FundFactor

Gemini plugs recent post on smaller funds and gathering assets

2012-01-23T11:01:00.000-05:00

Thank you Gemini, once again, for your recent shout out in your weekly newsletter regarding my colleague Seuk Kim's posting entitled "If you build it they will come?"

According to the newsletter, "theblog is one of many well worth the read from SunStar."

If you build it, they will come...

2012-01-12T12:21:00.000-05:00

Seuk Kim

The title of this blog is the often misquoted line from themovie Field of Dreams, starring KevinCostner. The actual line ends “he will come,” but I think the misquote is morerelevant when it comes to mutual fund marketing.
To those that have seen the movie, you will know that theline refers to the main character building a baseball field out in the middleof his farm’s corn field because of a voice in his head repeating it over andover again. Later in the movie, you find the true meaning of the line.

Great and perhaps true if you’re planning to follow in RayKinsella’s (Costner’s character) footsteps in building a baseball field, butmany mutual fund companies also tend to listen to this ill advised suggestion.They make the mistake in thinking that if they start a fund, the investors willcome. Unfortunately, this is not the case as noted in a prior blog by my colleague Dan,Death of a 5 Star Fund.

Another big mistake that mutual fund companies make isthinking that if they have good performance, it will attract investors. In somecases, this is true and if all else is equal then performance certainly helpsattract investors; however, performance alone is not enough to attract asizeable asset base.

To prove my point, I give the following examples which arefrom recent WSJ/Dow Jones Mutual Fund Performance charts of the best and worstperforming Large Cap Growth and Value funds. The funds’ names are blurred outto protect the innocent.

The numbers may be quite surprising:

The top performing Large-Cap Growth fund (YTD) has just $2million in assets. In fact, the topthree funds in this popular category combine to have under $100 million inassets! Furthermore, all of the top 10 performing funds combined have less thanhalf of the assets of the worst performing fund in this category.

The large-cap value category is a little more evenlydistributed, but the assets in the bottom 10 still outweigh the top 10 withmore than half of the top 10 best performing funds having $76.3 million or lessin assets.

Keep in mind that these are YTD numbers, but you get similarresults when you screen for 1, 3 and 5 years. I happened to be looking at theWSJ Category Kings when I noticed this phenomenon, which is why I’m using theirchart.

As mentioned before, performance certainly helps but as youcan tell by some of these funds that have the worst performance and havehundreds of millions (and sometimes billions) in assets, marketing anddistribution is likely just as, or perhaps even more, important.

So in the world of mutual funds, “if you build it and have agood marketing and distribution strategy….they will come.”

by Seuk Kim

MFEA offers Conference on Distribution Technology

2012-01-10T15:10:00.000-05:00

Guess who is at it again? The Mutual Fund Education Alliance, home of the well-known STAR Awards programs for fund distributors, marketers and eCommerce executives, has developed an event to help them use technology more effectively and increase sales.

The Distribution Technology Conference will be held on March 1, 2012 in St. Petersburg, FL.

Who should attend: Heads of Distribution (Internal/External) • Sales Directors • Business Development Officers • Technology Executives • Digital Strategists • Interactive Marketing Professionals

Sales & Distribution: Going Mobile
This full day event will demonstrate how to seamlessly manage a sales force through technology integration, increasing efficiency and effectively connecting with internal and external wholesalers, broker dealers and advisors.

Learn from experts and market leaders who have successfully implemented mobile strategies about:

Sales Force Efficiency and Automation
Client-Facing and Internal Mobile Strategies
Electronic Information Dissemination
Mobile Relationship Management Including CRM Integration
Utilizing iPads and Tablets to Improve Sales
Mobile Tools to Make Sales Directors, Business Development Officers and Sales Desk Managers More Effective
Using Mobile Apps and Social Media Efficiently

The Summit will be held at Franklin Templeton Investments' St. Petersburg Office. Complete Agenda and more available online.

Click here for more information or to register.

Mutual fund marketing blog post linked to by Gemini

2011-12-27T09:36:00.000-05:00

The holiday edition of The Gemini Weekly - the newsletter offered by Gemini Fund Services - linked to our recent article What mutual fund marketers can learn from tomato farmers.

Thanks for the pick up.

What mutual fund marketers can learn from tomato farmers

2011-12-19T13:23:00.000-05:00

Have you evergrown tomatoes? If so, you know it’s not as simple as just putting seeds in theground. In fact, passionate tomato farmers often start their seedlings indoorsseveral weeks before planting season. Once outside, they need a good dose ofsunshine and the right amount of water, not to mention great soil, shelter fromchill winds and a strong trellis. You get the idea.

GROWINGA FUND REQUIRES SPECIALIZED KNOWLEDGE AND ATTENTION
According to Morningstar, in theopen-end mutual fund industry of over $8 trillion assets currently undermanagement, the top 10 fund firms manage 57%. That’s one big tomato! The next40 manage 29%, while the remaining 600 plus firms compete for 14%. But, smallerfunds have made huge progress in capturing fund flows, increasing to 38% fromonly 14% a year ago (see chart).

Over the years, I’ve been privilegedto speak on panels addressing distribution for smaller and midsized fund firms.I’ve met dozens of smaller fund managers there. Some are managers with uniqueinvestment processes. Others are experts in their asset classes, still othershave amazing performance. Despite the good news above, they’re frustrated bylack of fund flows, anxious about mounting expenses and hungry for ideas abouthow to get the recognition they deserve in this crowded market place.

So, how do you differentiate yourfund from the others and get discovered?

MAKE THE COMMITMENT TO GROW
As a smaller or midsized firm,you’re competing for attention with firms who spend significant dollars ontheir sales and marketing activities, both in the advisor market and at theretail level. They invest in sales people (and travel budgets) responsible forbuilding relationships with research groups and advisors around thecountry.They also spend hundreds of thousands of dollars for TV commercials,glossy magazine style annual reports, sponsorships with major distribution platforms and visibilityin public venues.

Distribution is at the heart of thepotential for success. But just getting on platforms is the equivalent oftossing your tomato seeds in the dirt and hoping for the best. Successfuldistribution lies in nurturing the effort. Like adding water and light,protecting from the frost and spraying for bugs, growing your fund requiresconsistent attention. You have to ensure you’re in the right channels and thatadvisors and investors know you, know your people and know your products.

We understand smaller and midsizedfirms are often made up of a handful of people. Not all firms can afford awholesaling staff or have resources to sustain a significant marketingpresence. So, how do you make it work?

DESIGN A DISTRIBUTION STRATEGY
Write it down. Make someoneaccountable for each step. We all know that what gets measured gets done.Traditional marketing wisdom says you must address the four Ps: Product, Price,Place (Platforms), Promotion. This applies to fund distribution, too. But whatabout a fifth P, Performance? It’s true, not many investors will flock to apoor performing fund, but relying solely on performance is risky business.While performance may get you your 15 minutes of fame, performance chasers willdrop your fund for the next hot item if they don’t really understand yourinvestment philosophy and process or know the fund manager well.

COVER ALL THE BASES

PRODUCT

Build a story around your investment process that highlights the opportunities of your asset class and process and differentiates you from your competition.
Add personality by discussing your current sector strategy and top investment selections. Let investors know about the good decisions you’ve made in the past and the fund’s current positioning.
And of course, commit to excellent performance.

PRICE

Set competitive pricing - You’ll notice I didn’t say lower than average. Many managers think this is important, but many funds with lower-than-average expenses don’t sell. What does matter is how your fund compares overall to other funds that are selling.
Set your share classes so that you are priced appropriately for the advisor types you are targeting. The preponderance of flows are going to no-load and load-waived shares. For smaller firms without existing relationships or sales teams, no-load may be the way to go.

PLACE (PLATFORMS)

Select the distribution channels and share classes that make sense for your fund.
Get on Schwab, TD Ameritrade, Fidelity, and Pershing – these are the most appropriate for smaller and midsized firms with limited distribution. The no transaction fee side costs more, but also provides more opportunities. Then, establish a relationship with your account manager, who can guide you through the maze of opportunities available to reach platform advisors.
Be realistic in your expectations. If you have no prior relationships with wirehouse firms, you are likely too small to meet their criteria and if there is no demand from their representatives, it’s unlikely they will add you to the platform in the short term.

PROMOTION

Establish relationships with advisor firm research teams to get and stay on their radar. Where applicable, find out and work toward meeting the criteria to be placed on preferred/recommended lists and model portfolios.
Take advantage of marketing opportunities offered by some platforms. Develop a strong relationship with your account manager so you are alerted to and aware of opportunities for proprietary mailings or sponsorship opportunities at local and national events. Many of these are free.
Remember research firms such as Morningstar and Lipper. They have a lot of influence. Stay in touch with the analysts who cover you or should.
Communicate. Regular communication with advisors and other audiences is critical in order to keep your story top of mind. Consistently offering useful, meaningful information using a wide range of media will position you in their minds as the expert on certain topics.

Proactively engage the media. Let the financial press sell you; third-party endorsed news coverage in national and local business publications adds credibility.
Leverage third-party endorsed reprints in your other sales and marketing efforts, in print, through social networks and on your website.
Keep your website up to date with timely commentary and news coverage. Regularly post themes about your fund and the good decisions you made. If your site doesn’t allow you to add timely information, upgrade it. Advisors won’t come back if there is nothing new
Host webinars or conference calls for advisors on a regular basis. Post the replay on your website.
Use monthly email marketing programs to drive advisors to new content and fresh ideas on your website such as recent commentaries, webinar promotions and media coverage.
Repurpose the white papers, research and economic commentary you develop first on your website, then with outside resources like Morningstar, Schwab, Advisor Perspectives and more to position yourself as a thought leader.
Develop a social media strategy to distribute timely information in the networks investors frequent. Social media allows you to listen to shareholder concerns and become part of the conversation.
Know your customers. Use the data from the platforms, your transfer agency and other services to track who your investors are. Update the information in a database so you know who your producers are and who used to be. Send personalized communications when you see a new advisor and periodically to remind them you are still there.

GROWTH IS MORE LIKELY IF YOU TAKE THE RIGHT STEPS

Like tomatoes, the more care andattention you provide, the greater the likelihood for success. Healthy growthdepends a great deal on creating relationships. With today’s digitalopportunities, expanding your reach is easier than ever before. Make a commitmentto building strong relationships where advisors and investors can learn totrust and respect your firm and its expertise.

by Dan Sondhelm

Mutual fund flows: The holidays are no time to take a holiday

2011-12-19T12:00:00.000-05:00

It may just be anold wives’ tale, but many believe that investors should sell in May and watchout for volatility in October.

Adages aside, fundcompanies need to be aware that data shows that most mutual fund flowsoccur during the first quarter. According to Strategic Insight, an Asset International Company, for five of the pastseven years, net mutual fund flows show that investing activity peaks each yearduring the first quarter.

The financial crisis of 2008 and 2009 was the likelycause for this pattern to change. Net flows spiked positively in Q2 and Q3 of 2009,outpacing any other quarter over the seven year period with record weak netinflows during Q1 both years.

Data Source: Strategic Insight, an Asset International Company

Why does the first quarter motivate investors?

Year-end reviews by investors and their advisors to:

assess performance and re-evaluating the funds they hold
rebalance for appropriate diversification

New investments from year end bonuses
IRA/SEP/HSA contributions for the prior year
Ambitious marketing plans by fund companies start in January but phase out over time

Any other reasons? Email me.

It can be tempting to scale back your marketing during the holidayseason, but knowing that active investors are right around the corner makesthis a critical time to remain top-of-mind with advisors and investors. Youdon't want to miss the opportunity to be considered during the peak of trading.

While others are preparing for the holidays, your firmcould be positioning itself to be at its most visible.

Take advantage ofopportunities for positive press coverage focusing on your strategies andthoughts. This time of year, popular news publications still need to coverinvestment topics, even though many journalists and fund managers take off fortheir well-deserved vacations. If you are willing to be part of theconversations, you are more likely to get the press attention you deserve.

Make sure your Websiteremains up to date, particularly with year-end commentary of what you did welland your outlook for 2012. If your Website doesn't showcase your timely information as well as it could, consider an upgrade.

Send emails, makecalls and connect with your shareholders, financial advisors and prospects. Ifyou are present in any social media, be active. Also, consider an early January webinaror press event that shares your thinking on the coming year. Let your clientsknow you understand their needs for communication.

Of course, these strategies should be part of your overall distribution, sales and marketing plan forthe upcoming year – and remember the extra opportunities that may be availablefor next year's holiday season.

Happy holidays!

Morningstar announced fund flows through Nov.

2011-12-15T08:18:00.001-05:00

Morningstar, a leading provider of independent investment research, reported estimated U.S. mutual fund asset flows through November 2011.

Investorsredeemed a net $6.3 billion from long-term mutual funds in November. With onemonth remaining in 2011, year-to-date inflows for long-term funds are down 70percent from inflows of $244.1 billion seen in the full year of 2010.

Additional highlights from Morningstar's report on mutualfund flows:

* Taxable-bondfunds dominated the broad asset classes in November with inflows of $10.2billion. The intermediate-term bond category alone saw inflows of $8.5 billion.

* Municipal-bondfunds experienced their best month since August 2010 with inflows of $3.1billion.

* U.S.-stockfunds saw steady outflows across the major categories again in November. Theasset class lost $12.5 billion to outflows during the month, with large-capofferings sustaining the worst losses.

* International-stockfunds, with outflows of $4.3 billion, had their worst month since May 2010.Diversified emerging-markets stock funds remained a bright spot for the assetclass, though, attracting nearly $740 million in November for the category'sninth consecutive month of inflows.

Click to view the complete report or video recapping November's trends.

Videos produced by reporters during interviews become popular

2011-12-09T16:37:00.001-05:00

Ana Larreta

Video content is becoming increasingly important to grab the attention of readers. In a world where investors have access to great amounts of financial information, videos can help break through the clutter.

That's why more reporters are video-taping their interviews with money managers each time they meet face-to-face. Some are even willing to tape interviews conducted by Skype.

That was one of the main points we heard at a recent Webinarentitled, “Top Personal Finance Editors Tell PR How to Pitch, How to Place, How to Build Long-Term Relationships” by Bulldog Reporter's PR University.

Presenters of the Webinar included:

Jonathan Burton, Money and Investing Editor, MarketWatch/ The Wall Street Journal Digital Network

Manny Schiffres, Executive Editor, Kiplinger’sPersonal Finance

Russell Pearlman, Senior Markets Editor, SmartMoney

Rodney Brooks, Personal Finance Editor, USAToday

Permanent Portfolio Funds
in a MarketWatch video

It only really takes 3 to 4 minutes to do a video interviewand the end result may prove much more appealing to the audience. The processshould be painless. Money managers can even bring their own portable cameras ifthey wish.

The idea is for the video to be conversational and look natural.Money managers should speak in a way that shows their knowledge but is stillsimple, clear and easy to understand by investors and financial advisors. For some portfolio managers, media training might make sense to help them get comfortable on camera.

While the journalistic value of the investment story isstill what matters the most, money managers who can handle both print and videointerviews are more “sellable”. Reporters are encouraging PR professionals tolet them know in their pitch whether their client is willing to be videotapedor not.

These videos will help leverage exposure. They will mostlikely be posted on the financial publication’s website in addition to thewritten story. Money managers can also get copyright permission to use the videos on their website and wow visitors looking for credible visual information.

Click the links below to watch several SunStar clients on video.

Peopleare changing the way they want to recieve information. Companies are making sure they give their investors what they want.

by Ana Larreta

Guess who made the pages of People magazine?

2011-11-19T10:27:00.001-05:00

Daisy Maxey

Daisy Latimer, the daughter of Daisy Maxey, the mutual fund and investments writer with Dow Jones Newswires and contributor to The Wall Street Journal, made the pages of the entertainment rag in the November 21 edition.

"The two of us ran a race in April that ended in Central Park." says Maxey. "We went to the Revlon tent where they did a quick makeup touch-up, photographed her, and chose her as one of the women to feature in an ad."

"She's quite a beauty and smart too." says Maxey. Her daughter graduated from Cornell University where she ran track and Cross Country.

As for the journalist, she just had knee surgery inMarch with a ripped meniscus. "So for us," says Maxey, "the Revlon walk/run with my daughter was helpful for post-surgery-healing support."

And for her daughter being discovered, "She and her boyfriend are hearing from all her friends about it."

Highlights of Morningstar's analyst rating system

2011-11-17T15:17:00.001-05:00

If you were at our client conference last month, you heard Shannon Zimmerman, one of Morningstar's top analysts, promote their updated mutual fund rating system.

In addition to the traditional backward looking system, Morningstar now offers a qualitative methodology that also looks at people, process, parent, performance, and price.

The firm will expand coverage to 1500 funds by the end of 2012, but covers just 350 funds so far.

What do you think of the new system?

Neil Hennessy woos reporters in New York

2011-11-15T08:38:00.001-05:00

Hennessy Funds held its 4th annual market outlook and Hennessy Focus 30 Fund rebalance press luncheon in New York City on Tuesday, October 25th. Neil Hennessy, CIO and portfolio manager, along with Brian Peery, co-portfolio manager, presented their views on the U.S. equity markets along with the new portfolio for the Hennessy Focus 30 Fund. Click for more photos.

Thirty reporters attended from many publications including the following:

The Wall Street Journal,
Barron’s,
Fortune,
Forbes,
Bloomberg News,
ThomsonReuters,
MarketWatch,
Money,
and many more.

MFWire.com published a summary of the event, "Hennessy Remains on the Prowl for Acquisitions" and gave SunStar kudos for setting it up.

If you want to tell your story to a room full of journalists, contact me for information.

Morningstar: Are you seeing flows?

2011-11-10T14:24:00.001-05:00

Morningstar,Inc, a leading provider of independent investmentresearch, today reported estimated U.S. mutual fund asset flowsthrough October 2011. Long-termmutual fund inflows amounted to a mere $745 millionin October, but this total masks a huge disparity between flows into stock andbond funds. Combined U.S.-stock and international-stock outflows of $21.1 billion roughly mirrored inflows of $23.7 billion to taxable- andmunicipal-bond funds.

Additional highlights from Morningstar'sreport on mutual fund flows:

Investors redeemed $18.2 billion from U.S.-stock funds in October, the greatest monthly outflow for the asset class since $22.7 billion in July.
Overall, U.S.-stock outflows reached $53.5 billion for the year to date. Outflows for the asset class are on pace to match or exceed 2010's redemptions of $63.6 billion and 2008's record outflow of $77.4 billion, especially given that outflows from the asset class have picked up in the second half of the year for the last five calendar years.
Inflows of $2.1 billion to diversified emerging-markets equity funds prevented international-stock funds, which sustained outflows of $2.9 billion in October, from losing even more. Emerging-markets equity funds have seen strong monthly inflows in 2011 despite the fact that these funds are significantly underperforming U.S.-stock funds.
Taxable-bond funds, with inflows of $21.7 billion, had their strongest month since September 2010. Intermediate-term and high-yield funds dominated the asset class, taking in a combined $18.6 billion during the month. High-yield bond funds had a record month for inflows, collecting $8.8 billion in new assets.

To view the complete report, please visit http://www.global.morningstar.com/octflows11.

Competitive review of mutual fund Websites

2011-11-08T09:00:00.016-05:00

Paul Leibowitz

MFEA members got a glimpse of what’s going on with mutualfund websites these days. Presenters Allister Klingensmith and Paul Leibowitz from Sugarspun shared the results of a comparative review they did of117 mutual fund sites of varied sizes over the past two years.

Here’s what theyfound.

Audience
To password protect ornot to password protect? Do you really need separate sites for advisors vs.institutional or retail? The research observed a significant drop in password-protectedsites and special areas, across every firm size. Probable reasons includesaving money by building and maintaining only one site, compliance requirements that most advisor materials meetretail standards anyway and easier updating. In addition, if even 20% of thefirms out there offered password-protected sites, think how confusing keepingall that straight would be for an advisor. There may even be advantages to advisorshaving same experience with your site as their clients do, so they can behelpful in directing them to specific information.

Navigation
KISS – keep it simplestupid is a pretty good idea. Navigationappears to be getting simpler, with an increase in the use of dropdowns to minimizethe number of clicks to get where you need to go. Horizontal exceeds vertical display and listorder showed a trend toward more product focus: product/performance andnews/commentary grew in importance, i.e. “higher” in the pecking order, while“about” shifted to the right. A growingtrend was seen in sites providing immediate access to investor accounts,offering it outside of the main navigation and instead as a site function.

This trend toward simplification dovetails into the growinguse of mobile tablets and phones. That said, of the sites reviewed, less than20 had a mobile-optimized version of their site.

Content
…it’s the king, right?Well, as much as we’d like to think investors can’t wait to hear what we’ve gotto say, analytics show that viewers look for performance more than any othersection. In the smaller fund realm, this trend up-ticked from 30 to 38%, whilefor large firms, a slight drop was observed. This is not to say commentary isn’t of value. Clearly 75% (up from 69%)include it.

Displaying fund data, such as performance and portfolio information,is moving away from multiple tabs to simple scrolling pages by the overwhelmingmajority of firms. Keeping all fund performance on one page makes it easier forthe investor to do quick comparisons.

Social &Multimedia
Moving pictures causequite a stir when they were invented over a century ago. What better way tobring life to your story and management team? Today, virtually anyone can make avideo and get world-wide attention on YouTube. Well mutual fund companies are noexception. In 2011, smaller companies began to catch up with their largercounterparts, with 34% of them (up from 14%) using video on their sites. At thesame time, podcasts and RSS feeds bit the dust with smaller firms and declinedin usage by their larger counterparts.

Social media remains in its infancy. Surprisingly Twitter isin the lead across all firm sizes, with 50% of larger firms embracing it insome way, while only 16% of smaller firms are on board. Amazingly, about 60% ofthe large and medium firms are tweeting daily, compared to about 20% in thesmall firm group. (A whopping 40% of the small firms, however, have accountsbut make no posts.) Facebook and YouTube lagged behind, although there was anincrease presence on Facebook in the smaller and mid-size groups.

Branding
It turns out fundcompanies are a pretty conservative bunch. Fifty percent of the sites favorblue, followed by about 17% green, all other colors paling by comparison. Whatabout your logo? A clear trend emerged toward a distinctive method to writingyour name, with over two-thirds favoring “iconographic,” vs. type or illustration,regardless of firm size.

Use of photography by smaller funds took off, increasingfrom 38% to 78%. Firms are choosing better stock photos and recognizing thattheir people, offices and overall look can be a differentiator. Those that usednone dropped precipitously to less than 10%. Larger firms were already there,and held their own.

Is it right or wrong?
What’s right is what works for you. While these are notnecessarily best practices, the presenters did give us a quick glimpse intowhat’s happening with mutual fund web communication today – and lots to thinkabout. Bottom line, what does your site say about you? Is it professionallooking? Does it provide the information investors and advisors need? Is thereenough content – and do you update it frequently – to engage visitors and makethem want to come back? Can your grandfather figure out how to get around it?And can your granddaughter get what she needs on her iPhone? If you haven’tupdated your site since you built it in 1999 or even 2009, now may be the time.

by Marilyn Dale

The dreaded mutual fund wholesaler

2011-11-07T11:00:00.001-05:00

This video is creative, even though it's a little long. For those of you mutual fund wholesalers or managers of wholesalers, be sure to avoid using these sales techniques. Enjoy!

For mutual funds, is social media a game changer or just a game?

2011-11-07T08:39:00.001-05:00

Dustin Jacobsen

Attendeesof the MFEA conference in Chicagolast month were given some valuable insights into the importance of social mediastrategies and much more. Presenter Dustin Jacobsen, who leads Barkley ondigital, mobile, social and emerging technology projects, shared his insightsabout the pros and cons of a developinga robust social media strategy.

There’sno question social media has come a long away in just a few short years, butthe jury is still out on the benefits for the mutual fund industry. Along withJacobsen, we’ll be tuned in to see whether the pros will outweigh the cons, andthe compliance hurdles.

Here is his take on the Pros and Cons of social mediatoday.

Pros
Social Media has goneviral. Everyone’sdoing it. And the smart money is on that trend continuing.

Viral marketingstarts in the social space. A well-executed social media presence has thepotential for making your fund “go viral.” Can you afford to miss out?

Writing informativeblogson timely topics may be one of thebest strategies for leveraging social media. Today’s news cycle refreshes everyminute. Blogging can be a great way to attract instant internet traffic andpotential new investors by commenting on current events as they relate to yourfund.

Social Aggregatorsoftware is available. Free or inexpensive cloud-based software is availablethat instantly aggregates your activity on one social media site to all theothers. So at least you’re not posting the same thing ten different ways.

Cons

A Game of Cat andMouse. Thereare literally hundreds of social platforms. Only a few stand out in the crowdat any given time. Today, FaceBook, Twitter, YouTube and LinkedIn are the fourhorsemen. But watch out…FourSquareand Digg are on the rise.

No Free Lunch. Social Media isfast-paced. The most successful strategies require regular, daily activity.Tweeting can be a full time job.

A Popularity Contest.Thetrick is generating ongoing content which is necessary for attracting moretraffic, which you’ll need if you’re going to be “liked” and attract a crowd offollowers.

SocialMedia is like a penny stock.

Anysocial media strategy offers the potential for going viral, which is like thatrare home-run stock pick with a 1,000% return.

Butthere’s a much more practical, if less glamorous side to social media. Yourbest clients of tomorrow are using social media today. To start layinggroundwork and building life-time relations with tomorrow’s investors, socialmedia is probably a good place to be right now. According to Jacobson, “onlytime will tell.”

by Marilyn Dale

Gemini and SunStar to appear at NICSA conference

2011-11-07T08:37:00.001-05:00

Gemini's newsletter, The Gemini Weekly, is a good read this week.

It reminded me to sign up for the NICSA conference in Miami in February. I'll add that to my list.

It also linked to our recent posting that answers a subscribers question about how to handle your PR process when your portfolio manager continue to "politely decline" media requests.

Thanks for the plug, Gemini.

3 tips to get portfolio managers to say "yes" to the press

2011-10-31T09:00:00.001-04:00

Question: I run a midsized fund family in the mid-west. We get our share of interview requests from the media. But our problem is we seem to "politely decline" a majority of those requests because the subject matter either is not relevant or our spokespeople don't have time. I believe we should take these interviews, but I feel alone. Your help is appreciated. Head of distribution, midwest bank fund family.
Answer: This is an issue that many fund firms struggle with.

Working relationships with the media can provide a forum for you to talk about your strategy, how you are positioning your portfolio, beliefs on the market, proof that your experts are thought leaders, among other things. You can also use the resulting articles to add credibility in your other sales and marketing efforts.

Reporters calling you can be an important piece to an overall PR program. But in this case, it appears a reactive media relations process may be part of our problem. Reporters are coming to you because they know you, saw your fund in a performance chart, or that you own a stock in the news. The reporter likely already has a story in mind and will either get a quote from you or someone else.

If you continue to decline requests, that reporter will likely stop coming to you for information.

An important goal with the media is to build relationships with the right reporters at the right publications. They may or may not quote you now, but they will learn what you stand for so you can be included the next time they come to your with a more relevant story.

So here are three ways to fix the problem.

First, you can alleviate this issue or balance your media program by adding a proactive component to your public relations program. Have someone initiate more relevant interviews for your experts. Call on key reporters who cover mutual funds and investing and pitch how your story relates to the news. Some will be interested. Others won't. But continue to provide good ideas and you will get your share of coverage that is more on message. Just be sure your portfolio managers are aware, or even help you craft the pitch, and will be part of an interview if you get a good one. It would be a shame to generate some interest and have your expert turn that down too.

Second, make sure you have commitment from the top and the portfolio managers understand working with the media is part of their job description. We know your portfolio manager's number one job is to manage the portfolios. We also know how busy they are. But if someone with authority isn't reinforcing the fact that the firm's public awareness and visibility is also a priority, then you are missing out on third-party endorsements that can attract investors and strengthen distribution.

Third, better position the interview subject matter request for your portfolio managers so they say "yes." For example, I wouldn't expect a true bottom-up manager to comment about what the Federal Reserve will do over the next few months. But if the manager uses macroeconomic analysis in part of strategy, the issue should be fair game. And to almost guarantee your spokesman makes the time - I know in our industry we can't make guarantees - let him know the reporter wants to talk about how activities in the Federal Reserve will impact his portfolio and how he's positioning it. Even though the reporter didn't use this language in the request, positioning the topic this way will allow the portfolio manager to weave in his messages that he can't resist talking about.

If you have a question you'd like us to answer in a future blog post, email me.

And if you're a communicator that has to handle difficult investment professionals, check out the story by Susan Weiner.
by Dan Sondhelm

Clients win STAR Awards for excellent marketing

2011-10-28T13:41:00.000-04:00

Congratulations to several clients who last night won the 2011 STAR Awards for Excellence in mutual fund marketing and communications presented by the Mutual Fund Education Alliance (MFEA).

Awards go to:

RidgeWorth Investments

Top STAR Award for advisor communications
Printed Communications - advisor
Electronic Newsletter - advisor
Online Advisor Services - advisor
Online Innovation - advisor
Website - advisor
Multi-Media Ad Campaign - advisor
Wildcard -advisor

Artio Global Investors

Newsletter - advisors

Hennessy Funds

Special communications - retail

T. Rowe Price

Magazine - retail
Online Marketing Campaign - advisor
Ongoing Education Brochure - plan participant
Plan Conversion Communications - plan participant

Click for the top STAR Awards for Excellence in Overall Communications recipients.

Click for the full list of Excellence in Shareholder Communications recipients.

Click for the Community Investment Award recipients.

Stay tuned for more posts based on presenter comments.

Hennessy Funds Focuses on the Media

2011-10-25T16:30:00.002-04:00

Hennessy Funds holds a press event in New York city. Thirty reporters listened to president Neil Hennessy and his team talk about acquiring smaller funds and the way he's making money for his investors. Click here for a summary in MFWire.com and notice the plug for SunStar setting up the event.

A shout out to Gemini...

2011-10-24T09:59:00.002-04:00

A shout out to Gemini Fund Services for linking to my colleague Hibre Teklemariam's video on how to strengthen your website during challenging times in their weekly newsletter - the Gemini Weekly.

Growth strategies learned from SunStar client conference

2011-10-22T11:57:00.001-04:00

by Dan Sondhelm

SunStar Strategic sent heads spinning with distribution strategies and insight for smaller and midsized mutual fund companies. At least that’s what several of the CEO's, portfolio managers, and sales and marketing executives had to say about our Entrepreneur’s Conference held the first weekend in October.

Participants learned about Morningstar’s upcoming release of a new grading system – straight from the analyst team leader, Shannon Zimmerman. Starting in November, in addition to the coveted stars, funds will earn gold, silver and bronze accolades based on their analyst’s opinion of the fund’s ability to perform going forward.

Schwab joined in with two top executives from their Mutual Fund MarketPlace detailing a host of opportunities for fund companies to reach out to advisors. Most of our participants were literally stunned to find out about the ways to distribute their own information about webinars, conference calls, white papers and fact sheets through the Schwab system. Our presenters also provided a handy guide to education and events.

Participants also heard from Access Data, a firm that accumulates and scrubs the typically “hidden” information about which advisors have sold your funds. The need and use of this kind of data, among other strategies, was highlighted in a later session featuring a Q&A with two funds that have exhibited great success in their distribution efforts, Jensen Portfolio and Croft Value Fund, with a multi-pronged strategy.

Financial Planning Association was also represented by two members, a top RIA and a tenured wholesaler. Each fielded questions about how funds can be sold successfully, as well as talked about the opportunities for fund companies to meet advisors at local chapter events and meetings.

Having outside speakers at our annual conference is something new (and this conference was our 2nd in 2011, brought about by the need identified by participants in the earlier event). So, in addition to hearing from the industry experts, there was still plenty of time for the ever-popular open forum discussions, allowing fund companies to share their experiences, successes and challenges running a mutual fund firm.

Getting on Schwab is only the first step

2011-10-19T12:54:00.002-04:00

by Marilyn Dale

Michele Radcliffe

Somesay one of the first steps in having a good distribution strategy is to “get onSchwab.” If that’s the case, then what Chris Lynch, a Schwab third partyrelationship manager and Michelle Radcliffe, head of Schwab’s 3rd party fund marketing group,had to share at SunStar Strategic’s Entrepreneur’s Conference earlier thismonth should be of great interest.

But, you should havebeen there, because between my notes, their PowerPoint and a wonderful handyguide to Schwab education and event opportunities, you’d be reading for acouple hours.

So, here are the highlights:

Chris Lynch

Once on Schwab, get to know your relationshipmanagers for third party funds (one of a team of five). This person will help younavigate and understand what is selling and identify the key share classes andstyle. In addition to straight retail funds, Schwab also offers 529 plans, SMAsand retirement plan platforms. The relationship management team works withThird Party Asset Management firms offering their mutual funds at Schwab bybeing a focused point-of-contact for all Schwab-related items:

Strategydiscussions
Introductionsto product and service areas at Schwab
Contractualconsiderations for listing products on their platforms
Interactionwith the distribution channels at Schwab provides updates to you to enhanceyour distribution strategy
Introductionsto asset managers in other business segments at Schwab, including:

o Alternativeinvestments

o Separatelymanaged accounts

o Insurance

o Subadvisory

o ETFs

Get on “the list” – multiple channels andopportunities are available within the three mutual fund platforms—OneSource,transaction fee and load at load. And there are a number of recommended lists,which your RM can help you understand and navigate, such as:

*Seeyour Relationship Manager for details on requirements for eligibility.

**Includes~50 Single State Bond Funds

Note: Funds may also be offered to clients throughSchwab Managed Portfolios. Charles Schwab Investment Advisory, Inc. is anaffiliate of Charles Schwab & Co., Inc.

Did you realize that once on the Schwab platform, you canalso work with their clearing correspondents: Ameriprise, Curian, JPMorganClearing Corp. Mesirow, R.W.Baird, SEI and Scottrade?

Use the Resources
Once on Schwab,whether on a recommended list or not, digging into their standard reports willgive you a wealth of information. On the “fund map” website, you can view allthe advisors who are using your products – even daily if you want. In 2012,Schwab is introducing a benchmark report which will compare you to yourcompetitors.

Schwab also offers:

SchwabAsset Management Firm Central^TM (AMF Central) – an online resourcetool with easy access to: Frequentlyused reporting tools

RelatedSchwab business portals with information for doing business with Schwab
Linksto the focus list
Answersto commonly asked questions
Marketingopportunities and an opportunity to:
Postinvites to your upcoming events, like webinars and conference calls

InsightsPublisher^TM – share your intellectual capital to educate key Schwabaudiences and see what other companies are thinking. Here you can post:

Marketand global commentary
Whitepapers and research
Conferencecall and webcast postings
Fundfact sheets
Fundspecific commentary
Linksto other resource

Marketing opportunities

Education& Event Opportunities Guide, offers a collection of educational andsponsorship opportunities
SpeakersBureau for economists, market strategists, asset class subject matter expertsand value add consultant
Calendarof Marketing Opportunities and Educational Events
Participatein the Schwab user email, going to 15,000 bi-monthly

Be one of the best

Chris and Michelle finished their presentation by offeringthese “best practices” for working with Schwab:

Offeryearly updates for the research group
Consultwith your RM about key events and changes at Schwab
In-personvisits to Schwab headquarters add value, and offers help for building out your marketingplan and learning more about what otherareas might be useful to you
Usethe tools Schwab provides
Addyour fact sheets to the Schwab intranet
Postto the knowledge center on the AMF Central website
Meetyour local Advisor Services reps, who can introduce you to RIAs in their regions
Askfor introductions to enhance knowledge of things going on at Schwab
Runsmall events and invite Schwab to attend
Offeryearly updates for research
AttendIMPACT and exhibit if you can

PR Newswire: More than uploading press releases

2011-10-18T12:10:00.000-04:00

by Katie Bird

Katie Bird

PR Newswire may be your trusty go-to tool for uploading yourpress releases. However, you may not know they offer many other services thatcan bolster your distribution efforts.

For starters, there may be some additional features you canemploy when sending out a press release. PR Newswire has their proprietaryMEDIAtlas microlist, containing target lists to be used as a supplement to wiredistribution, not as stand-alone distribution. They also have buy side/sellside and pitch lists available, as well as the option to customize your owntarget list. In particular, they provide a mutual funds list for $195.Individual prices for the different lists are available upon request.

Another valuable tool is ProfNet, designed to quicklyconnect reporters with expert sources. On ProfNet, you can post professionalbios which can be embedded in your news releases. In addition to Search Engine Optimizationservices, PR Newswire also allows you to post to SocialPost, which creates aquick tweet that will be sent out via the PR Newswire handle with a link toyour news release. Photos, files and links can also be included to enrich yourreleases.

Perhaps the most important addition to their services is thereporting feature. Without additional fees, these reports display who postedyour release on their site and from which publications the journalists whoviewed your release are from. You can even see who found you via a search engine.For easier viewing, these reports can be exported into PDF format.

Lastly, PR Newswire hosts multimedia releases organized byindustry; these can include photos, videos and links. Within the next year, thecustomer page will be revamped to integrate all of their services.

Click here to read how to avoid common mistakes when writing press releases.

Attracting your first $100 million

2011-10-17T12:12:00.002-04:00

by Marilyn Dale

Richard Clark

Every story has a hero. AtSunStar’s recent client conference, we called on Richard Clark, Director ofSales & Marketing, Jensen Investments, and Phillip Vong, Assistant VicePresident, Croft Funds, to tell us how their firms are heroes in the mutualfund 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 addeda third person to their outside sales staff.

Family-ownedCroft-Leominster contemplated closing their fund about five years ago butinstead decided to make a commitment and forge on. Today, the firm has $1billion 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 manageSchwab information. It’s like a game, getting, collecting and interpreting thedata – then following up.

Clark:Absolutely critical. We start by using all the free data feeds from the platformsto know who is using our fund. Next wecross reference this with data from RIA Database so we know more about ourclients both large and small and where the opportunities for new businesslay. Over the past decade, we realizedwe had very little information about our advisor clients at wirehouses andindependent 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 wasshocked. I found out that close to 8,000investment professionals were investing clients in our fund – I only knew about1600 of them.

SunStar: Any recommendations once you have data?

Vong:We can’t contact everyone so first I analyze the data and prioritize it. Thismay seem odd, but if I see three new advisors, one at $10,000 and two at oddamounts like $352,777 and $181,543, I’ll call the $10,000 one. My guess is the others are just transferringin 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, andI want to develop a relationship there. Of course, if I see the transferslingering a month or two, I’ll follow through there as well.

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

As far as platforms, it’slike an Easter egg hunt to figure out what’s available through the varioustrading platforms. It may take a whileto find the right person but just keep calling. You’ll eventually find the right person who can help you take advantageof their platforms.

Lastly, push your transferagents for data. If you are havingproblems finding the right person on a platform, check with your transfer agentor distributor to see if they can help.

SunStar: Do you take advantage of exhibiting atindustry 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 servesthree purposes, supporting those organizations that have helped us grow, seeingcurrent clients and prospecting for new business. Wemake sure we’re seen by the analysts, marketing and relationship managers.

We have tried a variety ofconferences in the past and will continue to try new ones in the future. It’s important to understand the focus of theorganization putting on the conference so you know which markets theyserve. If your target market is primarilyRIA’s, you wouldn’t want to pick a conference that focuses on the BD market andvice versa.

Over the past few years, wehave 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 anopportunity for a more personal relationship with financial professionals. Forexample, in Minnesota, we paid about $3500 and could participate in theirsymposium, golf outings and meetings. We also sponsor a wealthmanagement conference for members of the AICPA. We have a lot of CPA’s that use the fund sobeing a part of this conference made a lot of sense. Again, find those groups that align with yourinvestment approach.

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

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

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

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

Vong:We had a similar experience. You can see instant results when you are small. It’stelling 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 usethe stories proactively to build credibility with advisors?

Vong:We get the digital reprints for all profile stories and disperse them to ouradvisors. 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 toputting out two to four white papers a year. This allows us to control themessage more. We post our quarterly updates and newsletter to our website aswell as an email to clients and prospects. We also add them to the Schwabsite and are a research partner with Littman Gregory.

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

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

Vong:We do quarterly conference calls, but we found people don’t want to hear aboutthe fund. We’ve moved to a “topic of interest,” such as a recent webinar aboutthe water industry – of course we tie it to our fund. On our first call, we hadabout six participants…and three were probably from SunStar. We did learn,however, to be careful about where you publish the call in number so youattract 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 sayI want to “talk to the guywho bought our fund because we are having a ‘private’ conference call and onlythese special people are being invited"... I'm not having a specialcall....but this really works. There maybe 10 people in the firm and I need to know which one used us. When I reach himor her, I say thank you and ask how they heard about the fund and whatimpressed them about it. I strongly encourage them to talk to a Croft portfoliomanager.

Clark:My initial contact is email. The feedback I’ve gotten about calling is advisorsare too busy, getting calls all the time. I usually introduce myself, myinternal, provide the relevant contact information and let them know what informationthey 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 toand 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 Fundhave been discovered! What’s next?

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

Clark: Continue to tell the story, continue toservice those already using the fund and continue to explore new areas ofgrowth. We have a lot of data now on ourB/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/peopleresponsible for the mutual fund wrap products. Getting to know the analysts or analyticalteam is crucial to gaining shelf space.

Does regional marketing have a place in the mix?

2011-10-17T12:02:00.001-04:00

by Katie Bird

If you’ve ever been curious about the benefits of launchinga marketing effort based on geography, then the presentation by Dan Lash of theFinancial Network and Rachael DeCosta-Martin of John Hancock funds would havebeen right up your alley. At SunStar’s recent Entrepreneur’s Roundtable, Dan andRachael provided tips to help get funds in front of advisors through theFinancial Planning Association and regional wholesaling.

Financial PlanningAssociation Sponsorships
With nearly 100 FPA chapters nationwide, plenty ofsponsorship opportunities are available. Dan noted that his chapter’s membersare primarily IBDs and RIAs, but not many wirehouse advisors. The Chapter issponsored by approximately 20 sponsors at an annual fee of $2000-$4000. Mostsponsorship commitments last from two to three years.

Both Dan and Rachel agreed your sponsorship dollars andpersonal networking at Chapter events and meetings can pay off when you aretrying to get appointments at member firms. In addition, there may beopportunities at meetings to give your “commercial” for your products.

To take the best advantage of your sponsorship, Rachael andDan agree it’s critical to be engaged: participate in speaker presentations,join committees, and be sure to mingle with advisors, not other sponsors, atevents.

Regional Wholesaling
Rachael had a lot to share as an experienced wholesaler. She recommended bi-annual visits to sell yourfund, noting advisors don’t need or have the time to hear your spiel everymonth, but appreciate it when you have timely information. She recommendedreaching out to analysts if the target firms have them, because unfortunately,most advisors will turn you down every time. You can find these analysts byvisiting advisor websites, sec.gov, RIA websites or by calling the firm’sreceptionist.

To make sales meetings productive, Rachael recommended herfavorite – the iPad. “iPads are invaluable to wholesalers,” she said. She hashers loaded with Market Metrics, which analyzes which companies are using whatmutual fund families and asset classes, as well as Active Share, developed byYale professors, which predicts future fund performance.

Another useful tactic is for your wholesaler to work withcompetitor wholesalers in the field, which Rachael does often. As a result,she’s been able to co-sponsor events and garner introductions to key advisors.

Growth Opportunities
Perhaps an overlooked road to growing your firm is outrightacquisition. Dan’s grown his own RIA firm by actively seeking other RIAs whoare ready to move on or leave the business. This strategy could be applied inthe mutual fund world as well.

The speakers also mentioned that advisors in many RIA assetallocation models are typically replaced every 3-5 years as part of their duediligence process, so creating a relationship over time can pay off. They definitely believe getting onto platformsis the way to go, and hiring wholesalers is a good idea.

Rachael suggested working with a PR firm to create astrategy around marketing your firm, as well as utilizing some paidadvertisements.

The message our conference participants got was loud andclear: Regional sponsorships and a geographic approach to wholesaling supportedby a strategic marketing plan will provide relatively inexpensive, efficientopportunities to put your fund’s name in front of advisors.

Morningstar: positive flows, but not out of the woods yet

2011-10-17T11:34:00.001-04:00

Morningstar,Inc. (NASDAQ: MORN), a leading provider of independent investmentresearch, today reported estimated U.S. mutual fund and exchange-traded fundasset flows through September 2011.Long-term mutual fund flows turned positive in September for the first time inthree months with inflows of $3.8 billion.However, that did not necessarily signal positive sentiment, as inflows weretepid across most asset classes and U.S.-stock funds experienced additionaloutflows. Furthermore, outflows from money market funds no longer appear to beflowing into long-term mutual funds. For the year to date, including another $14.1 billion in September, investorsredeemed about $70.0 billion morefrom money market funds than they added to long-term mutual funds. U.S. ETFs,which have seen just one month of net outflows in the last 12 months, added $4.1 billion in September. Nevertheless,total industry assets dipped below $1.0 trillionin September for the first time since December 2010.

Additional highlights from Morningstar'sreport on mutual fund flows:

While U.S.-stock funds continued their run of outflows, losing another $6.9 billion during the month, September was the best month for the asset class since May. However, with the exception of large-blend funds, the eight other major domestic-equity categories all suffered outflows.
International-stock funds saw positive, yet modest inflows of $3.2 billion. Diversified emerging-markets funds again accounted for the majority of these inflows. The category recorded inflows of $2.7 billion, its greatest monthly intake since March 2011.
Taxable-bond funds bounced back in September with inflows of $3.5 billion after shedding $12.0 billion in August, but this monthly inflow is well below the three-year monthly average of $16.1 billion for the asset class.
Municipal-bond funds enjoyed their best month in nearly a year with inflows of $1.7 billion.

Additional highlights from Morningstar'sreport on ETF flows:

For the second consecutive month, taxable-bond ETFs had the strongest inflows of any Morningstar ETF asset class, collecting $5.0 billion.
Behind taxable-bond offerings, international-stock ETFs, with $2.4 billion, realized the second-largest asset-class-level inflow in September.
After managing inflows of just $394 million in August, U.S.-stock ETFs gave up $5.3 billion in September. Four of the five largest individual ETF outflows belonged to funds in the U.S.-stock asset class.
Commodities ETFs experienced modest outflows of $200 million in September.

To view the complete report, please visit http://www.global.morningstar.com/septflows11.

What do financial advisors read?

2011-10-11T13:34:00.005-04:00

According to the recent Wall Street Journal survey of independent financial advisors and RIAs, the following publications were most often read by financial professionals.

The Wall Street Journal
Financial Advisor Magazine
Financial Planning Magazine
Investment News
Journal of Financial Planning.
Money
Kiplinger's Personal Finance
Smart Money
Forbes
Investor's Business Daily
Bloomberg Markets
Bloomberg BusinessWeek
Fortune
The New York Times
Financial Times
USA Today
Time
Newsweek

This survey was sent to me in an email by Financial Advisor Magazine, which ranked #2 on the list. If any of our readers know how to locate a copy of the survey, please email me the link. I will link to it.

Strengthening Your Website During Challenging Times

2011-10-11T11:50:00.000-04:00

SunStar's Hibre Teklemariam provides advice on mistakes fund firms make on their Websites and how to build a Web presence that gets investors attention.

Do you know who your customers are?

2011-10-08T17:57:00.000-04:00

by Marilyn Dale

If you are like most small and medium size mutual fund firms, you probably don’t have a good handle on the majority of advisors recommending your fund to investors. So, how can you thank them, ensure they are up-to-date and create the relationships you need to ensure continued sales?

Recently acquired by Broadridge, Access Data, a company who specializes in identifying financial advisors, shared their thoughts and solutions at SunStar Strategic’s recent client conference.

The stats:

• Transactions occurring through a financial intermediary : two-thirds of the total
• Fund manufacturers: 685
• Investment products: 16,000
• Sales related people: 40,000
• Intermediary firms: 30,000
• Investors: 90 million

Enough data to make your head spin. And, if you are getting data feeds and reports from your transfer agent or some of the supermarkets, chances are the details are obscure and not actionable. So, what can you do and why should you care?

Distribution: With good sales reporting, you know who is doing business – down to which offices and what people – so you know where to deploy your sales people. You’ll have the information you need to compensate for results, pay distributors correctly, allocate firm revenue to states for income tax purposes and work consistently within market timing rules. On the Access Data dashboard, you can turn data into information you can act on:

• Analyze sales trends by line of business, sales channel, rep., product
• Identify sub account activity by firm through office, person
• Identify net asset and revenue flows by distribution channel and product
• Create profiles of financial intermediaries to see complete view of important clients
• Create a sales hierarchy by geography, firm, line of business, channel, territory, region
• View pie charts, such as geog maps by sales
• See top 10 reps by state, by product
• Monitor trending information
• See competitor penetration in your asset class
• Add sales data to your CRM system

Market Intelligence: Access Data can identify, at a branch level, your market share among funds in your category there and specifically who is holding your asset class but using a competitor’s product.

Knowing who your customers are lets you get out timely information they need. For example, one fund family that invests heavily in Japan was able to quickly email all the fund’s advisor clients in the wake of the tsunami and say “don't worry, here is what we are doing,” helping those advisors calm their investors.

With 20 some experts cleaning up exceptions every day, the database is always improving. Data is captured from covering mutual fund portals, b/d platforms, managed account platforms and defined contribution platforms. Even split tickets across teams are identified by team.

For smaller firms, finding out who is selling your fund – and who could be selling your fund -- is very compelling. It could help you set a strategic direction for targeting the right channels for distribution - RIA, IBD, wirehouses – sorted by geography, size or penetration to help you execute an efficient distribution effort.

A Glimpse into Morningstar, Straight from the Horse's Mouth

2011-10-08T17:42:00.000-04:00

by Katie Bird

Shannon Zimmerman

To many managers, Morningstar may seem like a nebulous entity destined to taunt those who haven’t yet attained a 5-star ranking. Surely you have pondered the methods behind the madness, perhaps muttered “where did they get that from?” at your computer screen.

At the SunStar Strategic Entrepreneurs’ Roundtable, Shannon Zimmerman, an Associate Director of Mutual Fund Analysis at Morningstar, provided a peek into the man behind the curtain, explaining how star rankings are achieved. He also revealed a new qualitative, forward looking grading system soon to be released.

Shannon began by explaining that Morningstar’s priority is to help investors make better decisions, since, “investors tend to gravitate towards good funds, but don’t necessarily put them together to build a good portfolio.” Aside from reminding investors to pay attention to the actual names of funds as indicators of what they do, Shannon noted that not every fund with a lower star ranking deserves it. Yes, you read that correctly. Because the star ranking is a backwards-looking achievement test, it may not take into consideration recently improved performance. If you are lucky enough to have a Morningstar analyst covering your fund, you’ll want to make sure the analyst precisely understands your strategy and process so there is no misconception. The analyst’s report is subjective in nature and may influence an investor’s decision.

But what is this about a new grading system? Starting in November, Morningstar will begin analyzing funds qualitatively as well – Shannon called it an “aptitude” measure. This forward-looking analysis will grade a fund based on what the analyst believes it is likely to accomplish. Rather than stars, funds will be branded with gold, silver or bronze status. Gold signifies the analyst has confidence that the fund will perform well, outperforming its category average in the future. Silver and Bronze will do well, too. (There will also be a neutral and negative grade). Starting in November 2011, 150 funds will be graded. The new reports, available to Morningstar subscribers, will also provide expanded data coverage. This comprehensive investor-focused system will be based on five core pillars:

1. Performance: Why does the fund behave a certain way in particular markets? Did it perform as expected? Is it consistent?

2. People: How talented are the fund managers? Are they invested in their own product? Are they aligned with shareholders? How talented are the analysts?

3. Portfolio: A glimpse into historical performance, fund literature, reports and prospectus. Interviews with managers are conducted to see if they are indeed following their stated strategy. Is the strategy consistent? Any signs of strategic drift?

4. Parent: What priorities prevail at the parent firm? Stewardship or salesmanship? Trendy new products just for the sake of gathering assets?

5. Price: Is the fund a good value proposition compared to similar funds sold through similar channels? The fund fee level is scored and the distribution channel in the mix is examined.

Not currently covered by Morningstar? Shannon also recommended how to get your fund on their radar. There is a six point list that could determine if your fund may be considered to be covered. Reader interest is key. He also suggested you reach out and start a dialogue with Morningstar about why your fund should be covered. Do you have a novel strategy? Are you a boutique shop that deserves attention? Or maybe you just accomplish great execution of a plain vanilla strategy. With 100 analysts worldwide and 4,000 funds currently covered, Shannon drove home the point that Morningstar’s mission is to help investors make better decisions through their opinions and products. There’s room for funds to benefit as well, because, as Shannon said, “if investors win, we all win.”

Massucci’s Take: Steve Jobs never missed a detail

2011-10-06T17:25:00.000-04:00

by Anthony Massucci

Anthony Massucci

Prior to joining SunStar, I was a reporter for Bloomberg News for 13 years, covering technology for most of those years.

I was moved upon hearing about Steve Jobs' passing. In his memory, I wrote about the first time I met him.

At the time, it was quickly apparent that Jobs was passionate about Apple's products and didn't miss a detail.

Click here for the full blog post.

Why you should target individuals

2011-10-05T18:28:00.001-04:00

by Kathryn Morrison

Kathryn Morrison

Which fast growing channel are asset managers ignoring?

Individuals.

Speaking on a panel yesterday at MFWire Influencers Summit in Boston, Carolyn Clancy, EVP, Fidelity FundsNet, said she is shocked at how few fund firms market to retail investors.

“Funds get 401Ks and Managed Accounts, but they miss retail,” Clancy said. Aaron Dillon, Director of Mutual Fund Products for TD Ameritrade, said the growing retail market is a game changer, noting that TD Ameritrade is selling billions of dollars in fund assets to individuals.

Currently, more fund assets in funds are sold by intermediaries than purchased directly by individuals. However, that trend is changing. The speakers suggested that marketing to retail may be less expensive than selling to 401K plans or through advisors. They also notedd that more funds are being bought by people doing their own investing.Clancy added that more than 80% of the funds sold on Fidelity FundsNet are sold online.

Older Americans own the majority of assets. These mature investors now need help in making smart investment choices. This trend suggests that education should be a major focus of mutual fund managers. Fidelity, Schwab and TDAmeritrade’s websites offer a full range of information and education to retail investors; web-based education can be an efficient, scalable tool. However, most fund companies have lagged in educating both their advisors and retail customers.

Dillon recommended that every fund group dedicate part of its website to managers talking about their strategies. He and Clancy agreed that the website should offer 2-5 minute videos of each manager talking about the stock selection process, what the portfolio looks like and more. Webinars and presentations should be posted on the website for use by individuals, advisors and the news media.

Education plays a critical role for advisors as well. The advisor market remains large and important with an over-proliferation of products, many of which are new. To keep up, funds need to do a better job of educating advisors who are being inundated with new products and help them navigate complex asset classes.

Want to launch a mutual fund? Learn from two pros

2011-09-30T15:48:00.000-04:00

by Marilyn Dale

James Dailey

It’s always eye-opening to hear our peers share. It helps to put our thoughts in perspective. James Dailey, CFA, Principal and CIO, TEAM Financial Managers, Inc. and Lead Portfolio Manager, TEAM Asset Strategy, and Bill Pekin, CFA, SVP Pekin, Singer Strauss Asset Management and co-portfolio manager of Appleseed Fund, answered the following questions and provided insights about launching a mutual fund at Huntington Asset Strategies Annual Client Conference in September. Their funds, Team Asset Strategy (TEAMX) and Appleseed (APPLX), were launched on 12/21/09 and 12/08/06 respectively.

What didn’t work?

• Trade journal ads were disappointing; they are difficult if not impossible to track and can be very costly.
• Conferences – you can’t just roll into town and expect everyone to flock to yoru booth. You have to be much more aggressive, planning and executing pre and post conference campaigns.

Most challenging, then and now?

• Managing a 40 act product is challenging and filled with rules. You have to keep a vigilant eye on compliance of all kinds.
• Employees. Do you want to train your own? Have you got the patience? Should you go to a third party for everything and anything from operations, accounting, wholesaling, marketing, even portfolio management? You have to talk to a lot of people to find those that fit your culture and are right for your strategy.
• Know if you want to manage money or a business, and get the right help.
• As an entrepreneur, know your vision of success. Do you want to invest in technology, deal with larger institutions? Figure out how you can deal with your own anxiety
• Being alert to the uncertainty of the regulatory environment
• Choosing and getting onto the “right” platforms is complex; your resources and energy are limited.

Great ideas?
• Be seen: go to conferences, call advisors in those cities and take advantage of meeting with them, visit large regional cities for a concentration of advisors
• Publish and disseminate white papers; be a thought leader.
• Launch with “enough” seed money, its simply hard to make a $20 million fund economical
• If you replicate and extend what you do as an RIA, confidence, recognition and existing client base should help you grow quickly
• Look for a market niche with little competition – figure out a way to differentiate yourself. Bring in people with a book of business to help grow your core
• Get a strategy and good business plan - have confidence you can do this
• Focus on what you can control. Some things you can’t, such as the costs of doing business on platforms

And, why did you start a fund?
James Dailey: It was a long time ambition of mine to run a mutual fund or hedge product. I view it as a big business opportunity. Our RIA is relatively small, yet we have a differentiable product. We certainly took a significant business risk, but our strategy fits well in the alternative space, which is getting a lot of attention in the current environment.

Bill Pekin: I’ve observed with my kids, when they are small, they have an innocence about the world. Sometimes ignorance and innocence can be a blessing. It’s hard to grow a local ria and hard to get your story out despite being successful. But, we thought if we took a slow growing, stable annuity business like the RIA and married it to a fast growing mutual fund initiative, it would enhance our business model.

And, why problems did you solve, and for whom?
• Added transparency; a mutual fund has far more transparency than an SMA.
• We can now accept smaller accounts that we used to turn down.
• Instant credibility for the SMA/RIA business – you’re covered by Morningstar, eventually rated, perhaps engage in more media coverage. You’re out there and getting known.

Why you should cool it with the corporate jargon

2011-09-29T16:36:00.013-04:00

by Melissa Murphy

I know you know what AUM, basis points, and ROI mean. You even know how to define ROI, P/E, yield curve, duration, and EBITA.

But do your clients and prospects understand?

The words above are used regularly by fund managers and fund marketing executives. Often, we don’t think twice about whether our audience will understand. Acronyms and jargon can lead to investor confusion and inertia.

In volatile market conditions we want investors to understand their investments, and the people managing them, more than ever.

Check out the article in Fortune on this topic, Why you should cool it with the corporate jargon - Fortune Management. And if you are interested in simplifying your story so your communications are understood, email us for information.

An Appealing Idea Does Not Necessarily Make for a Good Fund

2011-09-27T15:54:00.001-04:00

Over the years, mutual fund firms have come up with a wide range of funds focusing on specific investment ideas.

Remember the Golf Fund? How about the Death Fund? I removed the full fund names of these real funds to protect the guilty.

In a recent Morningstar article An Appealing Idea Does Not Necessarily Make for a Good Fund, the Chicago firm takes a look at some unique story funds and how they fared. Then it reminds investors to focus on an experienced management team, a logical strategy, and a reasonable price.

Highlights to better work with Schwab

2011-09-25T12:47:00.000-04:00

by Marilyn Dale

Bill Thomas

At the recent Huntington Asset Services Annual Client Conference, keynote speaker, Bill Thomas, former head of Schwab's mutual fund marketplace, shared his insights for how mutual fund companies can break through the web of wirehouses by participating in Schwab One Source, the NTF (non-transaction fee) platform.

Highlights:

Know and use your relationship manager as your resource. Each services about 100 accounts yet are under pressure to add new funds. If you have a good story with performance, you have an advantage. Don’t miss the opportunity. Last year, Schwab added about 2500 new mutual funds.
Understand Schwab operates in four silos: retail (self-directed), institutional, retirement, and clearing enterprises
Lobby to be added to the Select List. Ask for an opportunity to meet the research team. Tell why you are better. Also, look at the NEW institutional Select List.
Schwab has added an “advice-giving” program for private clients. These clients can buy into asset allocation models, which pull from the Select List.
Best opportunities may be the institutional side, which serves RIAs. Leverage yourself as a peer:
Consider participation in Schwab Impact annual conference participation and regional events and visits
Provide resources you already have, such as white papers, research and economic comments through the Schwab Research Center (ask your rep how).
Strive to be added to a recommended allocation model
Leverage the reporting to know and thank your customers
Take advantage of Schwab’s private labeled clearing business. Your funds may be available to advisors through these programs, often in your back yard. Ask your relationship manager to help you identify them.

In summary, Bill says if you have good performance and are ready to step up to the costs, then focus, know the players, and build relationships to get noticed.

Better to be safe than sorry with a crisis communications plan

2011-09-19T22:05:00.014-04:00

by Melissa Murphy

Melissa Murphy

Companies of all sizes allocate tremendous resources to building their brands, but very little thought and consideration is devoted to protecting them. Often, crisis situations are sudden, powerful and damaging, leaving organizations scrambling to determine and enact a solution. In a crisis, information is often incomplete and rational decision making is difficult. Having a basic crisis communications plan in place can mitigate the fallout.

In smaller fund companies, crises could involve regulatory issues, fund underperformance leading to significant outflows and the unexpected departure of a key executive. Crisis situations can arise under a variety of circumstances and can impact your organization by being directly involved or indirectly by industry association.

How did you handle the dot-com crash, the mutual fund late trading and market timing scandal, and the financial and mortgage meltdown in 2008? We want to know. Email us your thoughts.

There are five phases to a crisis communications plan: vulnerability assessment, rapid response planning, training, testing and maintenance and recovery management.

The breakdown goes like this:

1. Within the vulnerability assessment phase, executives must brainstorm to determine the top issues that could potentially impact the organization, the caliber of impact, as well as the prioritization and likelihood of each event occurring.

2. The rapid response phase involves developing a crisis team that should include key managerial executives, marketing and public relations executives as well as legal counsel. Spokespeople must be trained in advance of a crisis, contact information for crisis team members must be accessible and someone needs to be assigned to real time monitoring of mainstream and social media.

3. The training phase involves defining specific threats along with the development of architecture for crisis messaging. Basic messages for each key crisis scenario can be outlined as part of the plan so they don’t have to be created from scratch in the midst of a real crisis.

4. The testing and maintenance phase helps keep the plan fresh and updated. A crisis plan is not a static document and as such should be revisited periodically as business circumstances evolve, members of your crisis team change jobs or external factors alter the parameters for phases one, two and three. Smaller fund firms should aim to revisit the plan at least once a year.

5. The final phase of a crisis plan is recovery management. This aspect determines how to ratchet down communications as a crisis nears its end and potentially offers a list of marketing ideas on how to emerge from the crisis even stronger.

Crisis plans for smaller organizations can be brief and concise but it is critical to anticipate and plan for difficult situations. Even if you can’t fathom crises coming your way, it truly is better to be safe than sorry.

Feet on the street for smaller funds

2011-09-19T21:26:00.000-04:00

by Marilyn Dale

At Huntington Asset Services recent client conference, we heard from two third party marketing firms about trends in mutual fund wholesaling.

Tony Poleondakis

Tony Poleondakis, Sales Director, Piedmont Capital Distributors, shared a great analogy that we paraphrase here:

Imagine you’ve invented the best ketchup on earth; it’s absolutely amazing with French fries. And, let’s even say you got the local grocer to put it on the shelf, right next to Heinz. Chances are no one will buy it. Why? Because consumers don’t know your brand, they don’t know your story and they have no idea your ketchup is better. Unfortunately, no one walks through the grocery aisle sampling all the condiments. But imagine if the ketchup rep was right there, offering free tastes on hot fries.

Tony’s point was that even if you have one of the best mutual funds available, unless you’ve got feet on the street meeting with advisors and letting them know you, who you are, what you stand for and how you’ll help their investors, it really doesn’t matter how good your strategy or even your performance are. Performance isn’t enough, in fact “performance is only conspicuous by its absence.”

Tim Dolan

Both Tony and co-panelist Tim Dolan, Managing Principal, Dolan Capital Group, agreed: an advisor’s success is not really based on finding the best mutual fund. Rather, it’s about charming people to give them their money. And it’s up to you to help build relationships with those advisors and make sure they know you, what your firm stands for and your products.

Low-touch marketing isn’t enough. Virtually every fund is trying to get in front of the RIA community. There is information overload about mutual funds, separate accounts, research reports, compliance updates and more. So, to be successful, the panelists recommended the following:

Ensure you have some elements of a unique value proposition
Target advisors, not the home office. There may be conflicting agendas.
Know the costs and be prepared to commit.

Wirehouses require typically about 10 bps ($75,000 to $125,000). Know that Merrill Lynch, at $60 billion in mutual fund business, does about twice the volume of the next competitor.
Select lists may have additional “pay to play” charges.

Determine which channels are appropriate for your fund and find out what they look for. You cannot be all things to all people.

As a smaller fund, stay focused, be patient and focus on the sales agreements you have, not those you don't yet. Consider if you’ve really called on every “insert RIA firm name here” in “insert geographic area.”
Look for selling efficiencies. For example, with LPL you’ll spend a lot of “windshield time” going to 10 different branches, whereas with firms like Caderet, Grant, you may be able to see 20 people in one office.
Target the corner office. It will take just as much work on your part to develop a relationship with a $10 million producer as with a $1 billion one. Advisors in the $500 million group may be the friendliest to a boutique manager and have analysts on their teams to understand how you lower risk or improve performance.

Remember, today’s FAs are NOT money managers. The best FAs are asset gatherers who are measured on new clients and new assets.

Your sales effort needs to be consultative, leading with “how can I help you help your clients” or “help you grow your business,” not lunch and golf.
Provide educational materials they can use with their clients so they can enthusiastically retell your story.

Figure out who your customers really are -- chase down every trade. If you can't afford an outside sales force, at least respond to advisors who are using you by calling with a thank you. Send them regular updates, monthly fact sheets, and white papers. Remember the rule of thumb: it takes seven times more effort to get new client than retain an old one.

The market crash of 2008 was a good cathartic event. FAs and investors are questioning their assumptions and as a result, may be quite open to new ideas. As a result, managers with alternative strategies are of great interest. But many traditional managers disappointed, so this is also a great time to get out there and tell your story as well.

Bottom line, get out there yourself, hire internally or engage third party wholesalers to let FAs know, face to face, who you are, how what you do is different, and more important than ever these days, how you manage risk.

SunStar earns spot on Inc. 5000 list of fastest growing companies - 5 years in a row

2011-09-18T19:55:00.000-04:00

Inc. magazine just ranked SunStar Strategic No. 4771 on its fifth annual Inc. 5000, an exclusive ranking of the nation's fastest-growing private companies. SunStar has also made this list in 2007, 2008 , 2009 and 2010. The list represents the most comprehensive look at the most important segment of the economy—America’s independent-minded entrepreneurs. Click to see the full list of companies including financial services firms.
SunStar's Dan Sondhelm said, "We are thrilled to have earned a spot on this prestigious list again. We want to thank our clients who have continued to communicate with their investors during these difficult times."

About SunStar Strategic
With offices in Alexandria, VA, New York, and Chicago, SunStar works with over 40 name-brand and boutique institutional investment managers and mutual fund firms to attract and retain investors, strengthen distribution and build brands through structured news generation programs and smart marketing. SunStar knows the industry and the reporters who cover it, helping clients get the attention and recognition they deserve. In addition, the firm offers a virtual distribution program to communicate with financial advisors and other investors in a timely way that supports or substitutes for wholesalers on the ground. Visit our blog and Website.

About Inc. Magazine
Founded in 1979 and acquired in 2005 by Mansueto Ventures LLC, Inc. (www.inc.com) is the only major business magazine dedicated exclusively to owners and managers of growing private companies that delivers real solutions for today’s innovative company builders. With a total paid circulation of 712,647, Inc. provides hands-on tools and market-tested strategies for managing people, finances, sales, marketing, and technology. Visit us online.

Undiscovered Funds May Be Better Than Name Brand, according to Adam Bold

2011-09-18T19:43:00.000-04:00

The Mutual Fund Store's Adam Bold explains why some fund managers stay out of the spotlight and remain undiscovered. Despite the limited brand, he says they can make excellent investments. I agree.

Undiscovered channel to target at Schwab

2011-09-17T14:21:00.000-04:00

by Dan Sondhelm

Although most fund companies are on the Schwab platform, flows don't necessarily follow. That’s why it’s important to know how to navigate the Schwab platform to cost-efficiently get in front of their audiences who can buy your funds.

Bill Thomas

Most firms consider the retail, advisor, or even retirement channels. But don’t forget one undiscovered channel that Schwab offers.

Firms like JP Morgan, Baird, and SEI private label Schwab’s mutual fund platform for their own use. So if you are on Schwab, you are also on these firms that may offer opportunities to get in front of their customers.

According to Bill Thomas, former chief of the Schwab platform, who spoke at Huntington Asset Services client conference, “Schwab provides the back office plumbing to other firms. And that creates opportunities for you.”

Other firms that clear through Schwab include Scottrade, Primevest, Mesirow, Curian, and Ameriprise.

Sondhelm presented on distribution to Huntington Asset Services clients

2011-09-17T13:36:00.001-04:00

"Unrated funds have seen more flows than even 3 and 4 star mutual funds. So if you are newer, there is more opportunity than you may think to grow." That was one the messages that kicked off my presentation entitled, "Distribution Strategies for undiscovered Funds" that I gave to dozens of smaller mutual fund managers at Huntington Asset Services client conference in Indianapolis, IN recently.

Dan Sondhelm

Other presenters included Bill Thomas, formerly at Charles Schwab's mutual fund platform; Sonja Formato, Fidelity platform; Tim Dolan, Dolan Capital Group; Tony Poleondakis, Piedmont Capital Distributors, among others.

Kudos to Huntington's Jeff Young, Brian Blomquist, David Bogaert, and AnnaMaria Spurgin for pulling it off without any problems. Well, there was just one.

There was a computer glitch in the morning. The main laptop wasn't compatible with the large screen monitor. They substituted a second laptop, transferred the Powerpoint files, and when I began most of the slides and photos weren't there. And the video clips of clients controlling the interview to get their stories out, gone.

Good thing I brought a printed version of the Powerpoint slides.

Investors were concerned in August, according to Morningstar

2011-09-14T10:51:00.000-04:00

CHICAGO, Sept. 14, 2011 -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund asset flows through August 2011. Redemptions from long-term mutual funds nearly doubled to approximately $32.5 billion in August after outflows of about $17.1 billion in July. August marked the most severe mutual fund outflows since November 2008. U.S. ETFs collected assets of just $947 million in August following July's inflows of $17.2 billion. Although August's inflows were meager, U.S. ETFs have realized only a single month of outflows in the trailing 12.
Additional highlights from Morningstar's report on mutual fund flows:

• Despite August market volatility, U.S.-stock outflows fell to $15.5 billion during the month after redemptions of $22.9 billion in July.

• As an indication that risk aversion has spread to fixed income, investors pulled $12.0 billion from taxable-bond funds in August. Bank-loan and high-yield bond funds were hardest hit, with outflows of $7.3 billion and $5.1 billion, respectively.

• With assets fleeing all of the major asset classes during August, investors found refuge of a sort in money market funds, which saw inflows of $74.8 billion. This total was the biggest monthly inflow for such funds since January 2009, and partially reversed June and July's combined $150.0 billion in outflows.

• Modest outflows continued for international-stock and balanced funds in August. The asset classes experienced respective outflows of $2.9 billion and $2.3 billion.

Additional highlights from Morningstar's report on ETF flows:

• U.S. stock ETFs, which typically drive overall ETF flows, saw inflows of just $394 million in August.

• International-stock ETFs lost $5.5 billion during the month, the greatest outflow for any ETF asset class. This outflow also marks the largest monthly net redemption for international-stock ETFs in the past three years.

• Taxable-bond offerings, which added another $4.3 billion in August, saw greater inflows than any of the other ETF asset classes during the month.

• Commodities ETFs experienced outflows of nearly $2.0 billion in August.

To view the complete report, please visit http://www.global.morningstar.com/augflows11.

SunStar's next client conference focuses on distribution for entrepreneurial firms

2011-09-01T13:47:00.000-04:00

Fall 2011 Mutual Fund Entrepreneurs’ Roundtable

What: SunStar Strategic’s Mutual Fund Entrepreneurs’ Roundtable for firms owned and managed by entrepreneurs

Date: October 2-3, 2011 (Sunday 3PM through Monday at 1PM following lunch).

Location: Hotel Monaco, Old Town Alexandria, VA

Workshop fee: $375 clients/$475 non-clients (covers the cost of presenters, conference rooms, food and beverages). Participants are responsible for their own travel and lodging expenses.

This Roundtable is an opportunity for you to share ideas and learn from others how to attract investors and strengthen distribution. It will begin at 3PM on Sunday with three hours of discussions, followed by dinner on Sunday evening. On Monday morning we will have a half-day of discussions ending at 1PM following lunch.

Discussions include:
Experts from the major platforms: Getting onto the major platforms is something most fund companies do almost immediately following fund launch, but what then? How can you make the most of your new relationship? How do you navigate the platform to your advantage? And, what help or opportunities do the platforms have to help you reach their clients? You will hear key executives from some of the top platforms sharing best practices to gain market share.

Top financial advisors: Financial advisors are busy building their business. Meanwhile, more than 600 mutual fund firms and other firms with investment products are competing for their attention. You will hear several financial advisors discussing how they build their business, how they construct portfolios, how they conduct manager research, and how they want to communicate with you.

Distribution: If you are like most mutual funds, assets don’t flow as fast as you would like due to good performance alone. It’s likely you are using strategies to help you strengthen distribution such as internal or external sales teams, digital marketing, public relations, and advisor conferences. And don’t forget about your product including fee structure and share classes, among other things. What’s working for you? What challenges are you having?

Panelist information will be sent separately.

In order to hold rooms and meeting space at the Hotel Monaco in Alexandria, VA, we need to confirm a space reservation as soon as possible.

Please let us know if you plan to attend no later than Monday, September 12. Contact Dan Sondhelm at 703-894-1046.

Dan Sondhelm speaks on distribution panel at Gemini Fund Services conference

2011-08-31T22:56:00.001-04:00

From left to right, Dan Sondhelm, SunStar Strategic;
Oliver Pursche, Gary Goldberg Financial Services;
Matt Ackermann, JCPR; Dave Jurczak, Gemini Fund Services.

I had a great time speaking as a panelist at the Gemini Advisor Forum, Gemini Fund Services annual client appreciation event. This year it was held in beautiful Denver, CO.

Our panel focused on distribution for mutual funds using marketing and public relations. For smaller funds to better compete with larger firms, they should consider a proactive marketing and public relations program. Develop your story, tell it aggressively through media, and repurpose it through other channels such as your Website and social media.

Click here for the video.

Crisis Communication Recommendations for Financial Service Firms

2011-08-19T15:17:00.000-04:00

Another important blog entry with tips from our friends at Corporate Insight. This time on crisis communications recommendations for financial service firms. Click here.

Morningstar says fund outflows continued in July

2011-08-11T13:04:00.000-04:00

Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund asset flows through July 2011. July's long-term mutual fund outflows of $17.1 billion marked the greatest monthly net redemption since December 2008, again fueled by the flight out of U.S.-stock funds. The asset class shed $22.9 billion in July, the greatest outflows since investors withdrew $27.9 billion during the peak of the credit crisis in October 2008. U.S. ETFs saw inflows of $17.2 billion in July, building on inflows of $9.8 billion a month earlier. Total ETF assets have increased roughly 25 percent over the trailing 12 months.
Additional highlights from Morningstar's report on mutual fund flows:

• Combined June and July money market outflows approached $150.0 billion, as investor fears about the government's failure to raise the debt ceiling and a potential credit freeze likely led many to shift assets to the greater liquidity of savings accounts.

• International-stock funds shed $3.7 billion in July, but inflows of $1.3 billion into diversified emerging-markets stock funds curtailed greater losses. Foreign large-cap, world-stock, and moderate-allocation funds all sustained outflows of at least $2.0 billion.

• Taxable-bond funds collected inflows of $8.9 billion in July, while municipal-bond fund flows were relatively flat for the third consecutive month. Flows into the national municipal-bond categories continued to strengthen, while single-state categories again saw outflows.

• After interest picked up in June, investors fled government-bond funds in July. After contributing $1.5 billion to these funds a month earlier, investors pulled $1.3 billion from the three main government-bond categories in July.

Additional highlights from Morningstar's report on ETF flows:

• U.S.-stock ETFs collected inflows of $6.4 billion in July to top all other ETF asset classes for the second consecutive month.

• After outflows of $3.7 billion and $892 million in May and June, respectively, commodities ETFs reversed course in July and recorded inflows of $3.7 billion. Precious-metals offerings accounted for the majority of inflows into commodities ETFs.

• Taxable-bond ETFs made another solid contribution to overall ETF inflows in July, with $3.3 billion in new assets. The asset class has not seen a net monthly outflow since December 2010.

• International-stock ETFs built on June's inflows of $2.4 billion with inflows of $3.8 billion in July.

To view the complete report, please visit http://www.global.morningstar.com/julyflows11 . For more information about Morningstar Fund Flows, please visit http://global.morningstar.com/fundflows .

Publish a book - add credibility to your sales effort

2011-08-10T11:18:00.001-04:00

by Steven Bollinger

While most financial investment professionals have thought about or talked about the possibility of writing a book, I would like to tell you about someone who has followed through and finished his book.

Several years ago Daniel Prisciotta felt the need to provide an in-depth communication vehicle targeted to his high net worth client base. While the standard method of newsletters, speeches, TV appearances, and business journals has helped him build an impressive list of accomplishments, he still felt a quality book would help him expand his circle of influence.

Daniel’s publishing goals are not to sell millions of books. As a matter of fact most of the books he has distributed so far were sent out for free. His goal is to get the book into the hands of as many future and current clients as possible so he can help them defend their wealth. While the book is available for sale on the Amazon web store that will provide an additional revenue stream, Daniel realizes he will be the main source of his book.

Daniel’s book is a wake-up call to defend your wealth, offering case studies, scenarios and wisdom garnered from the author's twenty-five years of real life experience advising some of the wealthiest families in America...many of whom thought their affairs were in good order.

Published by a well-known book packager, Jenkins Group, this 275 page hardcover book has already proven to be a successful marketing tool by helping to bring in new clients and energizing Daniel’s personal brand within the Sagemark Private Wealth Services Group.

How to Leverage Reprints for Stronger Distribution

2011-07-31T21:34:00.004-04:00

by Marilyn Dale

Marilyn Dale

Earning consistent recognition through media coverage is more than a feather in your cap; it can be the silver bullet in your marketing efforts. Working with the media, unlike other sales activities, attracts investors directly and provides a third-party endorsement that can be reused over time to add credibility. Repurposing that coverage on your website by providing links to video interviews or online articles, posting PDFs and having hard copy reprints available to share with prospects or at conferences compound their value.

To leverage press in these ways, articles that mention your mutual fund by name or that you plan to link to on your fund website must be treated as advertising for compliance purposes. Below, we’ve outlined the general steps you need to take to ensure all your i’s are dotted and t’s are crossed when republishing press mentions. Be sure to check with your own compliance experts for their guidance and approval. And the rules for leveraging reprints in social media are changing. We will have more on that in a later article.

Here’s a good checklist to get you started:

1. Seek reprint permission and pricing from the publication – sometimes necessary even for a web link.

2. Prepare the article for compliance review, attaching all relevant disclosures and performance, if needed. Articles that mention holdings typically require disclosing the percent of that holding in your portfolio. Where performance, rankings or ratings are mentioned, there will be the need for standard performance for your fund and the comparison group(s). The FINRA rules spell out the requirements, and interpretations by compliance professionals change from time to time.

3. Submit the article with disclosures to your compliance review entity. In our experience, most are willing to help you find a way to use the article; however while some publications are willing to allow you to use just excerpts or to remove a sentence or two, many are not. In those cases, posting just the title and publication can still help your fund build credibility.

4. Respond to any changes requested by compliance with new/updated information.

5. Purchase the article from the publication by completing their contract or order form.

6. For print, finalize the order indicating quantity, color vs. black/white, shipping and billing information. Disclaimer, highlighting, company logo and contact information can typically be added for an additional charge.

7. For web posting: receive a PDF of reprint or a designated URL for the reprint from the publication and submit it to your Webmaster to be posted with instructions that include:

a. All disclosures as approved by compliance and whether they need to be on a jump page or at the bottom of a specific page or two where the listing will be.

b. A link (url) to article or PDF of reprint. In the event the article in its entirety is not approved by your compliance professionals, consider a “dead” link, which is showing the http://www address for the article, but not actually providing a link. Many compliance professionals will allow this.

c. Properly sized screenshot in jpg format

d. Directions for which page(s) to post the media listing (i.e. Home page, News page)

e. Specifically what the listing should say, such as:

-Home Page: John Doe featured in MoneySmarts – May 19, 2011

-News Page: John Doe featured in MoneySmarts discussing his views for ongoing economic recovery - May 19, 2011

f. Indicate if any existing “older” listings on home page should be removed from home page but remain now only on News page

g. Review the web page and resubmit it to Compliance for final approval before going live

This process is not “hard,” but it can be very time consuming and at times frustrating, since FINRA comment letters your compliance professionals receive regarding other fund company submissions may influence, and seemingly change, their opinion on a current submission. But no pain, no gain. There is no price to be put on a great story in a credible publication and repurposing these pieces greatly multiplies their worth.

If you earn the press coverage you deserve, but don't have the time to leverage it in your other sales and marketing efforts, let us know. Maybe we can help by managing your reprints. Email me for more information.

Hiring a 3rd party wholesaler: worth the effort?

2011-07-19T09:18:00.000-04:00

by Katie Bird

Katie Bird

As a mutual fund manager seeking ways to grow your fund, you may have considered working with a third party wholesaler. It’s a big decision, no doubt—putting your fund’s reputation in the hands of someone else can seem daunting. However, you should think of a third party marketer as a teammate, and if you do your homework and ensure the distribution group’s goals align with yours, it should make for a harmonious team.

To help you make the best decision, we went straight to the source and spoke with two wholesalers. Ed Oberholtzer is President and Relationship Manager for Foxhall Capital Management and has been an expert in the distribution industry for over 30 years. Russell Adams is Founder and Managing Director at Piedmont Capital Distributors, a recently launched national marketing firm focused on the needs of boutique and middle-market asset managers.

Is third party marketing a good fit for your firm?

Both Adams and Oberholtzer agree that just about any firm should consider a third party group. As long as your firm has a successful operating history and is ready to embrace the challenges associated with third party distribution, Adams feels you can surely benefit from the partnership.

“Managers need to get a sense of the firm’s capabilities and what channels they are most proficient among,” Adams advises. You need to be sure the marketing firm specializes in your audience’s channels. If their presentation falls on deaf ears, it will do you no favors. While many third party distributors have some experience in several different channels, Oberholtzer notes that it’s unlikely you’ll find one individual who can call himself an expert in every channel. Also, check to see if the firm is already promoting a fund similar to yours. “You want to have a thorough knowledge of what the group has on their plate to distribute,” says Oberholtzer. It’s definitely not a recipe for success to have to compete with a fund they are already marketing. However, Oberholtzer points out that there is an advantage in hiring a third party group that promotes several fund classes to ensure their breadth of expertise. The more compelling stories they have to tell, the more likely they can get in the door to sell your fund. “I want to look for other good products for my product to sit beside,” he adds.

How important are references?

Making the best selection requires you to pull back the curtain and take a close look at the company. Oberholtzer suggests requesting a list of other firms doing business with them and calling everyone on the list for personal references. He advises speaking with former employers and personally checking the broker-dealer registration paperwork of every candidate. Adams agrees and believes that as a manager, you should commit to regular conference calls and some joint calls with the wholesaler. In his opinion, an actively engaged manager is essential for the team relationship to excel.

What do you look for in a candidate?

When seeking a wholesaler who really stands out, Adams looks for individuals who have several years of experience and proven success working for top names in the industry. It is wise to search for people with existing connections to financial advisors and a variety of firms. Most important, Adams says, is an individual who is keenly interested in working independently.

To ensure both parties hold up their end of the bargain, be certain the contract includes a clear explanation of distribution activities and expectations of both the wholesaler and the manager. Include clauses that will help deal with unexpected situations, such as individuals leaving either party. Also, establish the ground rules for conferences and marketing, such as agreeing to who will provide what. Oberholtzer recommends stipulating exact standards of service, even menial details like how much time is acceptable on a phone call.

How do you get paid?

Determining how the wholesaling firm or individual will be paid is paramount to satisfaction on both sides. Tracking and paying only on fund flows from specific channels or firms visited by the wholesaler would be ideal. Because it is costly to track the origin of fund flows, using one of three more typical structures makes life easier on both parties. Oberholtzer explains that one common option is to pay an upfront amount that is a fixed percentage of the management fee of the fund, often in the in the range of 30-50 bps. As Adams points out, the expectations are agreed upon in the contract, holding both parties accountable in the case of an upfront payment structure. Adams also mentions a second option, which is to pay your third party marketer a monthly retainer. He says having a monthly financial obligation may serve as incentive for managers to remain active in their deal with the marketer to get the most out of their arrangement. Also, compensation based on performance enables managers to hold their marketers to a high standard of performance. Another structure Oberholtzer suggests is to pay both an initial and an ongoing fee. Keep in mind there may also be additional fees to consider, and should be ironed out in the contract. These may include fees for conference attendance or displays or registering your fund on key platforms plus other incidentals. Adams reminds us that there are no set guidelines for creating a fee structure, no rulebooks to follow—as long as you are specific in your contract, you and your marketing team can craft an agreement that suits everyone.

All parties need to work in harmony and cover all the bases ahead of time. As Oberholtzer says, “Success at this is a dance, and everyone needs to be doing the same dance.”

4 lessons for stronger email marketing

2011-07-19T09:08:00.001-04:00

by Katie Bird

Sending e-mails is something you probably do all day, every day. Subject lines and formatting may not matter much for this regular correspondence, but if you’re going to use e-mails in a marketing campaign to attract investors, some seemingly trivial details like this may make all the difference.

Since the subject line is the first thing your audience will see, we’ve selected a few examples (with permission) from a recent guide by Advisor Perspectives, who recently released a guide on how to compose the best dedicated e-mails. These are examples of the best and worst attempts.

Worst:

Explore a solution constructed to get clients back on the road.

It’s awkward, wordy and vague. The call to action is weak, and there is no immediate offer, such as a webinar or downloadable report.

How did we find tax-free income in an airport terminal?

Along with the baffling subject line, the text in this e-mail was a bit longer and more academic—not as reader-friendly. It also lacks a deliverable, but merely directs readers to visit the company website for more information. With such bland instructions, this email suffered dismal success.

Listing today: S&P SmallCap Sector Portfolios

While most examples have a few paragraphs of text, the focus of this e-mail was a giant graphic with confusing pictures and a rather boring chart that did not relay much useful information. The link to download an item was also small and not easy to see, making this particular message jumbled and puzzling for the reader.

Best:

Risk Management Lessons Worth Remembering: Credit Crisis White Paper from BlackRock

This subject line goes straight to the point – albeit much longer than most inboxes display. The body of the e-mail was short and free of chintzy graphics. It offered two items to view, which not only offers deliverables to entice your readers, but requiring them to click on a link to view the item allows you to track click-through rates.

A Critical Look at the Bond Bubble Debate—White Paper

This e-mail was brief and direct, making a quick read for the audience. It also offered a downloadable deliverable as well as links to follow the company on Twitter and Facebook.

Here’s what we learned:

• DO use simple, direct subject lines

• DON’T bombard readers with graphics

• DON’T use gimmicky words like “free” or “guaranteed”

• DO include a deliverable

Learning from other’s mistakes and successes is a great way to craft a dedicated e-mail that will garner the results you desire. By following some simple guidelines and taking advantage of e-mail programs that offer spam-checking and other useful tidbits, you’ll be ready to hit send worry-free.

Risk-aversion reigned for investors in June, says Morningstar

2011-07-14T17:47:00.000-04:00

Risk-aversion reigned for investors in June, says Morningstar in it's June report on U.S. mutual fund and ETF asset flows. The report shows long-term mutual fund flows turned negative in June for the first time since December 2010, losing $4.5 billion after May inflows of $22.6 billion. Investors pulled about $18.0 billion from U.S.-stock funds in June to mark the worst monthly outflow for the asset class since the peak of the credit crisis in October 2008.

Investors also lost their taste for credit risk, too, as they withdrew a net $6.3 billion from high-yield funds. U.S. ETFs saw inflows of $9.8 billion in June after outflows of $3.1 billion in May. Total U.S. ETF industry assets are up about 38 percent over the trailing 12 months.

Additional highlights from Morningstar's report on mutual fund flows:

• Investors redeemed about $41.4 billion from money market funds in June, the greatest monthly outflow for these funds since January.

• In June, the gap between active and passive flows reached its widest point—nearly $20 billion—since May 2009. Actively managed U.S.-stock funds accounted for all of June's outflows, while passively managed offerings saw inflows of nearly $1.1 billion.

• While international-stock funds, with outflows of $1.3 billion in June, did not suffer as much as their U.S. counterparts, several categories within the asset class took a beating. World-stock funds, for instance, have endured outflows in 23 of the past 24 months.

• Flows into taxable-bond funds dropped to $11.9 billion from about $20.8 billion in May, with most of these redemptions coming from high-yield offerings. Municipal-bond funds continue to turn the corner, registering inflows of nearly $1.0 billion in June.

Additional highlights from Morningstar's report on ETF flows:

• U.S.-stock ETFs had inflows of $3.3 billion in June to top all ETF asset classes. U.S.-stock ETFs experienced the second-largest ETF asset class-level outflow of $2.7 billion last month, second only to commodities ETFs.

• Investors added $2.4 billion to international-stock ETFs in June. Flows have changed direction almost monthly for this asset class, which saw outflows of $1.1 billion in May.

• Commodities ETFs realized the largest monthly outflow of any ETF asset class for the second consecutive month. With redemptions of $892 million, commodities ETFs were also the only ETF asset class with outflows in June.

• For the past four months, taxable-bond ETFs had contributed meaningfully to net U.S. ETF flows. The asset class saw inflows of $3.1 billion in June, its second-highest monthly inflow in the last 12 months.

To view the complete report, please visit http://www.global.morningstar.com/juneflows11.

For Conferences, Go Big or Go Home

2011-06-27T09:30:00.014-04:00

by Dan Sondhelm

Let’s say you’re looking for a way to grow your fund. You want to expand your Rolodex and meet more financial advisors to tell them about your products. If you were to shake your Magic 8 Ball and ask it how to meet your goal, it would likely instruct you to exhibit at a financial advisor conference.

Before you start scribbling ideas for your booth or rattling off giveaway ideas, you need to seriously consider what goes into attending a conference, especially if you want to get the most out of it. Conferences can pack a hefty financial punch, so we’ve compiled a list of pros and cons to help you decide if this is the right path for you.

First let’s start with the cons:

• Cost: It’s true, the costs can be daunting. Between travel, booth design, marketing, etc, you can easily rack up a bill in the tens of thousands of dollars. Prepare with a budget in mind.

• No Guarantees: While you have access to hundreds of financial advisors per conference, you may not make the right connections. Be proactive and “work” the conference—if you sit back and wait for advisors to find you in the sea of booths, you will probably be disappointed. Be sure the audience at the conference aligns with the audience you want to target.

• Time: Planning, participating and following up require an extensive time commitment. But the mantra of conferences is that you will get out what you put in, so be sure you are able to put forth the time.

Now for the pros:

• Making Connections: Taking advantage of face time is priceless. If you actively engage financial advisors who could be a good fit for your funds, you’ll be amazed at the strength of a face-to-face impression.

• Speaking Opportunities: These highly sought after opportunities are often included when you commit to exhibiting. Sometimes, there are additional costs. Either way, there is no guarantee of speaking because the conference producers select their presenters based on timeliness of the subject matter, advisor interest, among other things. If you do land a spot, however, it adds a great layer of credibility and is an easy way to ensure a captive audience.

• Education: There’s always something new to learn about the trends and best practices in the investment sphere. It’s a great chance to see what advisors are up to as well as educate them about your products. It also doesn’t hurt to see what your competition is doing.

• Growing Your Fund: This is a no-brainer. Conferences are an excellent way to meet more advisors and therefore grow your fund’s opportunity for growth. Bringing in more investors is the goal, and a conference is an excellent way to do it.

There are several major conferences every year. We’ve compiled a list of upcoming events for easy reference:

• FPA Experience 2011: This is the largest gathering of financial planning professionals in the world. It provides educational opportunities and covers a wide variety of topics. This year’s Experience is September 15-18, 2011 in San Diego.

• Schwab Impact: This is an invitation-only conference with RIAs and advisors to discuss key issues and meet with experts. This year’s conference is November 1-4, 2011 and will feature Tony Blair, William H. Gross of PIMCO and Charles Schwab himself, among others.

• TD Ameritrade: Typically in February, these national conferences bring in top-notch presenters to cover a variety of topics. Dates for 2012 have not yet been announced.

• NAPFA Experience: NAPFA hosts several conferences annually geared toward continuing education or specific subjects. The NAPFA National Conference will be May 14-19, 2012 in Chicago.

• Pershing INSITE: This conference is a must-attend for growth-minded investors and RIAs. Next year’s conference will be June 6-8, 2012. At this year’s conference, keynote speakers included George W. Bush, The RT. Hon. Gordon Brown, Richard Hoey of BNY Mellon and Bill Belichick of the New England Patriots.

• Morningstar: Share insights with leaders from the investment industry and discuss investing principles to sustain up and down markets. This year’s conference featured Bill Gross of Pimco, Larry Fink of BlackRock and others. It is typically held in June – date not announced yet.

If big conferences aren’t your cup of tea, many of these companies also offer smaller regional events. A more intimate environment has its perks, such as a greater opportunity for face time with advisors. Having less people to compete with allows you to forge stronger relationships and will likely give you more time to chat with each prospective advisor. Another advantage to a local conference is cost, as these typically have a much lower fee. These events are also good starter conferences if you are new to the game, giving you a chance to see what they’re all about before stepping into the larger crowd. One good example is TD Ameritrade’s next regional conference on October 27, 2011 in Washington DC.

Are conferences part of your marketing strategy? Which do you prefer? Which do you avoid? Any special tips you recommend? Please share with us in the comments section below.

Attending these conferences is an important part of a marketing strategy for some firms. If you are reticent about them, it’s a good idea to send someone from your marketing team to scope one out and get a feel for what and who is there before committing to exhibiting. While they can reap big rewards, they are not to be dealt with lightly. If you do your homework and are prepared, you should find advisor conferences to be extremely worthwhile. Treat them like a sports tournament—go big or go home.

For more information, check out 13 Tips to Maximize ROI at Advisor Conferences that gives pointers on how to get better results such as nabbing speaking opportunities, why you should stay in the exhibit hall even when advisors AREN'T there, and the best tchotchkes to give away.

Morningstar Reports U.S. Mutual Fund and ETF Asset Flows Down Through May 2011

2011-06-15T10:53:00.000-04:00

Morningstar, Inc., a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund asset flows through May 2011. Estimated long-term mutual fund flows reached $22.6 billion in May, but this was still the fourth consecutive monthly decline since inflows of $29.8 billion in January. After inflows of $23.3 billion in April, U.S. ETFs lost about $3.1 billion to outflows in May.
Additional highlights from Morningstar's report on mutual fund flows:

• U.S. stock funds recorded their first significant outflows of the year, as the asset class lost $4.5 billion in May.
• Although inflows have slowed, international-stock funds collected assets of about $1.5 billion during the month. Diversified emerging-markets equity funds accounted for the majority of these inflows.

• For the fifth consecutive month, inflows increased for taxable-bond funds. Investors added $20.8 billion in new money to the asset class in May, but with a slightly diminished taste for credit risk. Flows into municipal-bond funds were flat after six consecutive months of outflows.

• Following a steep drop in silver and other commodity prices, commodities funds fell more than five percent on average and experienced outflows of more than $500 million in May.

Additional highlights from Morningstar's report on ETF flows:

• Although three U.S. stock ETFs placed in May's top-five ETFs by inflows, the U.S. stock asset class saw outflows of $2.7 billion during the month.

• Outflows from international-stock ETFs totaled $1.1 billion in May after inflows of $6.8 billion and $7.1 billion in March and April, respectively.

• Commodities ETFs realized the largest outflow of any ETF asset class in May, as investors withdrew $3.7 billion. May's redemptions also marked the single largest net monthly outflow for commodities ETFs.

• Taxable-bond ETFs made a healthy contribution to overall ETF flows again in May. The asset class' inflows of $2.1 billion were second only to alternative ETFs, which also saw inflows of about $2.1 billion.

To view the complete report, please visit http://www.global.morningstar.com/mayflows11.

LinkedIn Proves Powerful for PR : PR News Online

2011-06-13T15:35:00.002-04:00

David Hattery

SunStar's David Hattery was quoted in PR News in a story about using LinkedIn as a tool for PR. Click here for the full article.

What share class should we offer?

2011-06-06T16:50:00.000-04:00

One question firms launching funds typically ask is what share class should we offer -- load or no-load?

The bigger question is who are your clients going to be and what type of fee structure do they prefer? The answer should lead your decision making to how you set up your fund.

With that said, "No-load share classes, particularly those without 12b-1 fees, have grown to become the single most important share class in mutual fund sales through intermediaries," according to a new study by Strategic Insight, a business intelligence provider to the worldwide fund industry.

Click here for the full report.

Spring cleaning for your marketing strategy

2011-06-01T16:02:00.000-04:00

by Katie Bird

Do a belated spring cleaning to refresh your marketing plan

As mutual fund marketers, when was the last time you took a close look at your clients’ demographics? It’s not surprising that most of your investors are probably men. As Karen Blumenthal explains in her recent article “Girls Just Want to Have Funds” in The Wall Street Journal, most women continually rate themselves as less confident than men in making investing decisions. Blumenthal goes on to explicate the potential negative implications of this trend, especially given that women typically earn less money yet outlive men. This means women need to build up their savings to look out for their future. However, women have their humility and caution to work in their favor as these traits lend themselves to careful investment choices.

While the article points out several differences between investing habits, there is one finding that is particularly useful for mutual fund companies to know: women are more likely to gather investing information from people, such as advisors, friends and family. This is a green light for those who are looking for fresh ideas to target potential clients.

As many married women feel investment decisions are mutual (three fourths of them, as Blumenthal’s article points out), it is important they are as equally informed about your products as men. To reach your entire target audience, you should begin to consider new avenues for marketing. For instance, you probably won’t find many financial advertisements in Vogue or Cosmo. Aside from ads, it is also a good opportunity for an educational article.

Even if you’re not trying to reach women specifically, it’s probably a good idea to re-evaluate your audience and how effective your current marketing strategies are. Update your use of technology—maybe consider putting an ad on Facebook or other social media sites. Try hosting your first webinar or attending a new trade conference. Do anything you can to generate word-of-mouth buzz about your products, which many consider to be the most valuable kind of marketing there is. There are a myriad of ways to gain different types of exposure, so do a little belated spring cleaning and refresh your marketing plan—get out the cobwebs and tactics that aren’t working and take a crack at new venues. A shiny new strategy may be just what your fund needs to draw in a broader audience.

5 rookie mistakes in press releases

2011-06-01T14:05:00.001-04:00

With so many press release hitting the newswire, it's no wonder most of them tend to not get the interest of reporters. Still, they have their place in a PR program.

They are archived so when reporters and others search for keywords, your release might pop up. Also, with distribution on the Internet, your release can get picked up on name-brand and niche Websites globally.

But don't make these mistakes when writing one.

5 rookie mistakes in press releases Articles

Best Practices from the Fastest Growing Fund Managers

2011-06-01T12:03:00.000-04:00

by Dan Sondhelm

SunStar Strategic and Strategic Insight, a mutual fund research and consulting firm, co-sponsored a study to identify the fastest growing small medium/small sized mutual fund firms in 2010 and first quarter 2011. In fact, 22 of the top 25 fastest growing firms overall were those who began the 2010 with under $5 billion in assets. Since firms of this size were not likely to have large marketing departments, we delved further into how they were able to achieve such spectacular growth in a year when many large equity funds experienced net outflows.

In the course of our research, three major themes developed: stellar performance, product innovation and creative communication. Let’s examine each one.

Stellar performance is often the first thing advisors and investors seek.
Much as “location, location, location” drives real estate, it should be no surprise that “performance, performance, performance” is a key factor in mutual fund success.

A prime example of performance-driven growth on our list is Jensen Investment Management, with $937 million of net inflows during 2010. Utilizing a selective screening process to focus its holdings on 25-30 companies, its flagship fund, the Jensen Portfolio, has ranked within the top decile of its Lipper Large-Cap Core classification over both the three- and five-year periods ending December 2010.

“Money finds good performers,” said Mark Travis, CEO of Intrepid Capital Management. Its largest offering, the Intrepid Small Cap Fund, has been the top-performing domestic small-cap fund across all three of Lipper’s US Small-Cap classifications (Value, Growth and Core) over the same three- and five-year periods (ending December 2010). Intrepid achieved 105% in total net new inflows in 2010.

In the fixed income area, two fund managers, Thompson Investment Management and Iron Financial, cited outstanding performance as well as specific expertise within their niche as important factors in their growth. They posted 83% and 75% in net new flows respectively.

Citing a slightly different tilt on the assets selected for the fund, the Thompson Plumb Bond Fund is a short-term fund that posted outstanding returns resulting in part from their use of BBB-rated securities, which Nedra Pierce said, “not a lot of fund managers use.”

Similarly, Iron Financial points to its expertise in the area of credit default swaps and other alternatives as a major factor in the Iron Strategic Income Fund’s five-star rating from Morningstar (overall and three years) in the High Yield Bond fund category.

Innovation enables fund managers to broaden their product line.
In addition to specializing within their asset classes, some of these fast-growing fund managers have leveraged their existing capabilities to create new opportunities.

Stone Harbor provides an excellent example of such innovation as they capitalized on their expertise within a specific sector (emerging markets debt) by launching the open-end Stone Harbor Local Markets Fund and the closed-end Stone Harbor Emerging Markets Income Fund. Together these two new funds accounted for 70% of their net new assets.

Similarly, Osterweis Capital Management launched the Osterweis Strategic Investment Fund. Leveraging the investment capabilities of the firm’s other two funds – the Osterweis Fund (equities) and the Osterweis Strategic Income Fund (fixed income), the Strategic Investment fund also capitalizes on increased investor interest in flexibly managed portfolios.

Two other managers cited increased demand from advisors and investors for funds which rely on the expertise of asset managers to diversify across a mix of asset classes. They are Intrepid, whose flexibly managed Intrepid Capital Fund’s net inflows increased sharply to $164 million in 2010, and Corbyn Investment Management, where Bill White describes their sole offering, the Greenspring Fund, as a “go anywhere, non-style box, alternative, low beta” fund.

Creative communication enables these managers to make their story known.
Getting the word out is especially important for small fund managers, and here we found a broad range of strategies.

Increased media outreach was cited by Jenson, which augmented its quarterly media tours in New York with additional media meetings in several major markets. Intrepid’s portfolio manager Mark Travis has been promoting his fund aggressively and told us, “I have spoken to anyone who wants to hear our story, kissing many frogs if you will, in person in New York, Washington DC, Boston, by phone or remote.”

Several mentioned regular participation at conferences such as Schwab and Morningstar to deepen relationships with advisors who already recommend their funds as well as introduce themselves to others.

Maximum platform exposure is the goal of several of our fast-growing companies. While they do little in the way of advertising and have no wholesalers, Thompson is one of several that make certain all their funds are on all broker-dealer and custodian platforms. When advisors see their unique niche in the fixed income space as well as their excellent performance numbers, availability is not a problem.

Not surprisingly, email campaigns, updated websites and other technology tools such CRM systems and databases are important resources employed by many of these fund managers to maximize their communications with advisors and investors.

But we also heard from fund managers including Corbyn who prefer what Bill White describes as a “rifle shoot,” catering to independent RIAs, even those with smaller assets under management. They build relationships by offering a personal attention and unique resources such as study groups to that sector of the advisor universe. Positioning themselves as a boutique asset manager, “not a brand name,” Bill says they believe that independent RIAs appreciate being able to offer a fund that isn’t available at the firm across the street.

In conclusion, small fund managers who want to accelerate their growth would be well advised to follow the examples of these fast-growing fund managers of 2010 and focus their efforts on achieving great performance results, developing innovative new products and employing creative communications strategies.

Gemini features sandcastle article in newsletter

2011-05-24T08:18:00.000-04:00

A quick shout out goes to Gemini Fund Services for including our "Growing a Fund is a lot like Building a Sandcastle" post from last week in their newsletter, The Gemini Weekly. Thank you.

Growing a fund is a lot like building a sandcastle

2011-05-20T15:50:00.003-04:00

The average rate of redemption of assets
over the last five years is 25% per year

by Dan Sondhelm

Summer is almost here, which means more outdoor activities like beach parties and swimming. No, this isn't another story about how to lose those last few pounds to improve your look in a swimsuit.

Instead, we are comparing strategies to build a sandcastle and grow a mutual fund.

This comparison was first developed by Bob Auer, president of the SBAuer Funds, in April when he heard interesting data from a presenter at our annual SunStar Conference for Fund Entrepreneurs Conference.

Consider this:

Sandcastles require strategy, patience, and persistence. Though the materials involved are very basic – sand and water – the correct mixture of each element is crucial to building a durable sculpture. Selecting a spot on the beach to build your sandcastle is equally as important because you need moist sand to hold the proper form, but you don’t want it too close to the water or the high tide and waves rushing in will wash away all your hard work. Even so, over time, this is exactly what nature will do. So, you need to continue adding sand and fortifying your castle as wind, waves and weather erode your castle.

The same is true if you manage a mutual fund. According to the Investment Company Institute, the average rate of redemption of assets over the last five years is 25% per year; slightly higher for taxable bond funds than equities in general. And, if you’re losing 25% a year…well, just do the math. That doesn’t bode well for the sustainability of your mutual fund. The assets you have today erode through natural attrition such as:

Need the money,
Chase the hot sectors,
Rebalance, or
Like change.

New flows are needed, not only to grow, but just to maintain the status quo. Some firms are able to earn growth with good performance. But most have a strategy designed to attract investors and strengthen distribution by communicating the good news.

Click here for ideas on how to attract steady flows into your funds.

Publications pick up Strategic Insight/SunStar study on fastest growing smaller fund firms

2011-05-17T04:37:00.000-04:00

Several publications picked up the Strategic Insight/SunStar press release distributed recently about how 20 of the 25 fastest growing fund firms were smaller in size.

Click here for AdvisorOne, here for the MFWire.com, here for Money Management Executive, here for Investment News and here for Smart Money.

Complimentary educational session for small funds on distribution

2011-05-08T22:18:00.000-04:00

If your funds have less than $1 billion AUM, it's likely you face challenges in growing your funds and strengthening distribution.

Register for the Small Funds Network Open Topic Forum on May 26th at 1pm ET where FUSE's Neil Bathon, Huntington Asset Services Jeff Young, US Bancorp Fund Services Bob Kern, and I will lead a roundtable of smaller fund company executives.

This session is complimentary and is sponsored by the Small Funds Network.

For more information, click here.

Starting a mutual fund? MFWire provides list of 8 simple steps

2011-05-08T22:08:00.000-04:00

Want to get into the mutual fund business? So many advisors do in order to reach new audiences, benefit from scale, and leverage the national track record of a fund to grow seperate accounts.

MFWire.com compiled a list of 8 simple steps designed to get fund newbies on the right track.

Notice SunStar Strategic tops the list for step #8 -- to help get the word out. Other steps can be reached from that link as well.

Looking for a new strategy? Take to the air waves

2011-05-03T12:51:00.000-04:00

by Katie Bird

Glenn Wiggle

It’s not always easy to find an innovative and effective way to reach financial clients, but financial advisor Glenn Wiggle of Independent Solutions Wealth Management, LLC has done just that with his Financial Guys Radio Show, co-hosted by partner Mike Lomas. To build his brand and attract customers he employed the strategy of sending direct mailers; but eventually he realized that seminars were a more viable option because it allowed for better interaction with a larger pool of people. However, Glenn wanted to go further.

He knew of other local financial radio shows in the Buffalo, NY area that were successful. “The radio show light bulb went off,” he says. “If they can do it, so can we—and we can do it better.” While the show is currently the number one financial talk show in western New York and has held the spot for several years, things did not start out so smoothly. The show began as a strictly financial program, discussing stocks, bonds, mutual funds and more. One day, Glenn asked the opinion of a visitor who happened to be in the studio during the show. “She said it sounded like three advisors talking in a room. It was boring radio,” he says. It was time for a change.

By studying other popular radio shows, Glenn learned a very important lesson: “It has to be a good show first. I realized other shows made it entertaining, so I decided we needed to use different topics to get people interested.” The ensuing change of platform created the top-ranking show we hear today. The current Financial Guys Radio Show covers a variety of topics, from hot-button political issues to interesting news and current events. “We make it a good show first, then pepper in financial questions,” Glenn says. The topics stick to a conservative beat and turn what’s going on in the political and local scenes into a discussion about finance.

Guest speakers and experts frequent the show as well. According to Glenn, they get regular requests for appearances from local politicians, money managers and business leaders from the community. Featured guests include Congressman Brian Higgins and New York State Assembly member Jim Hayes. Through the interactions with these guests and the listeners who call in, The Financial Guys have benefitted from widespread name recognition. With a recognizable name, Glenn explains that you can use it to your advantage. He says there are three key ways to utilize the exposure radio provides, such as leveraging it for news interviews. “We are the go-to guys. Other shows may take our clips and play them on other broadcasts for both TV and radio,” he says. The second and third factors are to use the show to increase your contact base and meet other business members of the community. “We meet people we wouldn’t meet otherwise—we get to know people in our town,” he says.

But perhaps the most important result of the radio show has to do with the business side of things. “We were at $20 million in assets under management when we started, we are at $580 million now,” Glenn says. The show accomplishes this by reaching the right people. The audience consists of 10,000-15,000 listeners age 25 and up. More importantly, the majority of listeners are baby boomers. “These are exactly the clients that we want, the people who are looking to retire,” he says.

Aside from the show bringing in clients and growing their connections with the community, Glenn enjoys having a platform through which he can discuss pertinent and entertaining topics. He says, “It feels good to be able to get on air and have an audience to speak to, it’s been a lot of fun. People recognize my name and say they love the show. We have great listeners and it’s been a great time.” While the show has been going strong for the past 12 years, it is about to experience some changes. “We are about to start a new show in Florida which begins the first Saturday in July,” Glenn explains. This summer, The Financial Guys Radio Show will also take to the Florida air waves, but will be the same format. Mike Lomas will stay with the show in New York while Glenn moves to The Sunshine State permanently. The two plan to call in to each other’s shows.

The Financial Guys Radio Show is a great example of thinking outside the financial world box. Creativity is an essential component of any outreach strategy, and Glenn’s show is one example of how it pays off. If you’d like to catch The Financial Guys Radio Show, tune into WBEN Saturdays at 2 p.m., or visit http://www.wben.com/ for live stream.

20 of 25 Fastest-Growing Fund Management Firms Under $5 Billion in Size

2011-05-03T12:27:00.000-04:00

According to a new study by Strategic Insight and SunStar Strategic, the majority of the fastest-growing fund management firms of the 12 months ended in March were small in size, having less than $5 billion in stock and bond fund AUM as of March 2010. For more information, contact Dan Sondhelm.

FOR IMMEDIATE RELEASE

PRLog (Press Release) – May 03, 2011 – Twenty of the top-25 fastest growing fund firms over the 12 months ended March 2011 had less than $5 billion in stock and bond fund assets under management as of March 2010, according to research from Strategic Insight, a business intelligence provider to the worldwide fund industry.

This finding is based on a ranking of the 25 fastest-growing managers of stock and bond funds during the 12-months ended March 2011 -- ranked by net flow growth rate, which is defined as net flows divided by beginning-period assets, a measure of organic growth (note: the list excludes the smallest fund managers, generally under $1 billion of managed assets).

The 10 fastest-growing fund management firms by net flow growth rate:

1. DoubleLine Capital (Net flow growth rate not material)
2. Global X management (Net flow growth rate over 12-month period >100%)
3. Stone Harbor (>100%)
4. AQR Funds (>100%)
5. ETF Securities USA (>100%)
6. Yacktman (>100%)
7. JP Morgan Chase (ETNs) (>100%)
8. Int'l Value Advisors (>100%)
9. ALPS Advisors (>100%)
10. Water Island (96%)

Smaller fund managers’ focused and specialized investment skills – and high-conviction philosophies – continue to garner tremendous appeal in certain areas of the marketplace. “The road to success among these firms highlights the unique capabilities of such fund managers and the continued demand for this type of skill among advisors and investors,” said Dennis Bowden, senior research analyst at Strategic Insight. “So the fact that smaller fund managers dominate the list of fastest-growing firms is not surprising.”

• Within the roughly $56 billion of total net inflows garnered by this group of 25 managers over the 12 months ended March 2011, a large majority of such commitments were to equity funds. In fact, nearly one-half of this total ($27 billion) flowed into US Equity funds, while International Equity funds attracted an additional $17 billion among our peer group over this period.
• This breakdown of net flows in favor of equity funds runs in contrast to overall industry trends, where Taxable Bond funds have attracted over $200 billion of net inflows over the 12 months ended March 2011 – accounting for about 60% of the industry’s $340 billion of total net deposits.

• Among our group of the 25 fastest growing managers, bond funds accounted for just $11 billion of total net inflows. More than one-half of such bond fund deposits came via DoubleLine Capital – the top-growing manager over the 12 months ended March 2011. In fact, based on Strategic Insight’s Simfund database, which has comprehensive mutual fund data going back more than 25 years, DoubleLine’s $5.9 billion of net inflows since the firm’s inception in April 2010 makes it the fastest-growing US mutual fund manager ever during its first year of operation (based on the amount of money raised from investors in the first 12 months after launch of the manager’s first publicly offered fund).

While such managers have traditionally found significant success among the independent RIA community, Strategic Insight’s ongoing research series focusing on the National Broker Dealer marketplace (leveraging the data of Coates Analytics) – National Broker Dealer Product Strategy & Distribution Trends – has also shown increased traction for many smaller fund managers among this large group of financial advisors as well. For example, Permanent Portfolio – managed by Pacific Heights (the 11th fastest growing manager captured in our preceding table) – ranked among the top-selling individual funds within certain National BD mutual fund wrap programs during the first quarter of 2011.

According to SunStar Strategic, a consulting firm that has advised Strategic Insight on this research and that works with many small asset managers to help develop their distribution and marketing efforts, this wider distribution through the major platforms has played a key role in recent growth for many small fund firms. “These firms have done a terrific job of working with the platforms, connecting with advisors and investors,” said Dan Sondhelm, SVP and partner at SunStar. “These smaller fund managers should be commended for their rapid growth despite the lingering risk aversion among investors.”

Many of the managers identified by the study focused on providing consistent web posts, and frequent white papers, press releases and emails in order to communicate their investment philosophies in up and down markets. “Particularly in difficult times, it is important that advisors and investors are reassured that their fund managers stick to their discipline,” Sondhelm added.

Beyond traditional mutual fund offerings, exchange traded funds (ETFs) have also experienced significant growth over the past several years. A number of the fastest-growing firms in our peer group specialize in ETFs (and exchange traded notes). In particular, strong net inflows to ETFs spurred each of Global X Management, ETF Securities USA, JP Morgan Chase and ALPS Advisors to rank within the top-10 fastest growing managers over the 12 months ended March 2011. Strategic Insight’s recently published report – How Financial Advisors Use ETFs – provides unique analysis of financial advisors’ use of ETFs within the National Broker Dealer community.

The rapid and unique growth of small fund managers is often overlooked amid the attention to large fund management firms that have helped drive the mutual fund industry to significant growth post-crisis. Globally, investors have deposited nearly $2 trillion of net inflows into stock and bond mutual funds since the start of 2009. In fact, by early May assets managed by the global mutual fund industry has reached an all-time record of near $31 trillion, eclipsing the prior record of near $30 trillion just before the global financial crisis. This rapid pace of engagement worldwide has served to reaffirm and strengthen mutual funds’ standing as investors’ preferred vehicle for prudent savings, investment and diversification.

# # #

Strategic Insight, an Asset International company, is a leading research firm for the mutual fund and wealth management industry, providing clients with in-depth studies, consultation, and electronic decision support systems.

Thank you to our friends at Gemini

2011-05-02T11:51:00.001-04:00

I want to take a moment to thank our friends at Gemini Fund Services for picking up our recent posting "A Posting is Worth 1000 Words on the Wild Wild Web," in the recent edition of their Currents newsletter.

Social Media is an invaluable tool that is not beyond the reach of investment companies despite the ever-tightening web of SEC regulation centering on the use of networking sites such as Twitter and Facebook. We provide some tips for investment managers to get the most out of a social media program.

Read the article and other newsetter content by clicking here, then clicking on "Currents Q2 2011."

Or you can simply go back to the original FundFactor post here.

Not your typical email marketing program

2011-04-25T14:33:00.000-04:00

by Dan Sondhelm

“They laughed when we launched a mutual fund…” So reads the subject line in a recent email from Rob Runett, Director of the Motley Fool Funds. He was referring to a columnist who called the Motley Fool Independence Fund the “Stupid Investment of the Week” when it launched in 2009.

They laughed? Stupid Investment of the Week? Not your typical introduction to a marketing message, is it? But surely one that catches the reader’s attention. And, once he has it, Runett goes on to boast, “Guess who's laughing now? Our shareholders!” as he describes the stellar performance achieved by their very first mutual fund.

Rob’s underlying message is clear throughout his email: Motley Fool Funds is a “different kind of mutual fund company.” Here are a few examples of how he communicates that theme:

How many mutual fund companies would actually agree with the columnist who had laughed at them? This one does: “Ouch! But in some small way, he was right. We hadn't proven ourselves.”
Many funds say they have a different approach, but Rob demonstrates it vividly with: “No specific mandate,” “No index hugging,” “And did we mention we get paid for beating the market?” “We don't promise that you'll make money with the fund,” and finally, “Are you ready to invest? Hold on!” followed by a lengthy description of who they DON’T WANT as investors!
No time to read a long email message? No problem! Click on the link to a video presentation and listen as he tells you the story.

As Rob is the first to declare, the Motley Fool Independence Fund isn’t for everybody, but many will enjoy (dare I say laugh at?) what he has to say about it. And isn’t that what good communication is all about?

Watch the video that the email marketing communication clicked to for yourself!

Selecting the Right Strategy for Growth

2011-04-21T09:58:00.000-04:00

Katie Bird

by Katie Bird

Finding opportunities to create growth for your funds can be as frustrating as waiting for spring weather to arrive. This is especially true if your efforts aren’t reaching the right audience.

For example, BlackRock recently announced its intention to double their retail business by 2014. While that may seem overly ambitious, BlackRock’s US retail boss Frank Porcelli explains their strategy, which is specific and channel-oriented. Just because BlackRock is the world’s largest asset manager doesn’t mean they can afford not to be choosy in marketing efforts.

BlackRock aims to double fund assets

In an interview with Reuters’ Aaron Pressman titled BlackRock aims to double U.S. retail funds by 2014, Porcelli says the firm has “identified U.S. retail as a strategic priority” and plans to double the existing retail business, which currently stands at roughly $300 billion. To accomplish this, Porcelli goes on to explain that instead of introducing new funds, the firm will increase his staff by 15 percent, along with boosting sales efforts to brokers and advisors.

According to an article in Investment News by Jessica Toonkel called BlackRock starts to flex retail muscles, BlackRock believes they will be successful because “advisory firms are looking to do business with fewer partners and the company can provide services across the board.”

Additionally, MutualFundWire’s Armie Margaret Lee explains that other tactics include enhancing their presence in the 401(k) market and creating customized investment products geared towards investors interested in separately managed accounts in How BlackRock Plans to Double its Retail Business.

Even though Porcelli is confident in his plan, it forces the firm to acknowledge their weaknesses. For instance, Toonkel’s article explicates that historically, BlackRock sticks to its benchmarks which hurts fund performance. As Morningstar analyst Kevin McDevitt says, “When you manage funds that way, it's hard to shoot the lights out.” The firm has also brought in new expertise to strengthen and maintain performance. It is this flexibility and self-awareness that is setting BlackRock on the path to success.

This scenario demonstrates a very important lesson for mutual fund companies seeking growth. To increase sales, you must identify your company’s strengths and weaknesses, as well as the distribution channels that are relevant to you. Figure out what sort of increased expertise would best help your channels, whether it’s bringing in new people or altering your marketing strategy. Picking and choosing specific strategies that are applicable to your fund style will bring you more growth than trying a blanket approach—techniques that work for big firms won’t necessarily have the same effect for boutique companies.

Morningstar Reports U.S. Mutual Fund and ETF Asset Flows Through March 2011

2011-04-17T14:15:00.000-04:00

Morningstar reported estimated U.S. mutual fund and exchange-traded fund asset flows through March 2011. The pace of inflows into long-term mutual funds slowed slightly to $27.0 billion in March from approximately $27.9 billion in February, due largely to a reversal in U.S. stock flows. The asset class saw outflows of $934 million in March after taking in roughly $26.1 billion combined in January and February. Inflows for U.S. ETFs rose to $7.4 billion in March after reaching $6.6 billion in February despite outflows of $3.3 billion from U.S. stock ETFs, which typically drive industry inflows.
Diversified emerging-markets flows, which have attracted a significant amount of attention since the financial crisis began in late 2008, highlight a striking difference in the way American and European investors express their appetite for emerging-markets exposure. European investors have a much greater proportion of their money in emerging markets than American investors and more funds to choose from to gain emerging-markets exposure. But Americans have been adding aggressively to emerging-markets funds in recent years, and are increasingly choosing to invest in them through passively managed products. Six years ago, actively managed open-end mutual funds and ETFs comprised 79% of diversified emerging-markets assets, but today make up 53%.

Additional highlights from Morningstar's report on mutual fund flows:

• Bank-loan funds, with inflows of $4.3 billion, drove the $18.0 billion that flowed into taxable-bond funds in March. Total category assets for bank-loan funds have reached $59.8 billion, surpassing the $41.2 billion peak reached in June 2007 by nearly 50%.

• Among U.S. stock funds, large-cap offerings lost about $3.2 billion across the value, blend, and growth categories, while small-cap funds enjoyed modest inflows of $791 million. However, investor preference for small-cap offerings hasn't held with international-stock funds, where large-caps acquired $3.6 billion in new assets versus just $306 million for small-caps in March.

• Municipal-bond fund outflows slowed for a third consecutive month, with less than $2.6 billion in March redemptions. Still, roughly $40.4 billion has vacated muni-bond funds over the last five months, which represents 7.8% of beginning total assets.

• Demand for alternative and commodity funds remained steady with $1.1 and $1.8 billion in March inflows, respectively. Money market funds saw outflows of $12.5 billion in March after inflows of $16.7 billion in February.

Additional highlights from Morningstar's report on ETF flows:

• Outflows from large-blend and large-growth ETFs accounted for most of the outflows from U.S. stock ETFs, as these categories lost $6.2 billion and $963 million, respectively. However, several categories in the asset class, including equity energy, natural resources, consumer discretionary, and consumer staples, saw inflows.

• After beginning the year with two consecutive months of outflows, international-stock ETFs saw inflows of $6.7 billion in March.

• Taxable-bond ETFs collected assets of $3.1 billion during the month, making a notable contribution to aggregate ETF inflows in March for the first time in seven months.

To view the complete report, please visit http://www.global.morningstar.com/marchflows11.

Ten Trends that will Reshape the Fund Industry

2011-04-12T12:07:00.000-04:00

Fund industry consultant Geoff Babroff looks into his crystal ball to predict the Ten Trends that will Reshape the Fund Industry. Learn some of his surprising predictions such as why fees wont continue to decline, at what point ETF growth will be capped, and why variable annuities may be the next threat to mutual funds.

Cincinnati gets social media workshop; Sondhelm panelist

2011-03-29T11:10:00.003-04:00

If you are in the Cincinnati, OH area on April 26th, I hope to see you at the 2011 GCMFA Distribution Workshop. The discussion will center around Mutual Funds and Social Media.

I will be a panelist talking about Integrating social media and other technologies to enhance your sales and marketing efforts.

Other panelists include Tara Myers, ALPS, who will talk about compliance and FINRA rules and Jeff Young, Huntington Asset Services will talk about social media opportunities for advisors.

The workshop will be held Tuesday, April 26, 2011
from 5:30 - 7:30 pm.

The Seminar is open to all employees in your organization, a benefit of your membership and participation in the Greater Cincinnati Mutual Funds Association.

Please forward this link to other associates who may benefit from participation (i.e. portfolio management, call center & transfer agent teams, marketing department, etc.)

Attending a GCMFA event provides financial professionals continuing education and the opportunity to interact and network with their peers who face the same daily challenges.

Program is Free to GCMFA members! $100 non-member fee.

Deadline for Reservations: April 19, 2011.

For more information, click here.

Social media: A post is worth a thousand words on the Wild Wild Web

2011-03-27T13:47:00.001-04:00

By Dan Sondhelm

Every post is worth a thousand words because social media has a way of creating its own feedback loop. It’s not so much what you say, but what others say about you. The goal is to create a buzz about your firm by getting your “fans” to talk about you.

Facebook global-branding manager Paul Adams uses the term “social design” to explain how employing the right social media strategy can help a buzz build naturally.

Want your fans to talk about you? Do this first.

1) Offer valuable information. One of the most effective approaches to building a social media following is to offer something of value to the community.

Whether on Facebook, Twitter or You Tube, getting your followers’ attention online starts with paying attention to them. Community builder Liz Strauss tweeted, "Know, love and serve the folks who love what you do. They'll do the rest. They'll even get other folks to pay attention, too.”

2) Offer commentary when you re-Tweet the news. Twitter has a 140 word limit per post. Think Headline News. Re-tweet popular topics with your own insights and commentary. Buzz words are picked up more readily by search engines, but to be a successful tweeter, your content needs to do more.

With tax time on everyone’s mind, Vanguard has been tweeting unique tax tips each day. Vanguard, the largest U.S. fund company, has a half-dozen authorized tweeters from different divisions, according to a news story in USA Today.

The company recently tweeted: Tax Day is 4/18 this yr, not 4/15. Postage for large envelopes goes up 4/17. Plan accordingly!

3) Social Media can be used to dynamically leverage your existing communications. Tweet about upcoming webinars, press coverage, media tours, etc. Work with your fund compliance people to approve a “template” post where you can simply slot in the publication and time as needed. If you’re broadcasting a webinar, post a link to register on Facebook. Later, post a link on Facebook to the recorded broadcast.

There are even RSS widgets which can automatically syndicate an excerpt from your latest blog entry into your Facebook page or your website. This saves you the redundant step of saying the same thing twice, while reaching separate audiences.

And, as soon as that CNN interview wraps up, make sure to post a link to the recording on Facebook, Twitter and LinkedIn if you are an advisor, not speaking as a fund manager.

4) Expand your network. Build a network on LinkedIn. Social media itself is all the buzz right now and is poised to continue its exponential growth. To help ensure continued growth for your firm, reach out to the next generation of investors today.

State Street Corporation has been in the Financial Services industry since 1792. Think they’re resting on their laurels? Find out on LinkedIn, which has recently launched a News Module that feeds articles where you are mentioned onto your company profile page.

Simon says “know the regulations”

Social media is an evolving arena. So, too, it seems, are the SEC and FINRA requirements for participation. Your compliance people can advise you specifically, but in general, as long as you have a good documentation system and adhere to pre-approval requirements when needed, you can take advantage of this new media rage.

American Century Investments navigates these waters carefully while still generating a buzz. Many of the company’s tweets and Facebook postings focus not on the company, but on social media itself.

One of the company’s recent posts: “56% of financial professionals agree that social media has ‘significant future potential.’ Up from 44% in 2010”.

Social media can be an excellent marketing vehicle when executed as part of a comprehensive marketing strategy. Facebook global-branding manager Paul Adams says, “Thinking about 'social design' should be embedded in everything we do, and not thought of in isolation. We should think about it the same way designers of electronic appliances think of electricity.”

From the largest mutual fund companies to small boutiques, whether old or recently launched, advisors and mutual fund companies are exploring the new frontier of social media. It’s evolving everyday and cannot be ignored. Yet, social media should not be considered a substitute for traditional distribution strategies; rather a complement that has the potential to strengthen your results.

Be alarmed when your alarm fails

2011-03-18T17:32:00.002-04:00

You may remember our recent blog posting, Don’t fall asleep, and 27 other tips to help you get more ink and air. This was a popular story for us. It chronicled top "do's and don'ts" for successful media interviews. The list was based on our experiences of working with our clients and from reporters who were nice enough to provide feedback.

Well, we added another to do to the list based on real life experience.

Earlier this week, I took our client to NY for his first media tour to meet and share his story with top reporters from major news sources. Our car company picked me up at 7:30am. Ideally we would have also picked up my client at his hotel at 7:45am to make our first meeting an hour later with plenty of time to spare. But he didn't come out of the hotel. It's not unusual for clients to be 5-10 minutes late. Typically we call on their cell phone and they quickly come out.

During the 1 hour and 15 minutes suspense, worry and concern was building. I called my client's cell phone 3 times, asked the front desk to call his room, and called his top officer at the headquarters to learn if he had heard from the boss that morning - who also texted the missing executive to see if he would respond.

My SunStar colleague arrived directly to the first meeting expecting to meet us there. When he didn't see us, he called me. I told him of our dilemma. He asked the building security if maybe our client checked in on his own and perhaps forgot we were picking him up.

Our driver offered his ideas too on where our very late client could be. "There was a recent story of a man bringing a lady back to his hotel room. She spiked his drink, he passed out and was robbed of his Rolex and is money. When his co-worker went to the room with hotel security, he was barely conscious and half dressed...."

Finally, he called me. Our client apologized and said to give him 10 minutes. Somehow, he looked quite dapper and acted very calm, given the circumstances.

On the way to our first meeting, which we arrived at a few minutes late to a still accomodating journalist, he admitted he was still asleep because he forgot to adjust has travel alarm for daylight savings time. So for the tip: Set your alarm correctly so you wake up on time.

What's the secret of your success?

2011-03-18T12:49:00.002-04:00

If you are the CEO or top brass of a smaller, entrepreneurial mutual fund firm, what is the secret of your success?

Is it:

A: Great leadership
B: Build a great product and investors will come
C: Unique story
D: Focus on the customer
E: Click here.

This video was sent to us by Bob Auer of SBAuerFunds.com. He says he saw this video live when he was 8 and vividly remembers it to this day. Now, he says, he gets the meaning.

2011 Mutual Fund Entrepreneurs Roundtable

2011-03-05T17:46:00.001-05:00

Do you run an entrepreneurial mutual fund firm? Do you want to share experiences and learn from others on a wide range of issues centering around distribution and growth?

Date: April 3-4, 2011 (Sunday noon to Monday 1:30 PM)
Location: Monaco Hotel, Alexandria, VA
Fee: $325 per person (clients) $450 per person (non-clients)

Fee covers the cost of presenters, banquet facilty, food and beverages. Participants are responsible for their own travel and lodging expenses.

RSVP Deadline: March 18, 2011. Email me for more information.

###

Welcome to SunStar Strategic’s third Mutual Fund Entrepreneurs Roundtable for firms owned and managed by entrepreneurs.

The 2009 workshop was attended by 11 executives from eight client companies, and the 2010 workshop was attended by 20 executives from 13 client companies. The participants enjoyed the format and all felt that they had benefitted from attending. Based on their feedback, we will be hosting our third roundtable in April of this year.

The first two roundtables were held in Houston, TX. This year we are holding the roundtable in SunStar’s hometown, Alexandria, VA, right outside of Washington, DC, and next year we hope to hold the event on the West coast. Our meetings will be held at the Monaco Hotel, a boutique hotel in the heart of Old Town Alexandria, surrounded by small shops, cafes, restaurants, etc., and only a few short blocks from the beautiful and busy Old Town waterfront. Alexandria is just five miles from DC, where the Cherry Blossom Festival will be in full swing.

This is an opportunity for you to share ideas and learn from others how to take your firm to the next level.

The 2011 Entrepreneurs Roundtable will begin at noon on Sunday with a half-day of discussions, followed by dinner on Sunday evening. On Monday morning we will have another half-day of discussions ending after lunch at 1:30PM.

Following are just some of the topics that have been suggested for the 2011 agenda. We would also be happy to consider topics that you would like to see discussed at this year’s event.

• The competitive landscape
• Influencing the influencers

• “Stalking” regional broker dealers and financial advisors

• New products

• Nuts and bolts of running a fund company

• Influencing the raters such as Morningstar, Lipper, etc.

In order to hold rooms and meeting space at the Monaco Hotel we need to confirm a space reservation as soon as possible. The hotel will need information regarding the number of rooms we expect to use, together with the number of nights.