KPMG has released an excellent study that investment practitioners should read. The report gives investment managers insights from investors into the current and anticipated future shape of the investment world. KPMG offers some practical ideas on how to mend relationships and there are two "back to basic" principles worth particular attention.

At its core, investment management is a client centric business. In the past 18 months the size and shape of financial services has changed massively and alternative investments have particularly taken a hard knock. The challenge now is to find new methods to engage with investors, rebuild confidence and stride ahead of peers. 

KPMG's study (Renewing the promise: Time to mend relationships in investment management June 2009) concludes large-scale change is necessary, and, to mend relationships, the industry should improve communication and transparency.

Transparent communication

One of the most interesting charts in the study for us was the way European investors believe investment managers can differentiate themselves. Forty-three (43%) of European investors believe improved marketing communication and client service will differentiate investment managers. Many fund managers would not consider these areas to be weak, and therefore not a strategic priority, as staff and operations are already in place. The lesson seems to be that while the resources exist they are not working properly.

Our conversations with investors' show attitudes have changed and fund managers need to find new ways to reach the higher standards investors expect and require. Getting more from communication materials and client service resources is imperative. 

How can investment managers truly differentiate themselves
(apart from investment performance) in the view of European investors?

Alternative Decisions was built to improve communication and share qualitative materials more effectively. Our focus on the soft side of research (i.e. letting investors learn the how and why) is something no one has done before and will improve relationships.

Client Service

Maintaining client relationships and making new ones is clearly essential for any business. For alternative fund managers, client service activities directly impact client retention. It's therefore important to focus on ways to maximise the value of client contact and interaction with them.

There are four key aspects to client service to evaluate: scope and quality of resources, responsiveness and use of technology.

Alternative Decisions is a smart client contact system. In practical terms it assists client servicing as it delivers the information investors regularly want to see on their desktop. A regular flow of information will increase the value of the relationship and the investor's confidence grows as they know the latest news and activity.

Summary

Events have ushered in a sea change giving investors the upper hand and funds managers need to respond giving investors the information they require and service they deserve. Consider using Alternative Decisions as a way to sharpen your communication effectiveness.