With all the challenges facing small and emerging asset managers over the last several years, it can be challenging to find the time to think strategically about their business. Working to counter the headwinds of passive inflows, persistent fee pressure, thinning profit margins, increasing regulatory costs, and outmoded distribution models can be all-consuming — like trying to fix a plane while flying it. While it's not entirely excusable, it may be understandable why many firms don't see strategic planning as a priority right now.

Dan Sondhelm Sondhelm Partners CEO

However, the failure to think and plan strategically means you will likely spend the next year continuing to fix the plane while flying it, significantly reducing the likelihood of reaching your desired destination and increasing the possibility of grounding your business altogether. Fortunately, there is still time to gain control and put a strategic plan in place for what will be a pivotal year for asset managers.

Focus on the Vital Issues

Time spent on strategic planning is not a luxury; it is essential. But, if time is limited, it can be more effectively utilized by narrowing your focus to the vital issues — those that will have the most significant impact on your business over the next few years. The key to prioritizing your issues is to ask the right questions of your senior staff and have them rank the issues in terms of the risk they present if no action is taken. If by the end of the process, you narrow it down to the two or three most critical issues, you know where to direct your time and resources.

Take our Growth Assessment for Boutique Managers or continue reading to review our guide to asking questions to pinpoint your vital issues:

Review Your Goals

The biggest mistake many asset management firms make is to center their goals around AUM as the primary objective. However, an AUM goal needs to be dissected to flesh out critical measures and potential obstacles that everyone understands. For example:

What portion of your AUM growth do you expect to come new flows versus market price appreciation?

Is the goal attainable without the kind of market price appreciation you've experienced over the last several years? If not, what specific areas should your firm focus on to increase flows to make up the difference?

What can you expect in increased inflows from each of our target markets and product offerings?

 

Assess Your Current Plan

Before you can think strategically about the year ahead, you need to fully assess your current results and processes to determine what's working and what’s not working. For example:

Is your current plan on target?

What's working, and why is it working?

What's not working, and why?

If it's not working, is it because it's a bad idea or have conditions changed? (i.e., market conditions, industry trends, your competitive situation, branding issues, etc.)

Evaluate Your Target Markets

Using your sales data and client databases, do a deep dive into your current target markets to determine if you are still hitting the mark with questions such as:

Who are our existing clients, and why are they choosing to do business with us?

How many clients have left us, and why?

Has your target market changed? Has the persona of our ideal client changed?

Should we be diversifying our target markets?

Fund Pricing

Your target market may be responding to the ongoing industry trend impacting fund pricing and gravitating toward no-load, load-waived, and I shares.

Do your fund pricing and share class offerings still match the preferences and priorities of your ideal client? Are your fees aligned with your competition?

What's Your Story?

Even a well-conceived strategic plan won't help you if you don’t have a good story to tell or an effective way to get your story out. As you ask these questions, you may want to seek feedback from your clients to determine how your story is being received.

What makes your firm unique or different from other firms?

What does your firm aim to achieve for your clients, and why is it uniquely qualified to deliver it? (i.e., a unique investment approach, highly customized portfolio management, and superior client services.)

Do you tell your story consistently across all your communications channels? (i.e., website, blog, social media, and media coverage)

Recommit to Marketing

If you're competing for the same assets as 20 or 100 other funds, you're not going to gain any ground without a concerted marketing and branding effort. If your marketing efforts are subpar or merely an afterthought, you are probably losing ground. More than ever, marketing is a vital issue for any small or emerging asset management firm, making it a top priority in a strategic plan.

Has your website been upgraded or redesigned to meet the expectations of today's more discerning clients?

Is your website dynamic, offering ways for visitors to interact and engage with its content, or is it still look and act like a static, electronic brochure?

Are you tracking website activity — i.e., tracking who's visiting, which pages they view and their level of engagement — to convert visitors into leads?

Are you still indiscriminately blasting emails hoping to get a response, or are you using technology to target your recipients with content tailored to their interests?

Are you merely tracking email open rates, or are you using technology to learn who's opening your emails and whether they click through to your website or social media sites?

 

Are you using technology to nurture your email recipients through the sales funnel and identifying which ones are ready to be contacted?

Are you using a proactive public relations strategy to build relationships with upper-tier media to expand your media coverage and increase your brand visibility?

Is your marketing aligned with the needs of your sales team, providing high-value support to position them for success?

Assess Your Sales Approach

The sales distribution landscape has changed dramatically over the last several years. The same sales team model that got you to where you are may now be obsolete. If you're not getting the level of production from your salespeople to justify your compensation, you have another vital issue to consider.

Is your sales team using a CRM system that houses your sales aggregation and marketing data to provide a fuller picture of clients and leads all in one place?

Are your internal salespeople capable of opening doors or maintaining good relationships with investment consultants and other third-party gatekeepers?

Are you equipping your salespeople with customer-centric sales materials to use in presentations, or are they still using generic fact sheets and pitchbooks?

Does a dedicated sales manager manage your salespeople, or are they accountable to someone else who has to contend with more pressing matters such as managing portfolios?

  With the answers to these critical questions, you can then prioritize your vital issues and develop an implementation plan in order of the risk they pose if you do nothing to address them. Even if you select two or three to start, you can substantially improve your chances of success.

  Dan Sondhelm is CEO of Sondhelm Partners, a firm that helps asset managers, mutual funds, ETFs, wealth managers and fintech companies grow through marketing, public relations and sales programs. 

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