June 2013

INSIDE VIEW: Are you following me?

Thumb upEuropean asset managers are not as active on social media as they should be, says Daniel Ganev at Karoll Capital Management. Social Media is an unstoppable trend – we live it daily while catching up with friends on Facebook, job-hunting on LinkedIn, or sharing our passions on Twitter. Research has found it is also a proven tool for companies to achieve strategic goals, including higher profitability and valuations. Yet, social media adoption by asset managers is rather low compared with other industries. For a business where brand awareness, networking and client communications are key sources of competitive advantage, the reluctance to embrace social media is a problem. Laggards are bound to lose market share against the backdrop of customers’ dynamically changing demographic profiles and attitudes. LINKEDIN
As part of the University of Cambridge Executive MBA programme, I recently conducted a study on the level of social media adoption, engagement and challenges faced by investment managers in Europe and the US, entitled What’s Not to Like – Social Media Adoption and Strategies for European Asset Managers. Comparing the top 100 firms on both sides of the Atlantic indicates that the most widely used channel is LinkedIn, because of its professional networking focus. Yet, just 11% of Europeans and 15% of US firms take advantage of its interactive nature. Most still use it simply to post static information and as a recruiting tool. European asset managers have discovered Facebook too, but their presence is still far from active, with the majority showing zero engagement with the audience. In the US, the penetration is much higher:  80% of the asset managers have a Facebook page, with 29% of those actively engaging with their community, 22% engaging moderately, and 49% not at all. Surprisingly, the penetration of Google+ is higher among European compared with US asset managers (46% v 32%), yet most have signed up to book a seat at the table without actually engaging with stakeholders. Just half of the leading asset managers – both in Europe and the US – have a corporate Twitter channel, but those who do make good use of it. IV chartsAs many as 62% of European and 66% of US companies frequently share a variety of content, engaging in conversations and responding to enquiries. Nonetheless, the number of followers is far from enough given the customer base of these firms. Although asset managers are opening up to video content, roughly half of all have signed up to YouTube. Of those that have accounts, Americans use it much more actively (45% v 19%). Even the channels with rich content and frequent updates, however, attract few subscribers. I was “privileged” to be the first subscriber of several year-old YouTube outlets. BLOGS
Interestingly, just 15% of European and 23% of US firms have blogs – some appearing abandoned – which shows that there is a drift away from this outlet to the more popular social networks. My research was hampered by the fact that few firms (23% in Europe and 34% in the US) have bothered to place visible social media buttons on their websites – an indicator of the level of care for social media. There appears to be a positive correlation between asset managers’ size and social media activity as well as digital influence – larger firms are more active and more influential as measured by their Klout score [the standard of measurement for online influence]. While some asset managers report gaining new clients and realising savings via social media, the survey shows that firms use it predominantly as a communications tool, aiming to boost reputation and brand equity (61.4% of responses), become more open and human in the eyes of the customer (54.5%), and communicate more effectively with clients and advisors (50%). In terms of content, community managers share mostly corporate news, thought leadership messages, administer games and quizzes to expand the social media followers base, as well as video content to highlight the investment team’s expertise, process and strategy. Why does the smart money shy away from social media? The main barriers are related to regulatory compliance concerns (37.1% of responses), difficulties in measuring the benefits (28.6%), and fears of negative publicity (25.7%). It is not about the money – less than 3% point out “lack of financial resources” as an obstacle. The big surprise was that a third of the companies do encourage employees to use social media at work – some firms seem to realise that its people can act as powerful evangelists for the brand online. The benefits stemming from social media massively outweigh the risks involved, so asset managers must clear the barriers and embrace it. There is a trade-off between keeping up-to-date with innovations and keeping a low-risk compliance profile. But firms do not really have as much choice as everyone – customers, employees, analysts and partners – expect to hear from them on social media. New semantic technologies are blurring the boundaries between the physical and virtual worlds, allowing for more genuine conversations, spontaneous interactions and personalised marketing approaches that firms can take advantage of. Daniel Ganev, University of Cambridge Executive MBA, is a director at Karoll Capital Management ©2013 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.