Researchers employ blog to explore predictability and fund performance

Can mutual fund performance be predictive?

According to Ani Chitaley and Anthony DuBon, co-developers of the FundReveal performance system, the answer is “yes.”

Researchers in a hurry turn to blogging for input.

The purpose of their blog, Mutual Fund Performance Forum, according to Mr. Chitaley, is to engage advisors and investors in a conversation about mutual fund measurement best practices.

The Power of the Quadrant

At the heart of the duo’s research efforts is a quadrant analysis that employs risk, return and persistence measures to offer a predictive approach to mutual fund performance.

When investors enter fund names or symbols, FundReveal charts each fund in comparison with the S&P 500.

“We aren’t looking for the funds that hit home runs last quarter or last year. We’re looking for those that provide solid best quadrant performance quarter after quarter and year after year.” Mr. DuBon concluded.

To develop their new blog and integrate it with their web site, Mr. Chitaley and Mr. Dubon turned to Advisolocity to implement their digital content strategy.

Filed under: Branding, Copywriting, Financial, Social media, financial marketing, financial social media, fundreveal, John Drachman, mutual fund performance, mutual fund persistence

FINRA postpones social networking Webinar from Dec. 16 to March 17

According to AdvisorTweets, Financial Industry Regulatory Authority Inc. (FINRA) says the delay is needed to reconcile comments from their membership.

As reported in DBJ Associates, the industry is taking a closer look at social media as sales literature because advisors and investors want to have a hand choosing the communications forms they prefer. “The cost of not communicating to advisors and clients through their preferred vehicles (social media) does not make a lot of long-term business sense.” Mr. Johnston said recently.

You can download your copies of Proposed New FINRA rules and Comment on Notice here.

Mutual fund marketers want to use social media

FINRA has no intention of addressing the social media question directly. In fact, the term “social media” appears nowhere in both the text of the new rule, nor Regulatory Notice 09-55, the comment notice.

The notice invites interested readers to call Joseph P. Savage, Vice President and Counsel, Investment Companies Regulation, at (240) 386-4534; or Thomas A. Pappas, Vice President and Director, Advertising Regulation, at (240) 386-4553 and state opinions.

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Filed under: Social media

Mutual fund marketers tell FINRA "don't mess with my social media"

November 20 is rapidly approaching.

That’s the deadline for providing the Financial Industry Regulatory Authority Inc. (FINRA) with your views on how social media should be treated.

As reported in DBJ Associates, “The cost of not communicating to advisors and clients through their preferred vehicles (social media) does not make a lot of long-term business sense.” It may be difficult for FINRA to address the social media question since a search of “social media” in both Regulatory Notice 09-55, the comment notice, and the text of the proposed new rule does not turn up a single reference to social media.

Samuel Morse’s original telegraph is an example of electronic media.

Instead the preferred term is “electronic media” or electronic communications. But are social media and electronic communications interchangeable? Electronic media uses electronics or electromechanical energy to access content. The primary electronic media sources are video recordings, audio recordings, multimedia presentations, slide presentations, CD-ROM and online content.

Social media, on the other hand, is designed to be disseminated through social interaction, created using highly accessible and scalable publishing techniques. Social media supports social interaction, using Internet- and web-based technologies to transform broadcast media monologues (one to many) into social media dialogues (many to many). It transforms all of us from content consumers into content producers.

You can download Regulatory Notice 09-55 and a draft of the new FINRA rules here.

The notice invites interested readers to call Joseph P. Savage, Vice President and Counsel, Investment Companies Regulation, at (240) 386-4534; or Thomas A. Pappas, Vice President and Director, Advertising Regulation, at (240) 386-4553 and state opinions.

Filed under: Branding, Financial, RIA, Social media

Three reasons why advisers like American Funds’ site best

According to Kasina and Horsesmouth, it’s official.

Financial advisers find American Funds’ adviser-only site the best, two-to-one, over nearest rival Pimco/Allianz.

Can creative, marketing and managerial professionals learn something from this achievement?
Web designer Zach Hedges of Actualize Media thinks so.

Why American Funds’ Adviser Center is the one to beat

“A solid social media strategy begins with a well-crafted web site. Believe it or not, the first thing that is right about this site is that the tagline provides a clear message: this site is about the advisor,” Zach said. “There are many sites out there where the ‘you’ is used for both customers and advisors.”

“The second strength is the intuitive navigation that step-by-step takes the adviser through the qualifying process. Well-organized and friendly to business-building, clearly marked prompts and suggestions keep the adviser from becoming overwhelmed.

“The hyperlinks provide transitions to statements like ‘let me show you what I mean’ which leads to further client qualification and a personalized hypothetical. Very cool.

“Third, the site shows you where to find more resources and support — in a way that leads to cross-selling opportunities.

“Attractive and conservative, the site seems designed for people on the move. Fonts are big and bold. The brand is American, red, white and blue all the way. This site just keeps on giving.”

Filed under: Advisor, Bruce Johnston, Copywriting, Marketing, Social media, Advisor

Financial advisor’s small social media effort pays off big

Social media marketing is still fairly untested in the financial services world. A recent FRC Monitor noted, for example, that “… the asset management industry has been slow to use the technology effectively.”

That’s why we were very pleased when a Registered Investment Advisor asked us to write the copy, then develop and conduct a social media effort for his business. The project offered a compact example to marketing writers and managers for how advisors and money managers can raise assets by engaging their clients in the more informal, conversational ways provided by social media.

Social media marketing uses social networks, online communities or blogs for marketing, sales and public relations purposes. Our client, Charles “Chuck” Steege, CFP,^® asked us to build a three-part webinar program, Uncovering The Fortune That Lies Hidden In Executive Compensation, and conduct the program through the summers dog days.

“The program was very successful for us,” Chuck said. Using three webcasts, a press release, an email campaign and targeted third-party blogging, we were able to drive up the RIA’s page 1 Google presence, which served to create fresh momentum, interest and business.

The firm’s abundant appearances in financial blogs were used for marketing purposes. Sending a blog posting via e-mail to client is similar to sending a photocopy of a press clip. It establishes an advisor’s thought leadership. This project convinced us that applying social media’s free, readily available public domain tools to an outreach campaign is the short-cut to sales success.

See the whole case study on SlideShare here

For under $10,000, Chuck attracted four times that amount in new fees on some $4 million in assets. More importantly, he created a prospecting base of 21 high net worth individuals who wanted to know more about Chuck’s services in the next 60 days.

The experience showed us how low cost social media marketing strategies can contribute to increased assets under management.

Filed under: Advisor, Branding, Bruce Johnston, Copywriting, Marketing, RIA, Social media, RIA

Where's the ICI Fact Book When You Need It?

Could all of the educational efforts mutual funds and trade associations like the ICI have put into educating the public on mutual funds be insufficient?

You could certainly wish for more funding for education after viewing CNBC’s squawk box confusion over the difference between stocks and derivatives.

Before stepping into a recent Senate Finance Committee vote, Barney Frank was interviewed by a CNBC trio about the merits of letting shareholders set pay limits for TARP Fund recipients. The first dude came back with an off-handed statement about just letting the board of directors and senior executives of a TARP company sort things out.

Why get the shareholders involved? According to the ICI Fact Book, a shareholder is “An investor who owns shares of a mutual fund or other company.” Barney had to remind the fellow that shareholders are, literally, owners of a company; and, as such, are obligated to play a role in corporate governance.

The best was saved for last, when a squawk-boxer, said to Barney, “It seems to me that you’re dealing with a model (shareholder voting) that no longer works. We don’t have mom and pop sitting at home holding these shares. These shares are primarily in mutual funds and the ownership is a derivative instrument.”

Of course, without broad-based common stock shareholder participation, a good chunk of the equity markets — and still another $12 trillion — can vanish over night. Well, even if mom and pop are sitting at homing holding the shares, they still have ownership rights; even if they own shares of mutual funds only, they have the right to pressure the Fund board on matters of equity investment policy. This right, ensures, for example, that company selections have robust shareholder participation on stuff like, I don’t know, executive comp.

“These shares” confuses traditional equity investing with credit default swaps, options, and other derivatives. Whether it goes up or down, a stock is a real, tangible asset — unlike the derivative.

Squawkbox, heal theyself. You can download your free copy of the ICI Fact Book here.

Filed under: Financial, RIA, Social media, Advisor, asset management, financial services