Investor Understanding and Trust Drives Asset Flows
The data are clear: There is an unambiguous link between strong investor education programs that build investor trust, and the growth of asset management firms. The largest asset managers have invested the most in their investor education efforts over the last 10-15 years. Sales and marketing costs now make up nearly a quarter (24 percent) of the cost base, second only to the investment management function.1
These managers are now perceived as the most trusted by investors and have gained substantial market share. In the last decade, the top 10 global asset managers’ market share has increased from 35% to 50%.1 Last year, the largest hedge funds, those with $5bn or more of AUM, received 65% of all net asset flows.2
The message is undeniable. Trusted asset managers:
- Raise over four times more capital than top investment performers
- Are hired 3-12 months more quickly
- Are retained 3-12 months longer
- Have clients that are easier to up-sell and cross-sell
If you want to win big, performance alone won’t get you there. Outstanding investor education that builds investor trust is a critical tool for successful asset managers.
The Golden Circle of Asset Management Investor Education
* Source: 2014 Chestnut Advisory Group LLC proprietary institutional investor survey.
1 Source: McKinsey
2 Source: HFR