Fact Sheet Best Practices: Investment Data Marketing

It’s that time: quarterly reporting. Like you, we are neck-deep in publishing, reconciling, and managing the data for all of our clients across North America, Europe, and Asia.

One of the most important items on client to-do lists at the quarter-end is updating their marketing collateral; namely, their fact sheets. Fact sheets are the indispensable piece of marketing collateral for every asset manager in business. Why?

Because while all firms might not qualify in database searches (some may be too small, too focused, too niche, or simply too secretive), every single firm must have a fact sheet. Why?

Because fact sheets answer all the dumb questions. By “dumb” we don’t mean stupid or insipid – what we mean is that these are the elemental questions that constitute the base-level due diligence. In other words, the 5 Ps: Product, Philosophy, Process, People, Price (fees).

How can investment managers optimize their fact sheet strategy in order to maximize their utility for marketing and sales?

Choose the metrics that best reflect what you do and why. With the new SEC advertising rules, managers need to be extremely careful to not cherry-pick only the most advantageous data.

For example, firms must publish 1-, 3-, 5-, and 10-year performance (or Since Inception if 10-year numbers have yet to be achieved), and they cannot emphasize one advantageous performance period over others that are less so. There is also a mandate that managers not exclude anything whose inclusion would materially affect how a product or service is evaluated.

These new regulations mean that asset managers need to look at the broad set of metrics and be sure to include a selection of those that best describe the firm, its investment operations, and portfolio management operations.

And realize that not every comparison has to be quartile-leading – sometimes a poor comparison opens the door for meaningful discussions about what you do and why. Remember – your firm’s story is just as important (if not more) as the quantitative analytics.

Make sure your benchmarks & peer groups are advantageous. Although some databases, such as Morningstar, will assign products to a certain benchmark, that doesn’t mean you have to follow their lead. If the S&P 500 isn’t your best comparison, then use one of the Wilshire benchmarks, for example, if it’s a better fit. Or, what’s your cumulative return vs a benchmark, as opposed to a benchmark’s ETF?

Compare yourself appropriately.

Update as soon as you have the data reconciled. Fate favors the prepared, so lose no time in updating all of your marketing collateral (including the website, if you post performance there), as soon as you’ve been able to verify your data.

Database subscribers run updated screens this time every quarter – if your database profiles say one thing, your fact sheets better say the same thing (and vice versa). Being up-to-date and timely with your data shows that your firm’s procedures are in place and operate efficiently.

In highly competitive industries, such as investment management, these are the small details that can loom large when making decisions among largely comparable firms.

Function over Form. Keep in mind that while we all appreciate looking at nice things, never forget that you are not promoting your graphic design capabilities. A groovy layout with eye-catching aesthetics are great and all, but these cannot be at the expense of the data and comps that best position your firm against its peers and benchmarks.

The consultants, institutions, and high net worth investors performing their due diligence need clear, organized data above all else. A funky design that inhibits finding that which they need quickly and easily is a detriment.

Keep it simple and in line with what’s expected (the same goes for your website, in our view).

Know your competitors. Here, we are writing about a specific type of fact sheet – the Head-2-Head analysis (H2H). H2Hs compare a firm to its closest competitors, be they SMAs, mutual funds, or any other product or vehicle – not just a benchmark.

H2Hs can be leveraged for specific use as the sales process narrows to a few finalists. As we all know, every closing meeting is different because the competition is different. If a firm can identify the other firms competing for the allocation, they can create fact sheets that compare directly against them.

There are always metrics that are favorable to an individual firm’s style – find them and leverage them to your benefit. This means having a customizable H2H fact sheet that enables these comparisons, and it has the added benefit of following our recommendation that firms have multiple marketing collateral products for each stage in the marketing and sales process.

In the end...

This is an industry not known for its innovative and leading-edge marketing strategies – everyone pretty much does the same things, with some outliers occasionally pushing the boundaries on the margins.

What this means is that broad standards of industry practice have been established, and managers must comport to those expectations.

Ensuring your fact sheets, pitchbooks, website, and database profiles all enable those with whom you want to work to quickly and easily find what they need to know about you is vital.

So while fact sheets in particular must address the 5 Ps, and do so clearly, managers do have some latitude in how (and when) they can portray themselves.