Attracting your first $100 million

by Marilyn Dale

Richard Clark

Every story has a hero. At SunStar’s recent client conference, we called on Richard Clark, Director of Sales & Marketing, Jensen Investments, and Phillip Vong, Assistant Vice President, Croft Funds, to tell us how their firms are heroes in the mutual fund distribution story.

Jensen today tops $5.5 billion, with $4 billion in its mutual funds. Their challenge was to grow the firm from $200 million in 2000 without changing its culture. Today, they have just added a third person to their outside sales staff.  

Family-owned Croft-Leominster contemplated closing their fund about five years ago but instead decided to make a commitment and forge on. Today, the firm has $1 billion AUM, with $400 million of that in mutual funds.  

SunStar: How important is data gathering on your clients?

Vong: We took a big jump in assets once we figured out how to interpret and manage Schwab information. It’s like a game, getting, collecting and interpreting the data – then following up.  

Clark: Absolutely critical. We start by using all the free data feeds from the platforms to know who is using our fund.  Next we cross reference this with data from RIA Database so we know more about our clients both large and small and where the opportunities for new business lay.   Over the past decade, we realized we had very little information about our advisor clients at wirehouses and independent broker dealers and that we needed more data tools.  This led us to subscribe to Access Data.  When I pulled my first few reports, I was shocked.  I found out that close to 8,000 investment professionals were investing clients in our fund – I only knew about 1600 of them. 

 SunStar: Any recommendations once you have data?

Vong: We can’t contact everyone so first I analyze the data and prioritize it. This may seem odd, but if I see three new advisors, one at $10,000 and two at odd amounts like $352,777 and $181,543, I’ll call the $10,000 one.  My guess is the others are just transferring in an existing position from a prior advisor that they’ll be liquidating. The $10,000 guy, he’s probably made a strategic decision to recommend the fund, and I want to develop a relationship there. Of course, if I see the transfers lingering a month or two, I’ll follow through there as well.

Clark:   First, learn all you can about the advisors that currently use your fund.  We compare all of our clients with data through RIA database to get a sense of the AUM for each firm using the fund.  Next, we look to find the “toe in the water” firms; these are larger firms with small positions in the fund.  We then use the fact that they have some money with us to get a foot in the door.

As far as platforms, it’s like an Easter egg hunt to figure out what’s available through the various trading platforms.  It may take a while to find the right person but just keep calling.  You’ll eventually find the right person who can help you take advantage of their platforms.

Lastly, push your transfer agents for data.  If you are having problems finding the right person on a platform, check with your transfer agent or distributor to see if they can help.

 SunStar: Do you take advantage of exhibiting at industry conferences?

Clark: Over the last 11 years, we’ve probably tried them all.  Schwab Impact is our #1 choice then Morningstar.   Conference sponsorships in our opinion serves three purposes, supporting those organizations that have helped us grow, seeing current clients and prospecting for new business.   We make sure we’re seen by the analysts, marketing and relationship managers.  

We have tried a variety of conferences in the past and will continue to try new ones in the future.  It’s important to understand the focus of the organization putting on the conference so you know which markets they serve.  If your target market is primarily RIA’s, you wouldn’t want to pick a conference that focuses on the BD market and vice versa.

Over the past few years, we have focused on sponsoring individual chapters of the Financial Planning Association. There are more than one hundred chapters around the country.  I believe we are sponsoring 8 this year.  Working at the chapter level provides an opportunity for a more personal relationship with financial professionals.   For example, in Minnesota, we paid about $3500 and could participate in their symposium, golf outings and meetings. We also sponsor a wealth management conference for members of the AICPA.  We have a lot of CPA’s that use the fund so being a part of this conference made a lot of sense.   Again, find those groups that align with your investment approach. 

Vong: We also participate in Impact, Morningstar and FPA. We are also doing Pershing this year and are considering LPL. As a smaller fund at $15 million, we went to only one conference – Schwab.

SunStar: Both of you work with the news media. How has that benefited sales?

Clark: Our PR home run was in 2002. Forbes, Kiplinger and Money Magazine all did a feature story on Jensen within 60 days. In general, talking to everyone is great practice…the story is so important; every question needs to be converted into that consistent set of messages.   

When we first started marketing the fund 11 years ago we focused too much on performance.  As a result we had money going out the door as soon as our performance lagged.  Now, we lead with our process first and foremost.  What investment professionals want to know is how your investment strategy can add value to their allocation.  

Vong: We had a similar experience. You can see instant results when you are small. It’s telling to watch Google analytics to see the impact following a TV experience. You also notice an increase in calls requesting information on your funds.

SunStar: After the coverage, are you continuing to use the stories proactively to build credibility with advisors?

Vong: We get the digital reprints for all profile stories and disperse them to our advisors. We make the digital reprints available on our website.

Clark: We did that in the early years, but it got too expensive. We’ve shifted to putting out two to four white papers a year. This allows us to control the message more. We post our quarterly updates and newsletter to our website as well as an email to clients and prospects.   We also add them to the Schwab site and are a research partner with Littman Gregory.  

 SunStar: Have either of you had experience with conference calls/webinars?

Clark: Jensen hosts a 30 minute conference call every quarter with 50 - 60 of its larger clients. We typically talk about the previous quarter, any portfolio changes and share our views on the markets.  We also host the previous 4 calls on our website for playback.

Vong: We do quarterly conference calls, but we found people don’t want to hear about the fund. We’ve moved to a “topic of interest,” such as a recent webinar about the water industry – of course we tie it to our fund. On our first call, we had about six participants…and three were probably from SunStar. We did learn, however, to be careful about where you publish the call in number so you attract advisors only, not “grandma.”

SunStar: What’s your approach with new advisors in your fund?

Vong: The hardest part is getting to that right person. You can't just call and say, “Hi, I wanted to know who recently bought the Croft Value Fund.” Instead, I say I want to “talk to the guy who bought our fund because we are having a ‘private’ conference call and only these special people are being invited"... I'm not having a special call....but this really works.  There may be 10 people in the firm and I need to know which one used us. When I reach him or her, I say thank you and ask how they heard about the fund and what impressed them about it. I strongly encourage them to talk to a Croft portfolio manager.

Clark: My initial contact is email. The feedback I’ve gotten about calling is advisors are too busy, getting calls all the time. I usually introduce myself, my internal, provide the relevant contact information and let them know what information they will receive on a quarterly basis.  I also lead with an email for prospects.  In larger firms there is typically a lead analyst that I reach out to and say, “if you are not the right person, please forward this information.” I’ll also note if I’ll be in the area in the near-term.

SunStar: Both Jensen Portfolio and Croft Value Fund have been discovered! What’s next?

Vong: For continued growth, we’re targeting B/D channel – and have just hired a wholesaler. We’ve approached Pershing and are working to understand and get onto different sub-platforms

Clark:  Continue to tell the story, continue to service those already using the fund and continue to explore new areas of growth.  We have a lot of data now on our B/D clients that we didn’t have in the past.  Our goal in B/D space is to find and build relationships with the person/people responsible for the mutual fund wrap products.  Getting to know the analysts or analytical team is crucial to gaining shelf space.