The Investment Research Partnership

Consultancy Case Study 2

Development of sales ideas to aid Investment sales .

Summary

A major investment company was suffering low sales of it’s investment funds through poor performance although they were a major market leader only three years earlier. They needed to find a way to get their funds back onto investment brokers buy list.

Client's Business

This was a major investment company with many years of experience in the market place. Numerous reorganisations had fragmented the company structure and how it was perceived in the market place. Was it a fully bona fide investment management company with a life and pensions division or a life and pensions company with an investment arm? It needed to strategically define itself within the market place that would recognise it as an investment house first and foremost.

Critical Client Issues

Other long term peer group competitors had produced considerably better performance from their funds and these had caused out flows of funds from this investment company. New boutique investment managers had come onto the scene and these were also attracting large inflows of new money. The company needed to reposition itself within it’s key market place which at the time was the IFA market. However many IFAs were reluctant to move funds back to this manager because of under performance in earlier years against peer group competitors.

This company needed innovative ideas to get key identified IFAs buying funds once again.

Our response to this proposal

A company promoted, advertising campaign was initiated, aimed at the IFA market in general.

The strategic marketing project we developed was aimed at key investment brokers on a one to one relationship level to rebuild confidence between the broker and the company.

• Using analytical systems available to us, we started analytical reviews (Quantitative analysis) of the funds marketed by this company. This review looked at the funds in isolation, against a wide peer group and against key competitors. For marketing purposes, this type of review was relatively new at the time.

• Strengths and weaknesses of each fund were identified and using this information, a strategy of how these funds could be promoted within the market place was developed.

At this time funds were marketed almost exclusively by their past performance. The aim of this review was to take quantitative data and analysis, (something very new at the time, common place today) and promote a fund because of low volatility (risk) or a high alpha (high out performance due to added value from the investment manager) against benchmark.

• The innovative aspect of this review was to go to the key investment brokers and ask them for a number of real portfolios the company could analyse using agreed criteria. We took each fund in the portfolio and did regression analyst to look for weaknesses. We then took one or two funds out of the portfolio and rebuilt it using funds from this investment manager.

• The portfolios were then shown to the investment broker highlighting how the changes we made would have:-

a) improved the performance

b) reduced the volatility (risk)

c) improved performance and reduce volatility.

Client Results/Benefits

The project took 3 months to initiate and was rolled out over the following 6 months. To implement the program required training of the investment sales team so they could understand the process and relay this to the investment brokers.

The capital outlay was relatively low but the resultant sales were well above expectations.

The investment company improved sales over the following 12 months by 28% from these key investment brokers. The company were looking for a 12 to 15% improvement.

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