If you are a fund management group and you have been seeing some nice inflows of late, I can fully understand that you want to shout about it, particularly given how challenging markets have been. I also fully understand that when these inflows have continued for some time, you want to shout about it even more. So I shouldn’t be surprised by the headlines “XYZ reports 12 months consecutive inflows” should I?
What I just want to point out is that when you are meeting your pr people to put such inspiring news into a press release to distribute to the world, you might want to think about the full impact it will have.
Let me be clear, I am happy for fund management groups to do well and to boost their assets as a result of strong returns. However, I am not so happy when it comes to the sort of things they think will make me a loyal supporter, such as the news of inflows.
Do fund management groups think that this type of news will make me sit up and shout “Crikey, this is an amazing opportunity that hitherto I have been blind to see and I must immediately recommend this to all of my clients” or might I instead think “if that is the best you can come up with, you have less to offer than I thought”. I would also worry that if you are now attracting large volumes of assets then your moment of glory might be about to pass and as I would rather be first in and first out, so to speak, rather than herd following and getting the timing wrong, it could be time for me to look elsewhere.
So please just think very carefully about what news you want to announce and whether it will actually help.
And as a final note, if you might be paying a heavy marketing subsidy for some of those flows of business, you should also rethink that strategy. The more you pay to acquire, the quicker it will leave.
Philippa Gee is managing director at Philippa Gee Wealth Management.