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Thought Leadership In Asset Management: What It Is And What It Should (Never) Be

Niels Footman 21 January 2023
financial content writer

Date published: 2019, edited: 2023

It’s no great mystery why thought leadership should be so enticing for asset managers.

In a sector riddled with regulation, where product differentiation often borders on the impossible, thought leadership provides a medium for clear, insightful, thought-provoking content that clearly distinguishes you and your company.

At least, that’s the idea.

In fact, “thought leadership” is among the most inescapable – and misused – buzzwords in the industry. Yet used well, it remains a particularly effective tool for marketing in asset management. But before we address why and how, it behooves us to ask:

What is thought leadership?

For all the term’s vagueness, thought leadership is, or at least should be, distinct from other forms of marketing content.

In our own research last year, 97% of respondents defined thought leadership as “thought-provoking and original commentary” (compared to 0% who consider it simply “marketing material from an asset manager”). In addition, 86% of respondents cited “original thought” as one of the most important elements of thought leadership. (The other leading components were “relevance of topic” and “depth of knowledge”.)

If we accept that provoking or challenging thought is the central tenet of “real” thought leadership, it becomes easier to distinguish it from other types of marketing content.

But is the distinction important?

In fact, terminology does matter. As we’ll see below, thought leadership in asset management can influence buyers’ decisions – for good and ill. If a company consistently produces “thought leadership” that is actually the most generic, inoffensive market analysis or white paper, cynicism toward the term, and toward the company itself, could grow.

Conversely, thought leadership that regularly includes sharp, thought-provoking insights could serve to convey a company that is transparent, honest and does what it says.

So, if our basic definition of thought leadership is “thought-provoking and original commentary” that embraces “original thought”, we can outline some guidelines for achieving this:

Thought leadership shouldn’t:

  • Just be news, regular market analysis or marketing spiel.
  • Be explicitly self-promotional.
  • Follow the herd.

Thought leadership should:

  • Be original, with a clearly stated point of view.
  • Be timely.
  • Be credible, based on the asset manager’s expertise, specialities and extensive research.
  • Be highly relevant, appealing and accessible to its intended audience.
  • At least aspire to shift accepted wisdom and take the conversation in a new direction.

Why thought leadership matters

In our survey, 69% of respondents said that thought leadership was a “very important” part of their marketing mix, with 72% saying they expect thought leadership to “significantly” grow in importance.

In its 2019 study of thought leadership’s impact, PR agency Edelman highlighted both how influential it can be among C-suite decision-makers – and how much creators of thought leadership can underestimate its importance.

Among its key findings:

  • 55% of decision-makers use thought leadership to vet potential vendors.
  • While just 19% of creators believed that thought leadership would lead to more RFP opportunities, fully 45% of C-suite executives said they had invited companies to submit proposals after having seen their thought leadership.
  • Just 26% of creators credited their thought leadership with helping to close deals, while 58% of business decision-makers said it had made a difference.
  • On a more chastening note, 29% of C-suite executives said that poor thought leadership had prompted them not to award business to the relevant company.

Clearly, if executed well, thought leadership can be hugely valuable to asset managers in driving business.

Which begs the question, just how is it done well?

Tips for getting it right

Be forthright…but not overly provocative

As our survey suggested, of all the elements of successful thought leadership, none is as important as a clearly defined point of view that challenges the status quo. While this may seem obvious, it’s striking how much “thought leadership” fails this basic test.

But for wealth managers who do this effectively, the impact can be profound.

In 2009, with global markets still reeling from the financial meltdown, many notable observers held – in line with economic orthodoxy – that the crisis could be paving the way for a new, long-term bull market in risk assets. Into this fray stepped PIMCO founder Bill Gross, with a keynote speech at the Morningstar Investment Conference.

Citing new structural realities such as vast debt piles and lower global demand, Gross challenged the idea that better times were inevitably ahead. Low interest rates and low returns, he said, could be a “new normal”.

Although, in his implicit support for fixed-income markets, Gross could certainly be accused of being self-serving with this view, it was nothing if not bold, wide-ranging and credible. The fact that it was wrapped in an instantly memorable soundbite only added to its impact.

Now, there’s clearly a fine line between outspoken and overly provocative. In the wake of the UK’s momentous Brexit vote, some commentators may well have crossed it – not least this fellow, whose opinion can be divined from the headline “Brexit. Turkeys Voting For Christmas.”

The writer of this piece certainly doesn’t shirk from expressing an opinion. His arguments are forceful and lucid. But is his combative tone likely to win over many converts? More to our point, was a withering screed about Brexit’s economic failings really going against received wisdom in the asset management industry? The answer to both was very probably no.

Be timely, but don’t follow the herd

In making sense of the world, investors need to know about things that are important now. Brexit negotiations, central bank musings, election results – these are huge events that have enormous real-world financial consequences. But if reams of cookie-cutter fund manager analysis are rushed out in the hours following one of these momentous occasions, does it qualify as thought leadership? By definition, almost certainly not.

Of course, it’s not always possible to crank out insightful, long-form analysis in line with the news cycle. So for those times, to qualify as something that challenges or leads thought, a fresh outlook will be required.

That perspective could be historical, as was The Economist’s absorbing essay on “The slumps that shaped modern finance” – intended every bit as much as a lesson for regulators today as it was a dive into the history books. It could be contrarian, like BlackRock’s take on why rising rates might actually be positive for bond investors. Or it could be highly topical in another realm, as with MarketWatch’s use of the Jussie Smollett scandal to approach the issue of salary negotiations.

Again, not all of these options are going to be feasible – or desirable – for every asset manager. But the option of adopting an original perspective on current events always is.

Promote your view, not your product

You just know that your strategy and your team are best placed to deliver excellent risk-adjusted returns. What better way to convey this than in a stirring “thought leadership” piece about your segment of the market and why your fund is especially well-equipped to prosper in current conditions?

But if your aim is to produce “thought-provoking and original commentary” and position yourself as someone whose expertise can deliver returns for your clients, what is more likely to achieve that? Thinly veiled product push? Or bold, impartial ideas that show genuine breadth of vision? (According to the Edelman study, 61% of C-suite decision-makers will pay a premium to work with companies that “have articulated a clear vision” through thought leadership.)

One leading asset manager that understands this is Aviva Investors, with its AIQ magazine. Published in a modern, eye-catching format, and employing rigorous editorial standards, AIQ eschews product push, explicit or otherwise, in favour of insightful long-form content produced by internal and external experts. The latest, tech-themed, issue includes features on AI and big data, along with analyses of the potential impact of an end to monetary easing.

While not everything in AIQ could lay claim to being thought leadership, the rejection of product push instils genuine credibility in the magazine’s opinion pieces. For readers, that nagging voice asking, “but what is this article selling?” can fall quiet, making them much more receptive to having their thoughts provoked or challenged.

Find your niche

Say M&G, and thoughts turn to Bond Vigilantes; Vanguard, and ETFs spring to mind.

For these reasons, when someone from the former talks fixed income, or a Vanguard manager discusses ETFs, markets listen.

Despite this, many asset managers attempt to cover all their bases with their thought leadership, a course of action almost certain to result in a vast expenditure of effort for minimal return. This certainly isn’t to say that asset managers should not market their lesser-known products. But if the intention is to produce memorable, insightful and impactful thought leadership, securing a niche is a massive step in the right direction.

Consider Rabobank. By retaining a central focus on the unsexy but indispensable sectors of food and agriculture, the bank has gained global renown as an expert in those fields, producing detailed, in-depth research that has made it a go-to source for agricultural expertise.

For larger asset managers, a practical way to achieve this is finding specific sub-areas within asset classes – ideally aligning with the specific interests and knowledge of the fund managers – and focusing thought leadership efforts there. So if the broader goal is to be known for ESG, a good starting point is establishing expertise in, for instance, renewable energy or corporate governance structures.

If this niche credibility can be established and maintained – think Warren Buffett for buy-and-hold investing – it can, almost by definition, elevate much of what a manager says to the status of thought leadership.

Perfect the format

If someone produces thought leadership, however brilliant, in a format that no one reads, is it really leading thought?

If, for instance, an asset manager wrote a study on how millennials can take their first steps into investment, but published it in a 20-page white paper in PDF format, such a glaring disconnect would immediately undermine any claims the writer had to understanding his audience.

And this certainly doesn’t only apply to millennials. Investment marketers churn out a blizzard of lengthy PDFs, text-heavy commentaries, and conventionally presented analysis to readers who won’t have anything like enough time (or inclination) to read it.

But for some financial services companies, this penny has definitely already dropped.

One success story in this area has been BNY Mellon Investment Management, which has transformed a rather staid, conventional marketing operation into a vibrant news-driven one. Lengthy reports have been broken down into bite-sized posts, and market analysis has been recast as an infographics blog.

Another formatting trailblazer is Morgan Stanley, with its Ideas podcast. Eschewing the well-trodden format of panel Q&As with industry experts, Morgan Stanley asks questions with broad appeal, in a professionally produced show, with guests from across the board. (The inaugural episode, Why Do Pro-Athletes Go Broke?, featured retired NBA star Antoine Walker.)

Though not every infographic, video or podcast could lay claim to bringing about a major shift in the debate, presenting quality content in formats specifically designed for your target audience is a key component of establishing credibility as a thought leader.

The takeaway

If thought leadership were easy, everyone would be doing it (properly). Creating content that triggers real “aha!” moments in the minds of readers is undeniably tough, but the rewards, as the surveys above indicate, can be great.

Above all, the point to remember is this: while thought leadership is ultimately there to sell you and your company, for it to work, avoid using it to explicitly sell you and your company. If you provide:

  • Forthright, fresh insights
  • In a timely yet distinct manner
  • While eschewing product push
  • And occupying the right niche
  • Using the right format

Your thought leadership could be one of your most powerful sales tools.