EP 5: Nine Out of Ten Portfolio Managers' Marketing Is Terrible: Here's Why

Nine out of 10 portfolio managers' marketing is terrible. If that sounds harsh, ask yourself whether you could name three funds off the top of your head. Most people can't name one.

In this episode, Gareth is joined by Giles Swan: public policy and regulatory consultant, former UK financial regulator with 25 years of international experience across investment services, digital assets, and payments, to unpack why fund marketing so rarely moves beyond a monthly fact sheet, a conference presentation, and a portfolio manager on a podcast. 

They explore why funds lean on the name of the manager or the brand of the management company instead of building a real narrative for the product itself. They get into why "professional investors only" often becomes an excuse to avoid retail-facing marketing that the content reaches anyway, and how compliance teams can release the handbrake on creative, plain-language communication without stepping outside the rules. They discuss why fund communications are so often overweighted on risk disclosure at the expense of explaining the actual outcome, and what the FCA's Consumer Composite Investments regime signals about the direction regulators want the industry to move. They also look at what fund managers can genuinely learn from crypto marketing — a higher-risk asset class that somehow communicates more clearly, more concisely, and more engagingly than most funds manage to.

The throughline: don't rely on performance alone, and don't forget the top of the funnel: awareness has to come before conversion.

Whether you're rethinking a fund's naming and narrative or trying to get compliance and marketing pulling in the same direction, this episode is a useful reset on what fund marketing could actually look like.

If you want to understand where your model sits and what it needs to work harder on, the Roadmap to £10bn package is the place to start: https://www.zeyro.one/roadmap-to-10bn-package

Transcript

SPEAKER_01 0:00

Nine out of ten portfolio managers marketing is terrible.

SPEAKER_00 0:11

Gareth, we um we often uh spend time with portfolio managers when we're we're supporting funds in thinking about their proposition and distribution and the like. And what strikes me is how expert and passionate portfolio managers are about what they're good at, which is the investment proposition, running money, delivering performance and the like. But you know, I I think we find there's a often a challenge in translating that for investors for the for the wider market. What are the kind of challenges you see most prominently there?

SPEAKER_01 0:46

I mean, there are so many. And firstly, it's a real pleasure to have you with me here today, Giles. I know we've dragged you across the country and you're about to fly away to Malta for the day. But um, but yeah, so on the side of the marketing, you're right that what often happens is a portfolio manager is going to talk very passionately about how great they are, how they've moved the money in the right directions, or how the market has maybe moved against them in certain conditions. Um, and often the marketing structure of a fund is we'll present you with a monthly fact sheet, which will have some numbers and a paragraph of commentary. We will maybe do a presentation that we can deliver uh at a conference or in other sort of formalized setting. Um, and basically beyond that, we'll possibly put a portfolio manager on a podcast uh or some other um audio recording to talk about the performance of the of the fund. And what that really does, I think, is probably really limit what the art of the possible is for that fund, especially when you compare it to other types of investment products in the market and how they they present themselves and how they market, but also even how you can sell through your distribution channels that you already have. Um and I suppose the last thing that managers often have to think about and they maybe struggle with sometimes is the multi-layered nature of the audience that they're presenting to. Okay. So maybe they're presenting initially to a distribution agent or some people tied to them that will be out selling. Then they'll move into okay, well, we'll be talking to the advisor networks and the other distribution layers there, some maybe platforms, um, D2C platforms or advised intermediated platforms. And then some, but very, very few will then think a layer deeper and talk about the actual end investors, unless they're talking about maybe some high net worth investors or some sophisticated investors that they can sell a big chunk to. Beyond that, I think everybody else kind of gets forgotten.

SPEAKER_00 2:51

And if we we think about what's actually produced by a fund and a fund manager uh for a fund, you have you know what the legal and compliance team helps you produce, which is the legal documents like the prospectus and the you know the key investor document. Maybe you'll produce a fund fact sheet, you know, on a monthly basis and the like. And then you have the marketing team that will be you know thinking about brand and promotional materials and the like. And one of the striking things, certainly for me, uh, which picks up on all of the points that you've just raised, is how different financial products are to other products that we buy in terms of the brands that we think about, or the even the name of the product or the or what it does. You know, if you go and you go to a shop and buy something, typically you're you're the brand is there, you're familiar with that, you're sort of familiar with the with the with the thing you're buying. For funds, it feels very different. Like you might know the name of the portfolio manager or maybe the name of the firm, but you know, so talk about talk to me about that. Like how how does how does that that work? What what needs to be done there? What can what can be done to resolve that differential?

SPEAKER_01 3:59

You've absolutely nailed it, and it's so weird to me that this is the way it works. It's almost like you've got this um clique of people, and all they want to rely on is the name, um, the name of the individual running the money, maybe. You've got some star names out there that people kind of keep bringing up and going back to, and they'll just follow the name where they go. So, fair enough, there's a bit of that because obviously a skilled portfolio manager will deliver the right outcomes for you, but then there's a lot of portfolio managers out there that you you wouldn't know if you met them in the street. Okay. So there's that piece. You're absolutely right that then also the backup option is to think about the brand of the management company itself. So, you know, we've got the heavy hitters, you know, you've got your black rocks, you've got your you know, your Aberdeens, you've got you've got the names of the firms that sit up at that level, yeah. Um, and they rely very much on kind of the the power of that uh brand and brand identity. But frankly, one BlackRock fund to another, um, one Aberdeen fund to another, there's a vast difference in what you're actually buying there. You know, it's Coke and Diet Coke, right? It's um uh or cherry coke, right? There's so many different things at the product level that you you you need to try and get across in your messaging, and most don't. I mean, so a a question back to you. Could you name me three funds? Like give me the names of them. You don't have you don't have to you can just verbally confirm whether you could or not, but do you would you be able to name me three different fund names?

SPEAKER_00 5:34

Probably in a struggle, yes. But um yeah I would just be able to get I could probably think of one, maybe I'll get to three. But do you do you think the average person on the street could name you one fund?

SPEAKER_01 5:44

No, I don't know. Which is bonkers, right? Because you're putting as a retail investor your pension, your retirement fund, your ability to you know survive after retirement into these products. Yep. They're gonna keep you uh keep you going, they're gonna feed you. And you can't tell me anything, you probably can't tell me what they are. You probably can't tell me what they do. You probably have a vague sense of the risk profile. Maybe you've got an advisor who's told you at moderate risk here, or maybe at four out of five, um, we're in a higher high stocks or equities portfolio versus a bond portfolio. But beyond that, you might not you might know the manager. But beyond that, probably nothing. And that to me is totally bonkers.

SPEAKER_00 6:28

Okay. Um I mean what we're talking about here is not you know the detail of the investment techniques that are being used in the fund. I don't think we're we're saying here that a retail investor should understand, you know, that the fund's using a butterfly option versus a future versus a swap or anything of that sort. But it it is sort of understanding the core components of the product. And um do you think this is because there is a fear and uncertainty about what you can say? Or or maybe there is a um you're you're not hiding behind compliance, maybe, but but there is a in the back of your mind that, okay, uh the regulator says I have to say it this way, or I can't say this, or I can't say that. To what extent is that driving some of these challenges that we see? I think that's the easy answer.

SPEAKER_01 7:13

I think the easy answer is absolutely compliance said no, we can't say this thing, we're marketing to professionals only, that's how our permission set works, all that kind of stuff. We've put professional only on our prospectus or our other documents, and we just sort of hide behind that. We've struggled historically with compliance saying no to things that we wanted to do and say because there was a risk there that that was maybe being taken. But honestly, I think most fund managers are probably slightly scared of the um the retail marketing uh strategies and tactics. Okay. And I think probably they think that there's a huge budget required to do serious mass retail marketing, recognising that each individual retail investor will probably only put a little bit of money towards you versus focusing quite narrowly on maybe an advisor network where if the advisor can do those distribution pieces for you downstream, you only need to focus your attention in one or two or three places. My contention with that is that's everyone's strategy. Yep. Everyone is doing it that way, so you're not differentiating yourself. And basically, an advisor is going to go to their client with a metaphorical briefcase full of fact sheets and kids and prospectuses, and within a certain risk portfolio you know, profile, it'll just be a almost look of the draw which one gets pulled out and put in front of the investor, because you know a lot of funds are quite interchangeable in their at least risk profiling. Yes. Um and actually I think firms that really grasp the nettle of talking about or creating a real narrative for their product, not the manager, not the portfolio manager individual, but the product itself, who can accurately describe why did this fund come into being in the first place? What were we thinking about when we did it? Um, what niche does it fill? What sort of person are we really, really targeting here? You know, have we got some sustainability credentials? So we're going after people who really want to think about solar or wind or whatever. Um, those kinds of things, if you really grasp the nettle on that narrative, your fund will be memorable not only to that retail investor, but to the advisor who's then going to be able to talk about it more confidently. And I think the more a fund manager or portfolio manager can make their advisor networks um empowered with memorable stories, interesting narratives, the more chance it is that it's your fact sheet that's getting pulled out of the back. Yeah. And then I think that works also for the D2C platforms, because you can use that same narrative, you can use um you know actual content on the fund itself, push it out to those D2C platforms, and have your fund really kind of rise to the top amongst all of those others. Because, you know, we again in the in the D2C platform market, you've got some quite recognizable names, you've got some quite recognizable brands, and but all the marketing from those platforms is about themselves and it's about their name. And great, I might know to go to Nutmeg or you know, Wealth Time or whatever. Like I know that there's a bunch of places where I can go to make some investment decisions as a retail investor, but what do I do once I've got there? Look of the draw, right? Like pick a one that sounds interesting. And I suppose just to throw one back at you then, Giles. So obviously we've had a load of thematic work from the regulator maybe five years ago, maybe slightly longer, because I'm getting old, um on like fund naming conventions and clarity about objectives and policies and the language and stuff, and that's sort of predicated a bit of consumer duty stuff. Yes. But do you think that was the right focus? Uh, do you think like the the real heavy-handedness on you must call your fund this particular structure, ACD name, portfolio manager name, strategy name, has that is that really the right outcome? Is that the best way of thinking about it? And are there other things that managers can do around naming conventions to create a real brand for a fund?

SPEAKER_00 11:27

Yeah, and in terms of where regulators are trying to get to, there, there's lots of consumer research to say that actually the name is a core driver of how an investor thinks about a fund in the moment that they first see it. But a lot of the regulatory work that's been done on fund naming, and we have a sustainability component about that, about being clear on the sustainability of investment strategy of a fund and how that relates to the name. And the investment objective, a lot of that is to do with a lot of the mandatory disclosures that regulators require, like the key investor document, uh, for instance. But that document is primarily designed to allow investors to compare funds side by side when they're thinking about um subscription decisions. Um and we we always think about funds in terms of the fund itself, but the point you're you important point you were making is that actually investors don't just invest in one fund. And they won't just invest in funds from one manager, because managers are good at certain things and other managers are better at at other things. So that these are always going to be part of a of a portfolio. Um so I think a lot of that regulatory work has been focused around some of those mandatory disclosure documents and get and being clear on those. But uh there's a broader point here, and I think every regulator would agree that they want information to be available to investors that is clear and understandable. And so certainly the intention is for regulation not to prevent that information from being produced and information beyond the mandatory disclosure document. So these are the really important components to what's in the fund name or how the investment is described, but that's just the entry point for an investor to begin to understand a product. And it's the broader use of the fund in the portfolio and the materials beyond the mandatory documents and beyond the fact sheets, like the promotional docs, that I think are more useful for investors to understand the product, but present greater levels of inherent compliance risk, compliance risk because they're not mandatory structures, they're not mandatory formats, etc. And that's where the need to try and translate the investment proposition into plain language, but within the constraints of what the compliance team is telling you, what the legal team is is telling you, that's the tension here that I think we see portfolio managers and farm managers struggling the greatest with.

SPEAKER_01 14:00

Yeah, and I do feel sort of sorry for them in a way because it is really hard to create a brand out of a really structured naming convention almost that really focuses on describe the strategy, tell us who the providers are. You can't create a separate sort of brand name for the fund. I've seen people try in the past and fail. You'll put your application in for authorization for a USIC strategy with a catchy name, and it will just get batted back as not descriptive enough. So I understand the kind of uh handcuffs that kind of sit there, but that doesn't mean that everything else around that has to suffer that same kind of fate. And I think probably compliance teams do need to start releasing that handbrake a little bit and allowing content teams, marketing teams, distribution teams to be able to be more creative with what they're doing. Um and and frankly, you know, we've we've run the roadmap uh to 10 billion uh strategic work a few times now with with clients, and it is interesting that you can explain fairly basic strategies for marketing, um clipping a portfolio manager's longer um podcast episode into smaller bite-sized chunks for reuse across other social platforms, and that will seem quite out there in the sort of world of funds, um but that's very basic social strategy. And I think fund managers fail to recognize that yes, in particularly advised and intermediated markets, a lot will be driven by what the advisor does. Yes. There's also a bottom-up push that comes from the investors as well. Like if an investor goes to an advisor and says, I've seen this fund in the market, you know, what's that about? Is it worth us looking at as part of my portfolio? That's got real value. Like then the ad then the advisor is thinking, Oh, you know, people are actually interested in this, maybe I should be telling other clients about this fund and you know, thinking about things that way. So I think I think there's a real like um gap for retail focused product level marketing in the investment fund space. And I'm sort of a stone that it doesn't really exist. I know some people are sort of playing with it a little bit, but beyond that, there's you you don't go on TikTok or Instagram and see a reel for a for a fund, right? Why not? Frankly, why why why not? Um so that's that's one thing, and and and what we tell our clients and what we what we what we try to explain is there's a lot you can do in that space to generate that that interest. Advisors are also people too that spend their times on social platforms and other places, and they see what's uh trending and what's what's you know doing well content-wise. So you can influence them and their buy-in and their distribution decisions in as much the same way as you can for your kind of retail target audience, if indeed that's your strategy. But don't hide behind, oh well, we're only going to distribute to professionals only, we want to have a very clean marketing gap, because frankly, we we know that and you we know you know that your marketing literature is going from the advisor to the client. You know, yes, it was advo advertised to the advisor, and you've sort of hid behind that professional-only gap, but it is going to the end retail, so you might as well grasp that and do something real with it.

SPEAKER_00 17:36

Yeah, and I think it's important to in the translation to think about the audience. So, what is what's going to be understandable to the audience or what's their inherent knowledge and how you're gonna describe that to a retail mass market retail investor who is clearly very different to a professional investor. I think some of the other challenges that I see, particularly coming from a compliance perspective, is well, we have to include these risk warnings, or it has to talk about this, and often I find the communication of funds actually overweighted on risk. Of course, it's very important to communicate the risks of the of the fund, but I think more important to communicate the outcome that the fund's gonna deliver as well. And the the idea that actually I've got so many risk warnings that the FCA tells me to include or ESMA tells me to include, or whoever my my kind of regulator is, um, reduces the actual space for well, what can this fund deliver for me? And then if I'm interested in that, then what are the risks, how does it fit into my portfolio? And that's where I think an advisor can support that, but also you know, there should be that balance in what's the what's the outcome, what's the risk for a retail investor if they're interested uh and engaged in that to actually understand that themselves as well. So I that's where I think some of this tension um and the translation is more difficult of the outcomes and and often I um some fund managers might actually just give up and say, okay, we're just going to describe all the risks, that's compliant, uh, which is actually not the outcome that any regulator is wanting. They're wanting um a bit more balance there in terms of of retail investment understanding.

SPEAKER_01 19:15

Yeah, and for sure. I think one, people probably just aren't being creative enough in the solutions to that problem. And two, they're not recognising the point that you've literally just made, which is that the regulator doesn't want you to spend 15 pages describing your risks. We look at the CCI uh documentation. This is the consumer competent investments regime that's coming in in the UK. Yeah. Yeah, exactly. And so, you know, hey, you will produce this digital first consumer disclosure document, and in it you will talk about all the key points, and they've been very clear on um kind of what you have to focus on and what you have to bring to the fore and what's most important. And as part of that, they've said, look, you know, you you can put you you're going to be putting your risk things in there, but have you thought about ways in which you can um deliver that risk message in a clever way, right? Have you thought about using icons to just to quickly visually show that certain risks apply to a to a fund, for instance, which you can then drill into and give more detail on the actual risk itself if people want to understand that if they don't already? You know, what are the other ways that you can think about delivering risk messaging that gets the information across to the consumer quickly, consite concisely, uh in an easy to understand way, but also doesn't take up the entire document, so that you can focus on the bits that are important, which is what does this fund do and how does it do it? Um and why does it exist and why is it right for you. And you know, we've got the bit around advice and um rowing back on some of the what counts as regulated advice and the guidance um gap that sits there. So you know, people can start to talk about the type of investors situation that this fund would be good for. You know, hey, you care about the earth, you want it you you you're interested in um social outcomes, you're interested in environmental outcomes, great, then this fund, this you know, this solar fund or whatever is exactly the right thing for you that we saw your need, it wasn't addressed, it's got this risk level, whatever, and we can deliver a message around that that attracts you as a person who otherwise is stirring at a list of dispassionate fund names across a platform.

SPEAKER_00 21:20

Yeah, and I think we've we've even seen regulators start to be more creative here, and I think they're looking for the industry to be more creative. So rather than, as you're describing, having just a paragraph of text, um, you know, are there visual labels that we can use there? Can we use traffic lights or labels and like? And then the the opportunity of digital communication and effectively laying information. So we're all quite familiar with sort of tool tips, you know, the little eye icon often that we see on websites or or apps where we you can hover over and see what this label means or whatever it may be. And the ability to drill into information if you're interested, then come back up to the summary information. Yep, that's something you Can't do on two sides of A4 paper, you know, you then need another two sides of A4 paper to so the there's there is a I think a desire from regulators not only to use digital means of communication this and all of the opportunities that that presents, but also can you I think make this more engaging for an investor so the investor doesn't think, oh, I'm gonna have to read three paragraphs of text here to understand is this fund sustainable or is it um green on this or red on this? Can I just do that with a traffic light? And that communicates, assuming I know what the traffic light represents, this is green, and then alongside another fund which is red, and one is amber or whatever it may be. So regulators are kicking off that, and I think they're looking for industry to um to seize the opportunity. One of the reasons why the FCA has introduced the consumer composite investments regime in the UK is precisely to try and make some of these documents that are used more accessible, more meaningful um for investors.

SPEAKER_01 23:01

And they're you know, and they're regulatory documents, right? But they are described by the regulator as marketing materials, and that's their point. You have to get them authorized if you're an OFR firm coming in. You need to be able to distribute them. So yeah, they're marketing materials first and foremost, they're not risk disclosure documents. Yes, they have an element of that to them, but that's not the primary function. Um, and I think probably the last point I would make on this is look at all the other investment types out there and how they're being marketed. You and I both come from a crypto world. We've dealt with many crypto firms over the last three years, all marketing into the UK under the Section 21 regime. The type of content that those firms produce, for frankly, let's face it, a higher risk asset than a fund, is bonkers, right? It's great. They've in they've really understood the um the way that people engage with marketing content, they've really understood with how to send a message across, and at the same time, describe the risks associated with the product. And you know, we often see when we approve financial promotions in that space, you know, the need to check that there's a balance in the positive and negative, but there's a way of doing that such that the content is probably about equal, so that the positive stuff is there and prominent, and the negative stuff or the risks, the risk-based wording is also there and present, not hidden, not um deprioritized, but doesn't take over the whole um the whole page. Because frankly, if a fund manager ran a crypto project, the risk disclosures would be 99% of the documents.

SPEAKER_00 24:36

They would indeed, yeah. Yeah. And and I I think there's a couple of reasons why I think crypto firms have been able to adapt and translate better. Firstly, is they're digitally native. So they're companies that have been created in the digital era rather than, let's say, you know, the asset management or fund industry that has come into the digital era. So it's the ability to use social media effectively, it's not just about having a website anymore, it's about using social media, having an app, it's about having the risk disclosures available and accessible and clearly accessible, but as you say, not taking up nine-tenths of the screen space with actually the the the own the 10% for the most important thing, which is what the product actually does. Um because there's no point in having you know 90% of risk disclosures if if you don't understand what the risk disclosures relate to in kind of in the in the first place. Um and I think the other reason why they've uh adapted and been successful is trying to reduce the amount of of content to be more concise, because there's only a limited amount of space on an app screen or a web page rather than printing off a fact sheet of four pages or six pages where actually you don't need to be as concise. So and as we know, it takes longer to write less. Um and so that that's the I mean I think that's a couple of the reasons why I've seen them be more able to communicate on a higher risk product um in in actually a very effective way. A thousand percent.

SPEAKER_01 26:05

That is that's exactly it, and and nobody reads a prospectus of a fund. I bet very few people even read the two. Sometimes I know how you spend your Fridays, but um but a thousand but that's it, you know, people are not dis not digesting that amount of content, particularly when they're maybe invested in six, seven, eight, nine, ten fund products, um, that they can't even tell you the name of, let alone like all the risk disclosures for each one, etc. So um if your strategy is about distributing very text-heavy, risk heavy documentation, with maybe a fund manager giving you a heavily scripted video once a month about their performance in the market, then probably what you need to think is is that really enough? And in today's world, I would say absolutely not, because even advisors are being overwhelmed by the amount of information that's been thrown at them. And also, and I'll sort of make this as my last point, most fund managers, I would say, rely too heavily on performance as their way to market. And I think that gets you so far, but I'd call that a fundamental, and I don't think you've you will be thinking enough about if you're relying entirely on performance or you're relying heavily on performance as the way of measuring or mar or marketing the fund, you aren't thinking about the attention level, you aren't thinking about raising awareness at the top of that funnel to get someone interested enough to check your performance in the first place. And if you don't have the top of the funnel, then you're not going to get enough into the second level of the funnel to convert into an investment in due course. So my message ultimately is don't forget the top of the funnel. Yeah. Make more content, distribute it, be more um alive to your market and to your audience. Um and hopefully your performance is there and you can convert it.

SPEAKER_00 28:04

So I think what we're saying is you know, it's important that information is available. We're not saying you shouldn't make information on risks available or something. That that's important that that's available. What we're saying is how to make that information available, how to make that digestible, how to translate, and almost uh give the investor the what they need at the start, but the ability then, if they want to, to dig into more information on specific risks or specific parts of the strategy, etc., and how to communicate that effectively. And I think what you said several times, Gareth, is trying to make this more bite-sized. So it's not a half an hour YouTube video, it's the ability to be comfortable that it can be a two-minute YouTube video with all of the necessary disclosures and access to but then maybe there are 15 of those two-minute videos, and maybe I want to watch all 30 minutes of it, but equally maybe I just want to watch four minutes of it. You know, how how can how can that be done effectively without sort of legal and compliance saying no, that doesn't work, or the portfolio manager speaking in terms that maybe isn't understandable. So um it's the way in which all of that is communicated effectively.

SPEAKER_01 29:13

Every investment is a journey made by a customer, and that journey doesn't have to happen all at one point in time, and you can interact and engage with that investor at multiple touch points before they get to the point where they read your kid or put their you know put their hand in their pocket to type their credit card into a platform. Um so think about the multiple stages that someone might become aware of you, aware of your product, check its performance, adjust it enough to bite into it, and then do the conversion. So that's it. Do more, um, be more engaging. If you've relied entirely on disclosures, you've not you've not done enough. Okay. It'd be great to talk to you about this. You too, Josh. Thank you very much.