Asset Managers Embrace Social Media MarketingJune 21, 2013
Asset managers are increasingly using social media as a way of communicating with existing and potential clients, consultants and the wider world, but European firms are lagging their US counterparts in embracing such tools.
According to Cerulli Associates’ Social Media Survey 2013, nearly 50% of US respondents indicated that social media is a key element of their marketing strategy, compared with only 10% of European managers, while as many as 40% of Asian managers surveyed are not using social media at all. Asian managers are sceptical about the effectiveness of social media and prefer a more cautious approach to delivering content to end investors, according to Cerulli, which polled 90 asset managers in Asia, Europe and the US, representing $27.2 trillion in assets under management.
Fidelity Personal Investing, which was one of the first retail asset managers in the UK to engage with customers via social networks, launched its Facebook and Twitter operations in January 2010. It launched a YouTube channel in the summer of 2011 and Google+ in August 2012. It also built up a LinkedIn presence in October 2012, and has increased its LinkedIn followers by 720% since then – although LinkedIn itself has grown from 22 million users five years ago to 200 million as of January this year, according to Forbes.
Jonathan Hewitt, head of marketing for Fidelity Personal Investing, said: “Fidelity shares a range of information via social media. This includes articles and videos from investment experts, tools to help investors, charitable events we support as well as special offers and new product launches.”
Managers whose target audience included retail investors or intermediaries tended to be more active on social media than pure institutional players, according to MHP Communications, which surveyed 100 asset managers from across the world last year.
Martin Forrest, director of MHP and author of the survey, said: “International firms with strong retail arms tend typically to be more advanced in their use of social media because the retail investor is assumed to be more likely to be social media-literate, and communicate through Twitter, watch YouTube video interviews, and so on.” He believes that fund managers will need some “Hollywood glamour” as more beauty parades are conducted digitally and pension funds will make investment decisions without ever meeting the manager.
According to the MHP survey, those asset managers that pioneered social media are now reaping the benefits in terms of building an audience. In the year to July 2012, the number of people following Pimco on Twitter jumped from 24,106 to 76,266, and at the time of going to press that figure had grown to about 130,000. Other managers that have increased their Twitter audience include Vanguard, which rose from nearly 63,000 followers in July last year to more than 93,000 last week, Fidelity Investments with 64,000 (up from 49,893,) and Blackrock, with just under 59,000 (compared with 10,952 in July 2012).
James Rainbow, head of marketing in the UK for Schroders, said that the firm uses Facebook for graduate recruitment, LinkedIn for overall recruitment and Twitter as a platform to communicate with journalists and industry commentators. The firm has primarily invested in its blog, however. Rainbow said: “We are increasingly interested in where we can have a direct link to customers, and we’ll do that through our own blog-style website.”
Some fund managers have benefited because of individual stars or well-known figures. At the time of going to press, only four of Pimco’s last 50 tweets did not relate to comments from co-chief investment officers Bill Gross and Mohamed El-Erian, who are both well-known figures.
For other managers the use of social media has been transformational. At Robeco, Lukas Daalder, senior portfolio manager in the Netherlands, started an investment blog for his colleagues. He also began to tweet investment information. Now, he has about 2,500 followers, and arranges drinks with them a few times per year. “They are interested in economic and financial markets and I like very much that you get to speak to people that you would not normally speak to,” said Daalder, who also pointed out that it is easier to get attention from normally inaccessible investment figures once you have the credibility of followers. “I have a lot more contacts now than if I had not done anything on Twitter,” he said.
T Rowe Price has brought all its social media together under one brand, building a social media team that is responsible for liaising with marketing, legal and technology divisions. Dan Phelps, vice-president of social media, said: “We strive for integration. We want to make sure our channels provide a useful experience.” He pointed to the speed of innovation in the area. “Facebook is putting up two changes to its platform every week. YouTube has changed its platform three times since we launched, LinkedIn three times and Twitter twice, so we are constantly evolving how we think about communicating with our audience, and the tools we can use.”
Daniel Ganev, a director at Karoll Capital Management, completed his MBA dissertation on asset managers and social media at Cambridge University’s Judge Business School in March this year. In his paper “What’s not to like: social media adoption and strategies for European asset managers”, Ganev found that LinkedIn was the most widely used social media channel among asset managers in both Europe and the US because of the network’s “professional focus”. In total, 90% of Europeans and 94% of Americans have an official LinkedIn page, but just 11% of Europeans and 15% of US firms use it actively, by sharing investment and educational information. Ganev found that 12% of European and 31% of US firms use LinkedIn moderately, mostly as a recruiting tool.
Not everybody is convinced of all the benefits of social media. Atul Shinh, senior associate who covers alternatives within the manager research team at consultancy Mercer, said: “Clearly, we welcome all moves to try to improve the communication flow with fund managers, with us as advisers, and for the underlying client. Social media having had these objectives is a good thing. To be honest though, at the moment, in my capacity as a researcher, I’m more likely to rely upon other sources of information.”
Source: Financial Times