Asia-based fund managers are increasingly making use of technology in their marketing and sales strategies, with managers surveyed by Cerulli ranking an increase in their digital and social media presence as their third-most important priority.
Around 87% of managers indicated that they are interested in increasing their expenditure on digital marketing, the report added.
On the flipside, 52% of the respondents are expected to reduce their expenditure on print advertisements, while at least one third is keen on reducing budgeted allocations to traditional channels such as TV, radio and billboards.
“The recent work-from-home arrangements point to the rise and potential of digital channels as tools for creating awareness, sharing market and fund information, and closing fund transactions,” the report said.
Indeed, more investors in the region have gone through online channels to access mutual funds. For example, Manulife Investment Management in Hong Kong saw its online distribution platform’s AUM double in the first quarter alone.
Other markets, such as China and India, also saw a rise in online distribution activity, according to the Cerulli report. For example, in February, Ant Fortune saw its daily fund purchases reach four times higher than usual.
However, the report noted that funds that are simple to understand and have lower risk-return profiles have found more success through online channels. For example, a Singapore-based manager told Cerulli that since exchange-traded funds are meant for self-directed investors, digital marketing works well for these types of investors.
On the other hand, to meet the sophisticated investment needs of high-net-worth individuals, managers should go through the traditional distribution channels, particularly private banks.
In addition, while digital platforms can entice more investments, it could also lead to churning among investors. The report explained that as information availability increases, the tendency to switch between funds could also increase, especially given that Asian investors typically do not have long-term investment horizons.
“In the long run, Cerulli believes Covid-19 could be a catalyst for increasing the use of digital channels for marketing, advertising and fund distribution,” said Leena Dagade, associate director at Cerulli, said in the report.
“Stable digital platforms and clientele, as well as good customer service, are important success factors. As competition intensifies, managers and distributors will need to be innovative in meeting the requirements of their clients and engaging with them,” she said.
