. It’s the most popular choice. But they also sell a running stroller, an ultra lightweight stroller, and a marquee stroller with coffee cup holder and sun repellent covers that folds up in less than three seconds. Any of these options may be better for me but new flash, I’m not even giving them a glance. Why would I, when you’ve blatantly told me that one option is popular than all the rest?

You know what happened to the Fidelity Magellan Fund, right? Now that was a Flagship with a capital F.

Our Disciplined, research-driven, systematic approach

Oh, fa fa. (This is what my Italian grandmother used to say. I believe this is a conjugation of the Italian verb “fare” which is “to do or to make.”)

You investment managers just love making it seem like you are the Drew Brees of finance. However the adjectives you use to describe your process are so vague and overused. Research-driven? Really? Now that’s a novel idea. You mean you weren’t just flipping a coin? Instead of sounding credible you come off as a tiny bit self-inflated.

Remember that nobody really cares how you pick the stocks, they just care how you perform. Instead of spending cyberspace exalting your approach keep it factual. But definitely keep it to a minimum.

Direct access

As in "We provide our clients with direct access to the top investment products." Oh please. The gusto of the access argument is dead and gone, folks.

This is a very old school marketing technique. It used to be that the UBS and JPMorgan private banks had access to the magic mystery tour of outperforming hedge funds. If you weren’t uber wealthy enough for the roast beef then it meant you were the little piggy who had none and cried wee, wee, wee, all the way home.

All the “marquee access” pitch tells investors is that you work for a big, fat commission and in the age of fee-only propaganda (the RIA firms are great this) this is not the angle you want to take.

Select group of clients

You’ve used this line before: “We work with a select group of clients who (insert blah blah blah)”.

Remember Madoff? This was the way he conned all those poor people into investing with him. It was the allure of feeling like you were cool enough to fit into some secret, highly exclusive, elite club. Turns out that – well, you know what happened.

The exclusivity card is one that has become played by ever major investment shop and hedge fund to the level that it no longer carries any meaning.

Sara's Upshot

Let’s face it: life isn’t getting any easier for people who make their living managing investments for other people anymore. Taking this meaningless jargon off your website will make your it more enjoyable than a trip to the dentist which is the painful experience most people have when they visit 99.9% of investment management websites. Curious to hear if I think your website is doing it right? Send me a DM on LinkedIn and let’s chat.

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