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Mutual Fund Firms Can Build Trust and Loyalty Amidst Bad Times

by Anu

There's not much trust or many attempts to restore people's faith in investment management these days. However, mutual funds survived and were strengthened by previous financial crises. Why not enhance mutual fund marketing communications in order to offer both investors and clients the reassurance of this historical perspective?

There's some segment easily carved out of the registered rep community (shrinking community that it is), which is receptive to new communications focused on mutual funds as the path out of financial duress.

The current economic conditions are leading the mass affluent to save like never before. At the same time, that demographic lacks trust in the mutual fund industry, as evidenced by the $8 Trillion (half in money market funds) now placed in cash and cash equivalents.

Why not invest in actively-selected mutual funds? At this unique moment in our financial history, select asset managers can re-build trust and garner loyal assets.

Here are two ideas that all Chief Marketing Officers must consider:
1. Focus - what is the one advisor tool or program that your firm can develop (or purchase) and deliver most credibly? Build only that tool or program and use all communication channels to deliver its message.

2. Support - provide financial advisors with information on how your firm has adapted as a result of the current recession. Jim Swanson, Chief Investment Strategist at MFS, considers the current recession to be the most significant economic downturn since WWII. His thoughts should be turned into a story that an advisor can easily relate to an irate end investor.

I can already see a firm rebranding a fund family as "BAILOUT FREE". Imagine the same red circle/slash symbol from a "No Smoking" sign, centered instead over a Monopoly style moneybag. That is a clear visual representation of a strong message - one that can be easily communicated to those investors who are angry with the government bailout programs.