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Market Musings

4 Quick Takes Impacting Sales Distribution in the Investment Management Industry

May 26, 2017

There is no arguing the point that these are clearly challenging days in the investment management world.  Similar to any paradigm shift, there are myriad factors that are contributing to the scenario unfolding in today's rapidly changing marketplace.


Four issues we think are key:


 1.  Mutual fund flows from Active to Passive Management are compressing fees

Largely beginning in the aftermath of the Great Financial Crisis in 2008, this trend has not shown much interest in relenting. With rates plummeting to nearly zero, investors pushed investment management firms to cut their fees to the bone as one way to supplement the diminished yields on their fixed income investments. Asset managers largely obliged, offering subsidized yields and discounted fees in a beggar-thy-neighbor climate. This, in turn, led to a certain commoditization of mutual funds not unlike the soda wars between 

Coke vs Pepsi image

Coca-Cola and Pepsi.  Product differentiation became blurred as the companies sought to compete almost exclusively on price. How many consumers simply purchase whichever 12-pack is on sale that day at the grocery store, regardless of any subtle difference in taste?


In addition, investors are clearly unimpressed by many asset managers' abilities to significantly outperform their benchmarks and, instead, prefer the comfort and cheaper fees of passive vehicles such as ETFs (see Display 2.)

2. Investment Company layoffs in anticipation of the shifting product mix

2016 layoffs in Finanical Services

Based in large part on the asset flow and fee scenario described above, investment managers have been reducing staff in supporting roles across companies.  This has led to many, more experienced marketers leaving firms and junior staff increasingly being tasked with assuming their former colleagues' responsibilities.  Such an ask can be fraught with challenges as inexperienced marketing team members often lack the insights into best practices as well as knowing what efforts have failed in the past.

3. Companies have reduced staffs below single person failure

Marketing departments are now facing the daunting task of fulfilling their missions while lacking the staff to do so with any degree of confidence. This departmental shortfall arrives at the same time that they are being asked to generate more leads for sales colleagues and simultaneously provide a satisfactory return on investment (ROI) to management (see Display 3.)  This lack of connectivity to tangible productivity has bedeviled the function for years.  Seemingly, Marketing functions are being positioned to disappoint their sales partners.

4. Marketing staffing levels now represent the new normal


If you haven't realized it yet, we will state the obvious: increases in marketing resources are not returning, at least not for the foreseeable future.  Team levels are capped at the moment and even replacement headcounts are in jeopardy.  In addition, the promises of that Greek siren in the distance—marketing automation—have given many distribution management teams the confidence to reduce headcount but maintain marketing support through the utilization of these tools.

Unfortunately, automation efforts have been

Active to Passive investments

a tad overstated and have not provided the seamless, immediate functionality that many firms thought they would.

Top 2017 Marketing Challenges
2017 Marketing Priorities

What can Marketers do?


Solution providers have entered the market at a time when Investment companies that lack the resources to execute a complete marketing plan are being left behind; a time just as the playing field leveled-out for less capitalized companies. We would suggest that firms search out the best-positioned vendor that follows a practical, quantifiable, rigid approach with timely reviews, checkpoints, and assessments to ensure that the solution not only meets but exceeds their client's expectations. 

Based on Carnegie's proprietary research as well as our interactions with industry participants, we would suggest three steps to address the situation: 

1. Align marketing activities to sales,

2. Identify Skill gaps and allocate Funding to address training costs,

3. Reprioritize marketing activities.


By following this process, we believe that investment management firms can navigate their own fiscally challenging circumstances, and deliver the support necessary to compete and win new business.


About Carnegie Agency

Carnegie Agency is a full service digital first marketing agency, serving small-to-medium-size businesses with a specialty in Financial Services, FinTech, Not for Profit, and Business Services industries. The firm's expertise spans over 120 years providing practical, appropriate marketing solutions for companies across an array of market sectors. Carnegie's client engagement model delivers the optimal solutions with specific plans, follow up and metrics to remove the guess work from determining success. The firm's product offerings include Marketing Automation Risk Assessment Tools and Marketing in a Box. For more information, please visit

Image of Soda Wars courtesy of


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