Data & Research February 12, 2013

Asset Managers Embracing Digital Revolution

Global asset managers are cozying up to digital media for their sales and marketing strategies.
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Cerulli Associates’ report, “Global Marketing and Sales Organizations,” predicts that digital media use will increase across all aspects of marketing and sales as companies evolve from product-driven to customer-led organizations. Asset managers are at various stages of development in exploiting digital media.

U.S. companies, particularly in the area of social media, are leading their European and Asian counterparts, the report said. Digital media usage increased in the U.S. from 31% in 2010 to 69% in 2011, despite regulatory obstacles. Most firms incorporate blogs and Twitter messages in their marketing strategies. Many fund houses in Asia, meanwhile, prefer traditional media such as print and television. 

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“Technology is enabling the faster delivery of communications,” said Fiona Maciver, associate director at Cerulli Associates and the main author of the report. “The real challenges for asset management are integrating and adapting organizations to benefit from new methods of engagement.”

More than 30% of global asset managers use digital media to communicate with advisers or other intermediaries, and 25% of firms use digital media to generate press interest. Survey participants said LinkedIn and blogs are the most effective channels, while Facebook was ranked as having the least potential.  

Advertising, brand, communications, creative services, e-commerce, internet marketing, production of marketing material, events, sponsorship and social media are the functions that 50% or more of survey participants suggested are located in the marketing function.

In 2013, most firms (90%) expect to spend more on e-commerce and digital media. 

For information about purchasing the Cerulli report, contact CAMarketing@cerulli.com.

Data & Research February 12, 2013

More Plan Sponsors Sticking With Providers

Win-loss survey data shows the proportion of plan sponsors remaining with the incumbent after conducting full 401(k) provider searches has continued to grow.
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For the sales situations Anova Consulting Group researched in 2012, 31% of mid-large market finals with between $20MM and $500MM in plan assets resulted in the plan sponsor remaining with the incumbent recordkeeper, up from 28% in 2011 and 18% five years ago. This figure does not include noncompetitive re-bid situations, which are an increasingly commonplace alternative to a full search/request for proposals (RFP) process for plan sponsors who are not necessarily dissatisfied with their provider but conduct periodic due diligence reviews for fiduciary reasons.    

“Over the last five years, the percentage of plans conducting full-blown searches and electing to remain with their current providers has increased roughly 10% each year,” said Richard Schroder, president of Anova Consulting Group. “While it speaks highly of industry-wide client service that so many sponsors are content to stay with their existing providers, this trend should not be discounted by sales and product development organizations.”    

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As search activity becomes increasingly competitive and 401(k) products and services become more commoditized in the mid-large market, retirement plan providers are striving to differentiate themselves and provide prospects with compelling reasons to leave their incumbents. A comparable product offering with comparable fees (or even a minor fee reduction) are infrequently sufficient to entice a plan sponsor to undergo the effort and uncertainty of a conversion to a new provider.     

According to Schroder, “The sales teams that are beating the odds are doing a better job of creating immediate value and differentiating their firms’ offerings during the sales process.With increasingly informed buyers and the ever-growing involvement of sophisticated search consultants and retirement plan advisers, providers must clearly articulate their value propositions and offer a highly consultative sales process customized to a sponsor’s specific needs.”  

Anova has conducted more than 1200 win, loss and departed client interviews with mid-large 401(k) plan sponsors since 2007.  

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