Practical analysis for investment professionals
12 May 2020

Three Tools to Improve the Fund Manager–Client Relationship

The investor–fund manager relationship always seems to be in a state of flux. When markets are down, investors may start to think about making a change. When a new technology comes along, clients begin to wonder whether they can manage their own holdings on the cheap.

One piece of technology, in particular — the robo-advisor — is making waves in the wealth management industry today. The research firm Aite Group found that the total assets under robo-management grew by 15% in 2018, to $257 billion in total, and is projected to reach $1 trillion by 2023.

It’s easy to view new financial technology as just more competition, but it’s important to understand the market for meaningful financial guidance and superior management isn’t going away.

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The Manager–Investor Relationship

Technology, properly applied, can help initiate and improve your relationships with clients.

Three recent innovations stand out on that front.

The lessons and technology of online dating are now being applied to the investment manager search. Zoe Financial is emerging as the financial management equivalent of Match.com: Instead of matching eligible singles, it connects retail investors and financial advisers. How it works is quite simple: Its algorithm pairs consumers with their ideal advisers based on their traits and preferences. This removes some of the initial hurdles people encounter when looking for investment professionals: Getting started and identifying what they’re looking for.

Remote conferencing technology has also done wonders for the industry. You can now conduct face-to-face virtual meetings with people throughout the globe. Geography no longer limits your clientele. A computer and an internet connection are all you need to start a call and gain a client.

Podcasting is another great way to reach potential clients. You can host your own show or get yourself booked as a guest and broadcast your message worldwide. And the podcast is just one among many financial technology tools that can help you differentiate yourself from the competition, human and otherwise.

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Where to begin?

But with so many tech options out there, where do you start? After all, even well-established firms find it difficult to stay on the cutting edge.

Yet there are a few essential tech tools that can improve your business right off the bat. And they generally fall into one of three categories:

1. Performance-Tracking Software 

Gone are the days when private equity fund investors would wait until the quarterly conference call to find out how their investments were faring. Now they expect real-time visibility into their holdings — they want to be able to monitor performance whenever it suits them.

But it’s not just transparency investors today are seeking. Accessibility is also key. They want access on all platforms — desktop, mobile, and wearable. Luckily, third-party providers are constantly improving their software, so secure solutions are readily available.

And because it’s now an expected service, your clients and potential clients will want you to demonstrate how your performance as a fund manager compares to others.

If you’re not providing that transparency and accessibility, clients will certainly find someone who is.

Potential Options: DomoGrow, and Klipfolio

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2. Relationship Management Software

Customer relationship management (CRM) software is another important tech tool for investment managers. CRM does just what it says it will do: It manages client relationships and tracks leads and prospects.

CRMs store everything from a client’s contact information to their birthday — in other words, everything you’ll need to know about your client base. You can take notes and refer back to takeaways from past conversations, which is helpful during follow-ups with prospects.

As your business grows, it gets harder to keep track of all the details. This software helps you do that more efficiently. I’ve found it’s my top tool for managing investor relationships.

Potential Options: Salesforce and Capsule

3. Informational Content

Experience and reputation aren’t enough anymore. Today, investors want to know about a manager’s strategies, principles, and overall approach before deciding which way to go. And they want this information at their finger tips, whenever they want.

So generate content that speaks to your guiding principles. Start a blog and share information about your investment strategy. Contribute articles that cover new opportunities, challenges, and other investment-related topics to industry publications.

You might even want to create a monthly newsletter. Not only will it keep you engaged with your clients, it will help keep your strategy top of mind. Just make sure to give clients, prospects, and leads an easy opt-in or out. No matter how engaging your content, permission is a must.

As you build up a repository of helpful and valuable content, you position yourself as a source of trusted information and a great potential fund manager for prospective clients.

Potential Options: blogs, white papers, articles, newsletters, etc.

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The personal touch is what investors value the most in their fund managers.

Testing out new tech won’t cause you to lose yours. When you spin up these tools, you’re simply leveraging technology to run your business more efficiently and effectively.

In the end, that’s always to the benefit of your investor base.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©Getty Images / Alistair Berg


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About the Author(s)
Dan Conner, CFA, FSA

Dan Conner, CFA, FSA, is the general partner at Ascend Venture Capital, a micro-VC in St. Louis that provides financial and operational support to start-up founders looking to scale. Conner specializes in data-centric technologies that enable the future states of industries. Before founding Ascend Venture Capital, Conner worked on the operations side of high-growth startups, leading teams to build scalable operational and financial infrastructure.

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