How Savvy Boutique Asset Managers are Adapting to the New Virtual Reality

An unprecedented pandemic that profoundly changed the way Americans live and work. The worst recession since 2008. A stock market that lost and recovered a decade’s worth of gains in six months.

In 2020, boutique asset managers were confronted with business development challenges they never could have anticipated. How these firms are dealing with these challenges is the theme of Sondhelm Partners’ recent webinar, Client Engagement in Spite of Covid-19: How Boutique Asset Managers are Adjusting to the New Reality, a replay of which you can view right now.

During the webinar, we asked attendees to rate the quality of their sales teams and digital marketing efforts, how effectively they’re telling their story to clients and prospects, and what their business plans are for 2021. We also shared top industry trends and best practices we believe asset managers should pay attention to.
Here are some high-level findings from our webinar.

Click to view full poll results

Success Stories in Search of Wider Audiences

Sixty percent of webinar attendees said that they have a great story to tell, compared to only 25% who said their story needs work.

The challenge? Finding audiences who are willing to listen. Savvy firms are versioning their story to align with the unique due diligence criteria of institutional consultants and advisors. Other firms are pushing their portfolio managers and specialists into the virtual spotlight, asking them to tell the story directly to clients and prospects.

Scrambling to Improve their Digital Communications Game

With the pandemic largely eliminating in-person meetings, sales and marketing teams are struggling to adapt to a world where digital communications have become the new normal. Only 36% of webinar attendees said they have invested more in digital communications in recent months, and 41% feel they need to do a much better job.

Firms that are doing it well are shifting content development efforts away from product-pitching to thought leadership. They’re giving their subject matter experts greater exposure through video conference calls, webinars, and standalone videos. They’re ramping up the volume of social media posts to keep their story in the spotlight. They’re leaning on wholesalers to engage more often on LinkedIn and Twitter and personally respond to comments from clients and prospects.

Slow Adoption of Sales and Marketing Enhancers

While many boutique firms are getting better at using digital communications, most are not taking advantage of a new generation of sophisticated sales and marketing tools that make it easier for them to gather market intelligence, generate and qualify leads and streamline sales efforts.

Firms that are ahead of the curve are using marketing automation platforms to track the digital engagement levels of every prospect and client. Sales aggregation and reporting tools are helping firms identify advisors who are using their products – and those of their competitors. Sales enablement tools are making it easier for wholesalers to track the effectiveness of their contact activities and identify the interests of their target audiences. And the most forward-thinking firms are finding ways to integrate all of this intelligence into their CRM systems to help them fine tune their sales efforts.

Still, most firms have a long way to go in terms of embracing these technologies. Only 9% of webinar attendees said they’re doing better than their competitors in adopting these tools. And while 40% have started to use some of these applications, 31% don’t have the resources to purchase and use them.

Struggling with Socially Distant Selling

With most golf outings, lunch meetings and conferences largely off the table, many wholesalers are struggling to adapt to the reality of virtual selling.

This challenge was reflected by webinar attendees. Only 34% said that their sales team is doing a great job and 45% are still trying to figure out how to adjust to the new reality.

Many pure sellers are temporarily taking on traditional client service responsibilities. They’re setting up webinars and Zoom sessions with portfolio managers, distributing the firm’s thought leadership content to clients and prospects, and reaching out to their best clients and prospects to ensure them that the lights are still on in their firms.

A Positive Business Outlook

In spite of the challenges boutique managers are facing in increasing AUM, many are still moving forward with their business plans.

Forty-five percent of webinar attendees said that they’re planning on rolling out new funds and strategies, compared to 25% who have stopped or slowed down product development efforts.

Fifty percent said they have returned to their home office, compared to 46% who are taking a wait-and-see attitude about coming back.

And while the majority of firms aren’t interested in M&A opportunities, 20% are considering buying other firms or hiring sub-advisors to expand their product offerings. Only 12% are thinking about selling their firms or funds.

Those boutique firms that are involved in M&A activities have told us that they’re getting the job done faster and more efficiently. Sellers and sub-advisors are getting much better at pitching their success stories to buyers and adopters. And both parties are taking far less time to close the deal. In many cases M&A activities that once took six months or more are getting done in three.

What’s in Store for 2021?

Great news on the vaccine development front and expectations that the economic recovery will speed up in 2021 have driven the stock market to record levels this year. Many boutique managers whose AUM and revenue have risen in this environment are already planning for a return to business-as-usual.

Still, it may be many months before wholesalers can start traveling again. And even after things return to some semblance of normal, many clients and prospects will prefer to meet virtually rather than in-person. In this new reality, boutique firms will need to adopt a hybrid model of sales and marketing that aligns with the needs of their target audiences. Firms that commit to improving their digital marketing efforts and investing in technologies that make selling more successful and cost-efficient will be better prepared to thrive in a post-pandemic world.

View a replay of Client Engagement in Spite of Covid-19: How Boutique Asset Managers are Adjusting to the New Reality.

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. Click to read Dan’s latest Insight articles and to schedule a complimentary consultation.