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Firms Must Integrate iPads into Sales Process

By Rubesh Jacobs

A kasina survey from December 2010 revealed that firms recognize the value of mobile devices and apps. It further revealed that access to information, enhancing productivity, and enhancing the sales processes are critical to wholesaler's use of mobile devices. These observations will be confirmed in kasina's forthcoming 2012 update to the study, based on December 2011 data.

Mobile Technology Capabilities that Firms Value

Recognizing this value, during the past year wholesalers at JPMorgan, Ivy Funds, Dreyfus, Lord Abbett, and John Hancock, among others, have all rolled out iPads to their sales teams. Starting with JPMorgan and The Hartford, firms even rolled out an iPad app specifically for their wholesalers. This trend will continue to gather momentum.

Still conversations with advisors, data from research, and executive discussions at kasina roundtables, reveal a troubling trend; wholesalers bring the iPad to the meeting but use brochures for the discussion with advisors.

Among the root causes of this issue are:

• Apps and mobile websites ill-suited for a point-of-sale conversation
• Poor integration of the iPad into the sales process
• Lack of structured training for wholesalers on how to use the device with an advisor
• Little to no measurable goals related to iPad usage

It is obvious that these issues are intertwined with each other. For instance, if the apps are not good enough for a wholesaler to use with an advisor, they are more likely to rely on good old brochures. Or, if wholesalers are not trained on how to bring an iPad into the conversation, they are more likely to revert to tried and true approaches of old.

Hence, we recommend the following:

• Modify existing apps in such a way as to enable a smoother conversation between wholesaler and advisor
• Revisit existing sales processes and marketing campaigns and make changes to how the iPad should be used
• Utilize existing sales training time to inculcate iPad usage with wholesalers
• Set up measurable goals for e-Business, marketing, and sales in order to measure the usage and effectiveness of iPads

Making Market Commentary Valuable

By Lee Kowarski

According to a kasina FA Vision survey on financial intermediaries' usage of marketing materials from asset management and insurance companies, 90.8% of advisors read firms' market commentary/outlook and 67.4% of advisors think that such information is important (rated 7-10 out of a possible 10). And while most firms offer market commentaries and outlooks, not all firms do so as effectively as others.

As firms look to develop market commentaries and outlooks, they should:

• Be Timely: 32.5% of advisors check market commentaries and outlooks from asset management and insurance companies on a weekly basis (including 5.2% that read them daily), making them the most regularly accessed materials. It is critical that any commentary posts promptly as advisors (and their clients) are looking for insights that relate to the latest news. Unfortunately, too many firms struggle to produce content, have it approved by compliance, and have it posted to the website in a prompt fashion. JPMorgan Asset Management, however, is consistently a leader in this area - its renowned "Guide to the Markets", for example, was updated through year-end by the first business day of 2012.
• Be Digital: 53.9% of advisors prefer to access market commentaries and outlooks online as opposed to 36.9% that prefer hard copy versions, according to the kasina FA Vision survey. Rather than simply posting a link to a PDF file, firms such as BlackRock and PIMCO recognize that it is important to provide multiple options, including HTML, PDF, audio, and video formats that make the content more engaging and easier for advisors and others to consume.
• Be Substantive: When asked what differentiates one firm's commentary/outlook from another, the most common response was "content quality" (cited by 45.9% of advisors). While timeliness and ease of comprehension are both important, it is most critical to have something meaningful to say. Too many firms' commentaries lack true insights and simply provide a backwards-looking view of what happened in the markets - information that advisors already receive from industry news sources, such as the Wall Street Journal, CNBC, or Yahoo! Finance. Valuable commentaries provide the asset managers' views on what has happened and, ideally, what the firms' investment experts expect to happen in the future and the impact of those activities on the investments.
• Be Social: Given that nearly a third of advisors share market commentaries and outlooks with their clients, it is important to make it easy for advisors to pass along the material (either via e-mail, hard copy, or social media). Similarly, as social media continues, firms need to incorporate the ability for advisors to provide feedback, as Pioneer has done with its new blog.

Opportunities and Threats: Predictions for 2012

By Steven Miyao

This post by kasina's CEO Steven Miyao first appeared on Ignites, a preeminent source for news about the mutual fund industry.

2011 was a tumultuous year, one that left most industry executives deeply uncertain about the future. The following predictions are meant to provide the industry with ten key insights that should help clarify some of these uncertainties.

Overall Industry Trends:

• Profit margins will slightly decline as a result of sideways markets and increase fee pressure from large distributors. With Europe continuing to grapple with economic upheaval and quite possibly sliding into recession, as well as continued economic challenges in the US, markets will not provide any support for increased margins. A number of distributors, including Morgan Stanley, have started or continued to increase fees for funds distributed through their brokerage platforms. We anticipate this approach from a majority of large broker dealers as they struggle to operate with margins that are less than half of those in the asset management industry. Based on our analysis of publicly available asset managers, kasina predicts that 2012 operating margins will dip from 30.5% to 29%.
• M&A activity will increase as European banks face pressure to raise capital in order to meet the requirements of Basel III. Some European banks with large capital shortfalls -- including Societe Generale, Deutsche Bank, BNP Paribas, UBS, ING, and others -- will likely need to make serious capital divestitures to avoid FSB surcharges. We anticipate that at least three European banks will put their US asset management arms on the auction block in 2012 to raise capital. This will further consolidate assets among the top fund families, but also provide mid size or insurance players to gain the necessary scale to compete in the US market.
• Investors will also replace core U.S. equity mutual funds with equivalent ETF strategies. At least one of the large US players will add ETFs to their product lineup to diversify their offerings. Advisors will continue to be frustrated with active U.S. equity funds, which fail to produce significant alpha to offset higher fees. Core U.S. equity mutual fund strategies will see significant fund outflows (>$35BN) while core U.S. equity ETF strategies will see significant inflows (>$25BN).

Product Trends:

• In 2011, the increased demand for alternative funds was not matched by product development trends. Only 12% of new fund launches were in alternatives. But as distributors (both home offices and advisors) start to demand more products that better mitigate risk or provide higher returns, many more asset managers will make alternatives a major strategic focus. Based on historical trends and heightened demand, we expect alternatives to represent roughly 18% of new fund launches in the coming year.
• Insurers are poised to grow and seek out new business opportunities. In 2012, insurers will focus on restructuring their business and investing heavily in asset management. Insurers will seek out further investments in their asset management businesses (i.e. John Hancock), acquire mutual fund firms from European banks looking to raise capital, and lastly create new forms of guaranteed products in partnerships with asset managers. This means greater competition in the asset management space from firms that are well capitalized and have experience selling to financial intermediaries.

Distribution Strategy Trends:

• Gaining scale in Distribution will be the theme for the year. In 2011, 58% of asset managers and insurers used hybrids. That number will increase to 65% next year as more firms realize that hybrids can, on average, produce over 80% of the gross sales of externals at just 40% of the cost. In addition, we will see at least 15% of firms go beyond a 1 to 1 coverage model by adding internal wholesalers.


• Firms will become more effective through segmentation. Going beyond today's simplistic A-B-C approaches, 8 out of the top 20 asset managers will have sophisticated strategies to segment their advisors. These approaches will be based on a calculation of future value potential to determine WHO to interact with, along with a review of advisor preferences and behavior to determine HOW to interact.

e-Business Trends:

• Traditional wholesaling leaves most advisors untouched. A mid-size firm can typically reach only 5% of the 300,000 US financial advisors. While firms need to segment and prioritize wholesaler interaction to make sure they reach the right 5% of advisors, that still leaves over 286K advisors with valuable potential assets beyond the firm's grasp. In 2012, over a dozen firms will have developed a strategy to use the Web to sell to advisors who are not covered by wholesalers.
• In 2011, 69.9% of financial advisors used mobile devices to access business content, and advisors are spending more time on mobile platforms than ever before. To meet the demand for mobile access and increase productivity, at least 50% of the top 25 asset management firms will rollout tablets to their wholesalers. A few leading firms will join the ranks of JPMorgan to develop enterprise apps for field wholesalers.
• All four wirehouses will announce policies to give advisors access to social media tools in some capacity. Pressure will come from advisors who demand it as a business necessity. Broker/dealers need to stay competitive with what they are offering their advisors. Advisor usage of social technologies is inevitable, and in 2012 we will see the continued adoption of social media as a platform to engage and interact with advisors.

2011 - A Transformational Year in the VA Market

By Jesse Mark

In the beginning of the year both ING and Genworth exited the VA space. Other firms, including John Hancock and Amerprise, cut back on their distribution efforts, and just last week Sun Life abruptly announced their intention to stop selling VAs.

Despite strategic decisions by some firms to scale back or wholeheartedly exit the VA market, VAs as a product are here to stay. The 2008-2009 financial crisis is still fresh in investor's minds and increased market volatility is creating a surge in demand for insurance-like products that offer downside protection.

VA providers can't control market movements, but they can control their distribution strategy. To be successful in this challenging and ever changing environment, VA providers will need to focus on selling and servicing via the Web, the ideal scalable resource. Whether providers are looking to ramp up VA sales or cost-effectively service existing contract holders, online content, not traditional wholesalers, is the tool that can be leveraged by an unlimited number of advisors at minimal cost to the firm.

Advisors expect the Web to deliver instant information. In fact, our latest research report Top 5 Variable Annuity Websites for Financial Intermediaries shows that 51.1% of advisors that do significant business in VAs would rather go online than meet with a wholesaler. Unfortunately, there is a notable disparity between the user experiences on most VA provider sites and those found on other financial services sites.

While some VA providers have launched new sites or implemented major web enhancements, a number of firms' websites are causing frustrated advisors to find answers from their competitors.

A Look Back at 2011

By Steven Miyao

It's that time of year again, when we look back at our predictions and see how accurate they were. In 2011, I hit 9 of 14. The main challenge in doing predictions is getting the precise timing right, so a number of our predictions from 2011 will pop up again in my forecast for next year. Below, we revisit our 2011 predictions and see what actually transpired.

1. Emerging markets growth continues to outstrip U.S. growth, and U.S. firms start to focus more heavily on international products and clients. We will not only see assets predominantly flow into these categories, but also largely new fund or ETF products come to market in these categories.

Outcome: Asset managers are certainly focused on capitalizing on the growth opportunities presented in emerging markets and internationally-focused funds. In 2011, almost one third of new funds and ETFs were created to focus on emerging markets or international equity strategies. In terms of YTD flows, EM strategies witnessed $19.3BN in inflows, while U.S. equity-focused strategies bled $62.2BN in outflows.

2. Markets will soar next year as corporate profits and the economy improve. Flows will gravitate back to equities from fixed income products as confidence in the economy continues to improve. Late-year concerns over whether governmental fiscal discipline is achievable could hinder the enthusiasm. Interestingly, Year 3 of presidential terms is generally the best year for equity returns.

Outcome: We were on point for the first half of the year: corporate profits improved and reached record levels, and markets surged. We were also right about confidence sagging because of the government’s lack of fiscal discipline, as evidenced by the acrimonious debt battles in Washington and the subsequent downgrading of US debt. But we did not predict that, beginning in the third quarter, European debt woes would have such an impact on markets.

3. M&A activity will increase as firms start to have more confidence in the economy. Foreign as well as domestic powerhouses will make strategic acquisitions to broaden their product offerings. Small to mid-size firms with entrenched brand names or specialized product expertise are attractive targets.

Outcome: M&A activity actually decreased, with total transaction size and average deal premium down. Transactions concentrated more heavily on mid-size asset managers, deals ranging from $500MM to $1000MM. Most transactions were based on strategy initiatives, with only 6 bankruptcy-based deals to date, compared to 18 in 2010. The slowdown in M&A activity was most likely the result of acquirers feeling that relatively high valuations are making acquisitions too risky. We anticipate M&A activity to increase next year.

4. ETFs continue to proliferate, grow and pick up one-third of all mutual fund and ETF flows; ETFs will finally start to gain traction on retirement platforms in a meaningful way. Another top 20 fund family will acquire or start rolling out ETF products.

Outcome: ETFs picked up a whopping 45.9% of total mutual fund and ETF flows. There is limited data available on ETFs in retirement platforms, but a growing (yet still small) number of 401K platforms are opening up to ETFs and we will likely see more in the next year.

5. By mid-year, positive flows into equities will exceed flows into bonds.

Outcome: Equity flows started the year in the positive, outpacing fixed income in the first quarter. But by mid-year, fixed income flows exceeded flows into equity.

6. Assets will continue to consolidate among the top ten fund families. Distributors will increasingly push for the roll-out of exclusive products (branded products only available through a specific distributor) with these preferred partners.

Outcome: While the concentration of assets in the top ten fund families stayed roughly the same in 2011, we continue to believe that consolidation is imminent. Recent announcements from MSSB (as well as likely announcements next year from competitors) will increase distributor revenue sharing and make it more difficult for mid-size asset managers to distribute through large distributors, where the majority of advisors and assets are.

7. National Accounts teams continue to become more prominent, as fewer platforms exist and advisors use fewer providers, and getting on the shelf becomes more vital. Firms will add to their National Accounts teams and will increase compensation for those teams.

Outcome: We were right on point. 96% of asset managers and insurance firms believe the importance of National Accounts teams is increasing. Advisors are using slightly more providers, but getting on the shelf is more vital because more advisors are taking their cues from the home office. National Accounts compensation also increased. 65% of firms are increasing their National Accounts budgets and 73% are boosting staffing.

8. Despite the fact that firms are trying to focus on profitability, most firms will not resist the temptation to staff back up with external wholesalers and ratchet compensation up to pre-recession levels.

Outcome: 81% of firms are planning to increase external wholesaling staff, but economic woes and weak flows have kept compensation relatively flat. Compensation is not quite at pre-recession levels.

9. Several firms invest significantly in segmentation to better differentiate their advisors. These firms will then use this segmentation to direct their wholesalers, website and marketing efforts.

Outcome: Many firms have invested heavily in segmentation to differentiate advisors based on lifetime value, but only a few leading firms have created segmentation strategies to differentiate advisors based on behavioral and interaction preferences. We continue to believe that firms will begin to realize that segmentation is a business necessity, one that enhances profitability and reduces distribution costs.

10. Asset managers will continue to expand their focus on RIAs. 50% of firms will segment coverage of RIAs by AUM. The trend in the industry is increasingly towards segmenting coverage of RIAs by AUM.

Outcome: Our most recent research on the RIA channel shows that 32% of firms with a dedicated team segment coverage by AUM. But 79% of firms target the small pool of mega RIAs, which each manage assets over $1 billion. We expect to see more firms begin to create low-cost strategies to cover the enormous pool of small RIAs, where valuable opportunities exist.

11. Firms look to lower marketing & distribution costs by increased use of the Web as a wholesaler, particularly for lower-AUM clients. A number of firms will set specific website sales goals for advisors who are not covered by a wholesaler.

Outcome: An increasing number of firms are indeed focusing on designing Web strategies with the goal of selling and servicing advisors who are not covered by a wholesaler. We will likely see continued developments in this area in 2012.

12. Social media will continue to become more relevant to engage with investors, advisors, and institutional clients. Over 50 investment management firms will be on twitter next year.

Outcome: This has certainly been the case. Our latest count puts the number of investment management and insurance companies on twitter at exactly 50. Leading firms are integrating their social media efforts with the Web using a live twitter stream.

13. Mobile efforts will expand greatly; apps start to attain dominance over site optimization for Web. Ultimately, there will be competition in the apps space and "app overload", but not short term. We will see enhanced mobile support beyond the mWholesaler platform. Over 35% of firms will roll out tablets to their wholesalers.

Outcome: Many of the large firms have rolled out tablets to their wholesalers. Mobile efforts are expanding with some firms developing apps, but app development is still in its infancy. We are already beginning to see enhanced mobile support beyond the mWholesaler platform. JPMorgan has developed an enterprise app for wholesalers and a number of firms are currently in the developmental stages. Expect to see continued mobile efforts in 2012.

14. We will see many firms make the investment in more intelligent tracking/analytics to better understand their Web traffic.

Outcome: There has been more talk than action on this front. Some leading firms have integrated key systems like CRM, CMS, and Web usage, but most firms are still dragging their heels and putting off the investment until the future.

Client Account Access: A Key Aspect of Premium Institutional Service

By Saadiah Freeman

Superior account access, financial management, and transaction features are fast becoming the norm in the retail banking space. Customers with leading financial institutions are able to view information about all their accounts in one place, easily transfer funds between their accounts or to third parties, manage their finances using interactive tools, and access account information using mobile devices. Increasingly, banks who fail to offer these options will begin to lose business. In fact, I recently canceled a credit card with a major bank because I was unable to view checking accounts and credit cards on the same screen with a single login. Apart from the inconvenience, I was concerned about how this inefficiency might be reflected throughout the organization, so I decided to take my business elsewhere.

In contrast to the sophisticated account access tools offered by many retail banks, kasina's research identified that many institutional asset managers are still using outdated technology to provide secure access to their clients' accounts - that is, if secure account services are offered at all. Many firms' client account portals offer little more than basic data and reports, and feature a dated look and feel that is a long way from current online design and data visualization standards.

Institutional asset managers frequently justify their shortcomings in this area on the basis that institutional investing is a high-touch business, where clients expect relationship managers to provide them with the analysis and reports they require and therefore do not need extensive self-service access.

Although it is certainly true that institutional investors expect premium service, leading firms recognize that a top-notch client website, including comprehensive data and reporting functionality, is a key component of delivering this service. Benefits of providing premium account access functionality include:

• Providing clients with 24/7 access to their data, enabling them to respond to information requests at a moment's notice
• Enhancing the firm's brand by delivering a polished experience online
• Reducing time spent by the firm's account executives on pulling reports and data, enabling them to focus on higher-value client conversations and activities

Although the institutional investment space may seem a far cry from retail banking, decision-makers at institutional investor organizations - and the relationship managers who work with them - often cite their personal online banking experiences as a benchmark for the account access services they would like to see more asset managers deliver. Although their services are quite different, many institutional managers would do well to learn from retail banks when it comes to delivering full-featured, high quality client account access features.

Replicating the High Touch Model Online

By Lee Kowarski

Yesterday, I had the pleasure of hosting a BrightTalk event to share some of the findings from kasina's recent Top 10 Web Sites for Financial Intermediaries report. Together with Devon McConnell of JPMorgan Asset Management and Paul O'Connell of Putnam Investments, we explored some of the themes shared amongst the "Top 10" sites, as well as specific best practices from JPMorgan and Putnam. The event, which is now available to be viewed at www.brighttalk.com/webcast/5347/36069, hit on a number of topics - to me, a few highlights were as follows:

• Personalization & Integration of Systems - Increasingly, online success requires a personalized experience where firms match the right content to the right advisor at the right time. Unfortunately, most asset managers and insurance companies are not able to tie online behavior to offline behavior or to sales results, meaning that the Web site operates as a silo within the organization. Leading firms have spent the past several years working to integrate systems and enable more targeted communications.
• "Lowering the Wall" - For years, advisor Web sites have put up "walls" in front of their content in the form of lengthy registration processes with little insight into what is behind the wall. Putnam is amongst the firms that have simplified this process by allowing advisors to preview the content on the firm's new advisor Web site and allowing a basic form of authentication using simply the advisor's e-mail address. Similarly, JPMorgan shared that their approach is increasingly to offer "glass walls" wherever authentication is required, making it easy for advisors to understand what they will be accessing.
• Freeing Content - While a firm's advisor Web site remains a critical piece of the overall digital strategy, firms such as JPMorgan and Putnam are recognizing the need to allow their content to be accessible across the Web. As with many of the "Top 10", both firms are making it easier for advisors to share content and are also posting their content across the Web (on iTunes, Facebook, Twitter, YouTube, SlideShare, etc...).

To learn more, you can download a sample of the Top 10 Web Sites for Financial Intermediaries report, watch the full BrightTalk event, or shoot us an e-mail at research@kasina.com.

Are you Branding Effectively?

By Jesse Mark

As part of kasina's research for our latest paper Top 10 Web Sites for Financial Intermediaries in 2011, we performed advisor Web site reviews of 45 asset managers and insurers. Among the hundreds of metrics we looked at, the one I want to focus on is branding.

Why focus on branding? Because it is the one aspect of the Web site that most frequently poses questions and provokes debate among e-Business and digital marketing teams.

When analyzing the firm's brand image on the Web, I have seen some firms create long check lists of criteria to evaluate uniqueness of color palette, discussion of the firm's history and financial strength, power of the firm's value message, etc. The list goes on. But lists are unnecessary - not because the Web shouldn't do all of these things, but they are failing to measure whether you are truly "branding" your firm any differently than your competitor. Branding isn't a check the box activity. To "brand" your Web site effectively, your firm's name and Web site must encompass an identity which affects the personality of the products you sell. It needs to be unique!

Take a look at the screenshot below from the products page of a consumer electronics store. I have blocked out any reference to the store name. Even if you have not shopped on the site recently I bet you can recognize the company, why? Because the firm has developed a total marketing and branding strategy that encompasses the offline, online, and in-store experience.

Now take a look at an online fund profile from one of the top fifteen largest asset managers. Can you guess which fund company it is? It isn't as easy as the last example. As firms invest in advisor sites, many are still missing a resonating message as to why their firm is any different from other firms selling almost identical products.

In the coming years firms will need to "catch up" with their peers outside of the asset management industry, who are far ahead in creating integrated marketing campaigns and effective brand messages.

Extending Your Sales Force to the Web

By Helen Gurina

Many clients would like to connect their Web site to the firm's bottom line, yet few keep a clear line of communication between sales and e-Business. Getting sales involved in the design and promotion of online material can be an invaluable resource for making the firm's Web site a success. It will also ease the workload of sales and service personnel.

Internals and externals are in front of advisors every day. They can and should be leveraged to inform e-Business teams about concerns advisors face on a daily basis. Listening to wholesaler feedback can help e-Business teams create relevant content, make navigation advisor-centric, and design tools that advisors want to use. Ask sales what queries they receive most frequently and which can be easily served by the web. As a corollary, sales will feel confident in the firm's Web site and be motivated to drive traffic to the Web site. The self-service on the site will unburden wholesalers' days now that an advisor can download a stock report on their own without asking for it to be e-mailed. If they helped to design the site, sales will be more familiar with helping advisers find it and more comfortable knowing that it can indeed serve their needs.

Though some wholesalers don't immediately see what the online business has to do with their highly in-person line of work, their reservations can quickly be alleviated. Picking up the phone is not always a valuable meeting if the adviser is just calling to ask the same question he calls about on a weekly basis. As kasina's Web Lift research shows, an adviser covered by a wholesaler has more AUM with the firm if he/she is also uses the firm's Web site. An adviser served and informed by the Web site will still be encouraged to reach out to a wholesaler, ideally by a prominent photo and contact details, for more meaningful conversations. It also eases the load on the service desks if wholesalers direct advisers online to a highly functional site. Promoting an attitude of extending the sales force online can both focus online initiatives and help sales engage in more meaningful conversations.

kasina recently participated in a webcast discussing how firms can meet advisors' online expectations. You can listen to kasina's CEO, Steven Miyao, and other industry experts discuss advisors' online behavior by clicking here.

Two Out of Three Advisors Say That Online Capabilities Impact Their Product Usage

By Lee Kowarski

Like anyone who uses the Internet to shop, check e-mail, catch up on news or socialize, financial advisors have come to expect an attractive, interactive online experience from insurers and asset managers - one that delivers instant information and results. Indeed, two-thirds of advisors say that the quality of a firm's online capabilities impacts their use of its products.

For the past twelve years, kasina has monitored how financial intermediaries use the Internet. For our 2011 What Advisors Do Online report, we delve even deeper into how advisors use social media and mobile technology, along with Web sites and e-mail.

This Thursday afternoon (9/22), we will unveil the findings from What Advisors Do Online during a live BrightTalk event featuring kasina's CEO, Steven Miyao, and Allianz Global Investors', Catherine Carroll. To register for the live event, or to access the archive afterwards, visit http://www.brighttalk.com/webcast/5347/34471

Among the findings and recommendations that will be discussed are:

• Delivering content where advisors spend time online


• Targeting content to client segments


• Addressing common advisor complaints


• Leveraging wholesalers to push online capabilities


• Rationalizing e-mail


• Connecting with social media and mobile devices

Frankenstein's Website

By Helen Gurina

Asset management firms are largely aware of the range of features that exist among their competitors' websites. From navigation bars to content modules on product pages to handy pop-up videos there is a huge array of features that can be handy to an advisor. Asset managers have added a checkmark next to each feature on the extensive laundry list, or are working on creating the ones they are missing. However, it is easy to lose sight of the goal behind all these rich features and tools. They must all work harmoniously to represent and sell your products. They must address advisor needs in a quick and efficient manner. Often, significant streamlining is in order for websites to adequately represent the company vision as well as to provide a quick user experience. Without these streamlining efforts, a firm's website may increasingly resemble Frankenstein's monster with each passing year.

It is harder to cut features that have been painstakingly developed than to bring them to light. When significant time and resources were utilized in creating a feature, the inclination is to employee it at least somewhere. Given that features have been created over many years, and changed by internal and external forces along the way, the final product is often more of a quilt than a uniform weave. It provides headaches for advisors attempting to navigate awkward transitions and for internal teams trying to map the flow of data between back end modules. Though this is the result of a natural development process, it is not a finished result. However, firms face the pressure to keep moving forward and develop even more features in order to not fall behind. A good portion of these may be workarounds for outdated technologies or presentations, but it seems like there is no time to pause for fear of falling behind the competition.

Eventually, a firm needs to step back from their creation and figure out how to make it pretty and unified again. Few remember that Frankenstein’s monster was an eloquent and remarkably strong creature; they just remember his grotesque face. Appearances matter, for an advisor will judge the site you spent years building in a matter of minutes. Features will need to be cut and the remaining made to flow together. An advisor does not need a dozen ways to filter and select a product, if one solution can give them the desired results. They also don't care that different teams may have made pages that now live in the same section.

To make sure the advisor experience is a smooth and compelling one, streamlining the website must be made an ongoing priority. This requires a single responsible party behind the scenes to head up the initiative, but the input of all departments to accomplish and maintain. It requires metrics to assess which features are most commonly clicked on and how advisors navigated to them. It requires analytics to back up decisions to remove features which were somebody's favored brainchild or the corporate standard. It is a difficult task but ultimately one which will allow your firm's hard development efforts to shine as a whole.

Video Chat - A Potential Tool To Connect With Advisors

By Saadiah Freeman

The best mutual fund and insurance company Web sites enhance the relationships between advisors and their wholesalers, strengthening advisors' sense of connection with the firm each time they log in to the site. Personalization features that show advisor's pictures and contact details of their assigned wholesalers are an important tool that many firms use to reinforce the sales relationship. An advisor who thinks of a question while browsing a firm's Web site, can easily pick up the phone and call her key contact on the internal sales desk. Photos and brief bios humanize the voice on the end of the line, which is helpful in building connections between advisors and internal wholesalers, who rarely - if ever - meet in person. But what if, instead of picking up the phone, advisors could instead contact their wholesalers via video chat, linking directly from the company's Web site?

Client service businesses in other industries are increasingly recognizing the power of video chat as a tool for delivering high-touch services remotely, at a much lower cost than in-person meetings. In the field of psychological counseling, where trust, body language and relationship-building are critical, providers like www.breakthrough.com and www.lionrockbehavioral.com exclusively operate using video chat. The format is also becoming increasingly popular for tutoring, with music, language and even makeup application teachers now offering online video sessions. Even within the relatively conservative field of financial services, video chat is beginning to gain traction; for example, Philadelphia-based startup advisory firm Veritat (www.veritat.com) has adopted an entirely video-based model for delivering financial advice.

Although free online video calls have been available for some time, recent developments in the field, particularly the launch of Google+ and the introduction of video chat functionality on Facebook, are likely to make this method of communication even more popular going forward. This presents an opportunity for innovative mutual fund and insurance companies to use video chat to build stronger relationships with advisors, particularly independent advisors and RIAs who work in smaller offices. In fact, some firms are already outfitting their internal wholesalers with webcams so as to be at the forefront of this opportunity. In addition to providing an online forum for one-on-one meetings between advisors and their wholesalers, video calls can also be used to facilitate group meetings - for example, by using the Google+ 'Hangout' feature. This could be an effective way for asset managers to share portfolio strategy and thought leadership with their clients - having an analyst or portfolio manager host a video chat with a group of advisors.

In the relationship-driven world of investment sales, video chat is a simple and cost-effective tool that could help asset managers and insurance companies connect even more effectively with their customers online.

Bringing the High Touch Wholesaler Experience Online

By Helen Gurina

Wholesalers have a wealth of experience in turning 15 minute meetings into sales. The wholesaling model - grounded in forging strong, personal relationships in a short amount of time - exemplifies how to forge a strong connection, balance product with human interaction, build loyalty, and support a client's needs. Despite this expertise, asset managers rarely translate it to the online world. When it comes to their Web sites, they lag behind other industries in establishing trust, loyalty, support and, ultimately, sales. In order to make online distribution and service more efficient, asset management Web sites need to mimic the high touch experience of their wholesalers.

Online Coverage is Essential for Sales

Only a fraction of the 300,000 financial advisors in the United States are covered by a firm's external and internal wholesalers. The majority of advisors, including prospects and marginal clients, can only be touched by online representation. The Web site should thus be an effective sales tool and a polished representation of a firm's offline capabilities, not a static nameplate with a repository of printed materials. Research such as kasina's Top 10 Advisor Sites (2010), shows that advisors covered by the Web site produced an average 78% more sales in 2009 with asset managers than those that never used their Web sites. (For more information on measuring the Web's impact on sales, please ask us about kasina's Web Lift measure.) The Web site offers a wealth of opportunities for prospecting, servicing, marketing, sales and lead generation.

Reshape the Web site into a Virtual Wholesaler

As in a 15 minute meeting with a wholesaler, it is important to make the most of an advisor's brief time on your Web site. The Web site should treat an advisor in the same manner a wholesaler would when an advisor first enters the meeting. First and foremost, present the advisor with the information they need - the reason they set up this meeting. Most often this is product and performance information or talking points about a product. Make the products in the advisor's portfolio easily accessible via intuitive navigation, great search, and interactive presentation. Similar to a wholesaler that knows their clients' predilections and preferences, try to present this information right from the front page.

Pitch on Your Product Pages

Product pages should contain main selling points, performance and additional tools related to the conversation. This is the core of your meeting, and should be a dialogue where an advisor can unfurl additional data or visualize performance compared to other products, not a static pdf. Don't miss the chance to tell the advisor why this fund is the one they should be promoting with highlights, impactful graphics, and perhaps video commentary from the portfolio manager.

Don't Forget the Next Steps

Give the advisor some handouts to show colleagues and clients in the form of e-mail and sharing options. Now you have the opportunity to suggest some other products that might fit the advisor's portfolio or tell them about a prominent portfolio manager's market commentary. Maybe they'd like to get some tips on practice management or ideas for client events. Conclude with a reason to return for another meeting now that you have established great rapport.

At every step, apply the rationale of a human conversation with a pinch of a wholesaler's charm. Too often asset managers' Web sites present a stack of spreadsheets and leaflets at a meeting which would be far more effective as a virtual sales pitch. Applying the years of knowledge that wholesalers earned in the field to the online world would allow asset managers to provide a high touch experience to rival online retailers and social media sites.

Generic Top Level Domain Names will Impact Asset Managers

By Rubesh Jacobs

Could one have a URL such as theworldcovered.ivy? Or vanguard.etf? Or 401k.nationwide? Or any one of these in Chinese?

Yes, that time has come!!

ICANN (Internet Corporation for Assigned Names and Numbers) recently approved a historic proposal that allows the creation of domain names like these.

As we first wrote in our Industry Analysis in May 2010, the new domain naming system vastly increases the range and diversity of Generic Top-Level Domains (gTLD). As explained succinctly in an ICANN video, the changes include domain names in any language and those which can end with almost any word.

Early adopters such as Canon (.canon) and consortiums wanting to establish city-based top level domains like .nyc, .berlin and .paris submitted applications last year. But with the approval, buzz and imaginations the world over will go into overdrive.

Unlike the domain name feeding frenzy of the late 90s, owning and operating a gTLD requires capital and resources. In addition to the $185,000 application fee, to be selected to operate a new TLD, an applicant must demonstrate that, among other criteria, it has strong technical and financial capability and a commitment to comply with contractual requirements.

One of the reasons ICANN is opening the top-level space is to allow for competition and innovation in the marketplace. Therefore, a company cannot simply reserve a gTLD and decide later whether or not to use it. The application process requires applicants to provide a detailed plan for the launch and operations of the proposed gTLD. ICANN will be accepting applications from January 12, 2012 to April 12, 2012.

While developing a plan for gTLDs, asset managers and insurers should consider the following:

1. Monitor New gTLD Applications for Trademark Infringements: Unlike the vagaries of cyber squatters during the dot com boom, there is a process to object, dispute and resolve trademark and other issues.

2. Monitor competitor applications for New gTLDs.

3. Consider Technical Issues (e.g. e-mail addresses and e-mail field name changes): Whether firms invest in their own gTLDs or not, they need consider implications to their technology. For example, an investor who works for Canon could sign up for e-mail alerts using his "jim@canon" e-mail address. Current Web applications, forms, and e-mail systems will error out.

Search: A Turbo Boost for Navigation

By Rubesh Jacobs

How many times have you found a site through a major search engine, only to visit the site and not be able to find what you're looking for?

What do you do next? You go back to the search engine and click on the next site. That site just lost a lead: you.

Knowing this, e-business managers invest a ton of money and effort to create a great user interface, intuitive navigation, and effective "Calls to Action". The problem, however, is that the amount of content is only increasing and building a navigation and interface that evolves with the needs of advisors is nearly impossible.

A powerful way around many of these issues, and e-business managers know this, is to offer a powerful site search engine, so that once visitors hit the Web site, they can easily find what they're looking for.

Recent kasina research, published in the May edition of its Industry Analysis , reveals that most asset managers' Web sites lack a useful search capability! Most commonly, there are too many search results and few, if any, ways to refine the search.

Google search results can be refined further, see left-hand column.

"Lack of committed resources" is the commonly cited reason for this. That notwithstanding, here are some inexpensive ways to improve your site search:

• Get a list of the search terms used on the site along with the results of the search. Compare the actual search results to what the ideal results. Close those gaps.
• Get a list of internet search terms where your Web site appears in the top set of results. Plug those search terms into your site search. Compare the actual results to the ideal results. Close the gaps.
• Insert a new step into the development process: tag new and modified pages to be site search friendly.

A more complex and expensive option, if you are considering a re-design of your site, is to first augment the existing site search capability. We'll talk more about that later.

Asset managers have already invested in cutting site search technology. It's just not being leveraged adequately. Getting advisors to visit asset managers' sites is hard enough, so when they visit, increase the probability of them finding what they are looking for. Powerful site search will dramatically enhance the success of advisor Web sites. But, start with simple improvements.

Registration - Identify Advisors without Discouraging Their Participation

By Helen Gurina

In the age when information gets distributed freely and rapidly from user to user, an asset manager can find it challenging to strike the right balance between public and private pressures on information access. On the one hand, an asset manager needs to feed the impatient social community or they'll miss out on opportunities to disseminate ideas, drive traffic to their site, and build customer relationships. On the other hand, an asset manager must be careful not to break industry regulations, lose the ability to track individual advisors, or diverge from broader company strategies such as promoting proprietary tools. In an ideal world, all needs could be met simultaneously, but in practice something has to give in the juggling act. One area to re-examine is your Web site's registration and log in process.

Registration is perhaps the easiest area to quickly alleviate some of the hindrances to a quick, accessible experience that advisors have come to expect from online interactions. Though it is imperative for an asset manager to identify which advisors are using their site, how they are using it, and to ensure that they are who they say they are, many of these large security and performance issues can be addressed in a subtle way. Streamlining this process can go a long way to alleviating frustration advisors can have over filling out dozens of long forms and remembering a myriad of passwords for all the sites they visit.

Image: Password Hell by Ron Bennetts

You can verify an advisor's identity and gather the necessary data without sending them running to the public site or off your Web site entirely. Guide them through the process gently so that they may not even notice they registered.

• Demonstrate why they should register - Illustrate reasons for registration. Tease them with additional content that is locked unless you're registered. There is a reason you're making an advisor jump through hoops to get your content -spell it out.
• Try to make the registration form disappear - If you can tell who an advisor is without filling out any information or with just an email address - perfect, don't make them enter anything. If you can identify their record in your CRM with just an email address, let them in. Give each click and field that you require of an advisor to register login very careful consideration, and throw away anything you can live without. Is it really impossible to remove the extra fields or just tricky?
• Make login disappear - If you have the advisor cookied or otherwise identified, don't ask for their password again. If they arrived from a clicking a unique url in one of your emails, cookie them and be done. Advisors have to remember dozens of passwords and your login form might be the straw that breaks their patience.
• Make password recovery easy - Some of your advisors will forget their passwords or login names, or both. Make it easy for them and for your team to get the advisors back on track.
• Gather information afterwards- Just as you have to ease into registration, ease into data gathering after you establish a relationship where the advisor is hooked on the value your web site it providing. You can figure out their email preferences, mailing address, product interests, and favorite color after you have them engaged. Tucked away under account settings, implied from clicks, and surveyed topically - there are many ways to build an extensive profile. People are willing to disclose a tremendous amount of information if you show them the benefit - just look at how much data Facebook gathers.
• Don't leave them hanging - Hold the advisor's hand the whole way by illustrating how long the process is going to take and reward them for every step accomplished. Always have the next action in mind, so once you have them registered, reward them with a graphic and show them around. Guide them around the key features for which they registered.

Is Search Engine Optimization (SEO) Important for Asset Managers?

By Helen Gurina

While asset managers go to great pains to perfect their Web sites, they're not always concerned with how their advisors and clients get there. Most industry professionals are familiar with search engine optimization (SEO), yet this straight forward process is often not maintained, or omitted altogether. SEO may not be a silver bullet to solve all traffic needs on its own, but it is an important factor. Often companies' results are buried under Google Finance, Yahoo Finance, Morningstar, Bloomberg, Investopedia, Wikipedia, and a slew of industry blogs. In other words, you're not an advisor's first source of information and they may not even get to your fund profile page. Despite the low time and cost required for SEO, many asset managers do not rank highly in search results for their own funds, never mind product categories of interest.

Many advisors use a search engine extensively during their work day. If an advisor is looking up a new absolute return product or trying to remember the key talking points about your large cap growth fund, your Web site should be top of the first page of results. If you are promoting new thought leadership about LDIs, a high page rank can drive not only activity but sales. Though advanced SEO strategies can become complicated, the basics of SEO are simple. It is worth the relatively low investment into SEO to make sure your site is their primary source of information about your products. Just a few simple steps can improve your page rank:

• All titles are descriptive, with the company name and a message, not "Landing Page"
• All content is accessible by and preferably mapped for search engine crawlers
• You encourage links to your content and reciprocate with respected industry sites
• Your pages include meta data, load quickly, and have no broken links

There is no reason to forgo checking your SEO periodically, it is completely free and takes but a few seconds to see how you're doing. Simply type in your company name and a few products or articles of importance on your Web site, and see what happens - you may be surprised. Don't miss announcements about little tweaks that Google, Bing and others continuously make, as forgoing a simple adjustment can cost you ranking. The good news is Google continues to add factors to identify professional sites and weed out link farms, which gives asset managers a leg up in optimizing SEO (at least against non-industry sites), since their site infrastructure is properly executed.

Consider employing more advanced methods of driving SEO traffic, such as adjusting content to trends in advisors' search queries. Search not only remains an important factor for driving traffic but continues to evolve, embracing new technologies, devices and platforms. Is your site's social media prepared to generate search results driven by social connections? Today's advisors are an increasingly impatient audience as they come to expect the speed and efficiency of social media sites from every site they visit. Don't lose your audience, what's worse than customer criticism like the iconic Twitter Fail Whale, is a ringing silence across a Web site you invested in perfecting.

A Strong Steering Committee will Drive Mobile Strategy Forward

By Rubesh Jacobs

Anyone reading the industry press realizes how excited firms are about giving iPads to their wholesalers. Based on work with clients, kasina published an interesting article titled "So you decided on iPads for Wholesalers. Now what?" in the May 2011 installment of its Industry Analysis. Of the key points mentioned there, I want to cast a spotlight on one in particular: the need for a steering committee to drive the mobile strategy.

Why Form a Steering Committee?

• Initial and on-going alignment with overall strategy: As with any new and innovative idea, the goals and benefits of implementing the mobile strategy must be aligned with the firm's overall strategy, and, as market conditions change, so should the mobile strategy. To this end, it is also imperative that all the departments who need to be involved with the project are represented. Only a cross-functional body comprised of senior executives having a thorough understanding of the firm strategy, as well as how best to leverage the mobile capabilities, will continue to point the initiative in the right direction and guide its path.
• Resource allocation: The firm should leverage all resources available and allocate them to where there is the greatest return. A body with broad understanding and control of the firm's resources can direct them towards the mobile strategy.
• Issue resolution: As mobile strategy projects progress, technical complications will undoubtedly arise, budgetary questions will be raised, and changes in priority and timelines will be requested. Only a body with the clout to enforce its decisions will enable the projects to progress.

How to Set Up a Steering Committee

1. Select a top executive with the following attributes as the Sponsor:

• Knowledgeable advocate of mobile strategy
• Leader with influence on the firm's strategy
• Visionary with the gravitas to propel the mobile strategy forward

2. Establish a cross-functional committee of senior executives (from sales, marketing, IT, compliance, etc) who:

• Align mobile strategy firm's interests
• Are aware of and able to prioritize user interests
• Make clear decisions and enforce them: Resolve issues / prioritize / make firms resources available
• Hold the project manager and team accountable

3. Clearly outline the objectives of the steering committee, its role, frequency of meetings, and agenda topics.

There are ample reasons why new technology implementations are bungled. But firms can set up a steering committee with a set of strong executives who will help the implementation of the mobile strategy stay focused, pragmatic, and impactful.

Discover What Advisors Do Online to Build an Effective Web Site

By Jesse Mark

According to FA Vision, 71% of advisors said that an asset manager's online capabilities impact their use of the firm's products. Since the stakes are high, firms need to discover what advisors want and then build the Web to serve as a competitive distribution channel.

How can a firm discover what advisors want in order to optimize the Web as the firm's most scalable distribution resource? Firms should consider the following:

• Solicit feedback from key internal and external stakeholders. Surveys to advisors, investors, and employees can identify important content and functionality that users find deficient or lacking. For example, is the Web site integrated with the firm's social media efforts or are the charts and graphs in need a facelift?
• Benchmark the firm's Web site against the competition. kasina's annual study of Top 10 Web Sites for Financial Intermediaries is widely recognized as the industry's most comprehensive and authoritative primary research on the intermediary e-Business initiatives of asset management companies.
• Analyze what related industries such as banking or credit cards companies are implementing online. Discover what mechanisms they are using to reach their key audiences.
• Learn what advisors are doing on the Web. As technology continues to evolve at record speeds, online behavior of advisors has also changed rapidly. See how these changes have taken hold in kasina's yearly What Advisors Do Online report.
• Create a firm wide contest soliciting ideas for how the Web could better serve advisors. Employees know the firm's advisors well, so let employees get creative and submit ideas.

The PlayBook is No iPad

By Lee Kowarski

The BlackBerry PlayBook, RIM's new iPad-competitor, has been getting a lot of press since its formal unveiling last week, but I would caution firms from jumping on the PlayBook bandwagon too quickly when it goes on sale this week.

Before I get to some of the reasons for caution, here are some of the main reasons that someone in your firm will be pressing to use PlayBooks over iPads:

• Security - most firms have experience working with RIM on enterprise security and are comfortable that the built-in security features of the PlayBook will keep sensitive data secure. This familiarity (even more so than any real security issues) is likely to lead many firms to consider the PlayBook
• Flash - unlike the iPad, the PlayBook supports Flash
• PPT - the PlayBook does a far better job at displaying PowerPoint presentations than iPads

These benefits (particularly IT departments' familiarity with RIM's security standards) will likely lead to greater and faster adoption than may be prudent. As I've written before, one of the iPad's key benefits is its simplicity. This first edition PlayBook has two key drawbacks that will make it more complex for wholesalers:

• It does not have a built-in cellular data connection
• It is missing basic built-in apps such as an e-mail program, a contacts program, a calendar, and a memo pad (not to mention RIM's popular BBM chat system)

To get these features with the PlayBook, users must use it with a BlackBerry phone connected to it wirelessly over a Bluetooth connection. Once connected, these applications show up on the PlayBook via a system called Bridge. While this system may potentially provide some reassurance to security professionals, it is cumbersome and confusing (and drains the PlayBook's battery, which already lasts less time than the iPad).

Additional challenges facing the PlayBook include:

• The PlayBook's screen - with less than half the surface area of the iPad's - is less than ideal for sharing information with an advisor during a meeting
• The PlayBook cannot run the many BlackBerry applications that are on the marketplace, requiring PlayBook-specific apps (currently ~3,000 vs. the ~65,000 tablet-optimized iPad apps and ~350,000 iPhone apps that can run on the iPad)
• The power button is small and flush with the chassis, making it impossible to find by feel and, once located, difficult to activate (this is a bigger issue than it may sound)

From what I have read, it seems that RIM rushed the PlayBook out to get a share of the ever-growing tablet market. They have already released numerous software upgrades and have plans to improve the PlayBook via future software updates to add built-in cellular data, e-mail, contacts, calendar and more. These improvements will probably make the PlayBook far more attractive to asset management and insurance companies, but the iPad will remain the dominant tablet option for the foreseeable future and is likely the best option for your organization as you build out a mobile strategy for your sales force in 2011. As PCMag.com says, the iPad 2 remains the "clear standout in the ever-widening sea of tablets" and the PlayBook is "outmatched by competitors with more versatile and complete feature sets."

Recommendation Engines: How Your Web site Will Know Exactly What Advisors Want

By Helen Gurina

Asset management Web sites could promote products and content to advisors more effectively by implementing recommendation engines. Imagine as an advisor lands on your Web site, it recommends exactly the funds she wants to discuss with her clients that morning. This perfectly tailored recommendation arrives before the advisor considers looking for such a product - if she even considered looking. Yet, based on the literature she has been reading lately and activity in the market, it fits precisely into the strategy she will promote. It is the electronic equivalent of an old friend popping in to say, "Have you seen what's happening in Asia today? Maybe you should buy shares of that emerging markets fund we were discussing." Recommending the right products at the right time is no longer the stuff of science fiction, but a ubiquitous and lucrative practice among online retailers and services.

Amazon was a pioneer in recommendation engines with their product suggestions - a practice that according to anecdotal inside sources generates 16-30% of their sales. Amazon used an algorithm to determine people who buy X also buy Y - a simple form of what is now a wide field of user-based collaborative filtering. Notice that an engine using collaborative filtering does not understand the items it is recommending or how people decide to select them. This abstraction allows the engine to recommend complex items through processes computers excel at - mathematics and statistics -without getting mired in the vagaries of human logic and sentiments. Asset managers are just beginning to explore this space and are often surprised by the scope of the project to design a recommendation engine (sometimes involving hundreds of algorithms) and to gather the data to power it. Veteran users of recommendation engines such as Netflix, Google, YouTube, Apple, and StumbleUpon rely on millions of users and gigantic data sets of preferences in order to make accurate recommendations. However, a well designed recommendation engine is well worth the challenge as it can be very lucrative. Companies do not typically release just how effective their engine is at generating sales, but it was worth it for Netflix to give away $1 million in prize money in a competition to improve their CineMatch recommendation engine by 10%.

While some asset managers understand the potential, often their first instinct is to approach online recommendations using the same logic a wholesaler would use. To give a sense for how difficult it is for a computer to do this and analyze concepts such as "equity" or "song", consider Pandora, which offers one of the most advanced logic-based recommendation engines. Their Music Genome Project categorizes each song based on 100-400 "genes" such as that this song features female vocals, house roots and meter complexities. It takes 20-30 minutes of a professional musician's time to categorize each song, and there are close to a million songs in the collection and counting. The costs of designing and running such a logic-based system for an asset manager can quickly become overwhelming in scope if the engine hinges on understanding each product.

To avoid the costly mistake of accidentally setting out to develop an artificial wholesaler's brain, you should approach the project with a thorough understanding of how recommendation engines function. It is an intricate design process that on the front end will require subtlety in presenting recommendations of new products and content in ways advisors will find helpful instead of intrusive, but the whole plan will depend on a solid foundation for the engine. When implementing an engine for an asset manager's Web site or wholesaling force, you should consider the following:

• Engines don't use logic to recommend a product - that is the forte of human wholesalers


• It is easier to build an engine around user preferences and data, both explicit and implied


• An engine using collaborative filtering will need vast amounts of data to be accurate


• It will require significant design and likely a multitude of algorithms


• Recommendation engines are most lucrative when accurate in predicting advisors' selections

Reactions To the New iPad 2

By Lee Kowarski

Sales, Marketing & IT teams that aren't already doing so should be collaborating to plan for the new iPad 2. The potential benefits of the iPad that I wrote about on this blog last February are just as true today, if not more so. Since that time, we have seen several asset managers pilot or implement iPads, including Dreyfus, Eaton Vance, Federated Investors, John Hancock, Lord Abbett, New York Life, and Putnam Investments, and we are helping many other firms evaluate iPads and other tablet solutions to support their sales force.

After following Apple's "iPad 2" event on Wednesday via Engadget, I wanted to share my reactions to the new device, which is coming out on March 11th, and its implications.

• iPad, but Better: The iPad is already the dominant tablet device, with nearly 15 million sold in 2010, largely due to its ease of use, elegant design, and (relatively) long track record. The new iPad 2 appears to be a significant improvement on the first model without impacting the cost - the iPad 2 is thinner, faster, and lighter, adds both front- and rear-facing cameras allowing video conversations, and offers an enhanced approach to a case, yet maintains the same pricing structure as the 1st generation iPad.



• Think Strategic, Not Gadget: Many firms have decided to roll out iPads because they recognized how effective they can make their sales force. I have, however, seen some firms that jump on the bandwagon and fail to plan appropriately. Simply providing wholesalers with an iPad will not necessarily boost their effectiveness. Sales, Marketing & IT teams must collaborate to determine what functionality will be provided. In many cases, firms will want to develop an "app" specifically for their wholesalers (which can be made available solely for internal use for a $299 annual fee). The rollout and training strategy becomes important as well if firms want to maximize the value that they can realize.
• Act Now: As we wrote in our recent "Mobile Strategies for Asset Managers" report, asset managers need to explore the benefits of tablets by testing iPads now and learning about their capabilities. The iPad 2 makes this opportunity only more compelling. Firms that risk waiting to see what other tablets emerge, reduce their ability to have any impact for another year.

Simple, Quick Social Media Tips

By Mariel Matero

It's no surprise that businesses, small and large, are accepting social media outlets at a rapid pace. A recent study from the University of Maryland's School of Business found that more small businesses are adopting social media, doubling the rate in the past year from 12% to 24%.

In the graph below, you'll see that most small business owners have a company fan page on Facebook/LinkedIn and regularly post status updates/links.

Source: Mashable

Having a company page and posting frequent status updates is all well and good, but is it helping the online voice of your business and if not, how can you start being heard amongst the millions of other Facebookers, tweeters, bloggers, etc?

As the kasina navigator of social media, I have found some simple, quick solutions to common road blocks that companies of any size encounter.

• No Time. If you are strapped for time, generate a list of future tweets/status updates/LinkedIn discussions for your arsenal so you can quickly plug them in and send them out. Also, if you come across a great tweet, remember to re-tweet it. The tweeter will see that you are re-tweeting and this creates an instant online relationship.
• Stumped on Blog Topics. Same as above, quickly brainstorm a list of future ideas for blog posts with notes, and then when you have to blog, you'll be one step ahead. If you have multiple bloggers, keep them updated. I send my fellow kasinians a weekly Blog Update including most recent blog post, who is due to blog, and a Blogger Tip of the Week. This creates accountability and standardizes the process.
• Not sure if your blog is "trendy". Writing a blog but wondering if your topic is popular? With Google Trends, enter your topics of interest to see how often they've been searched in Google over time. This will show a trending graph and the top news results for your topic.
• Engage in Discussion. Ask questions. Create a LinkedIn Group and start discussions. Start polling. Poll Daddy is an extremely user-friendly tool for creating polls and is easily accessible through Facebook. People like to know their opinion is being heard. You will find out what your fan base is looking for, where you can help, what you can do better, etc.

These quick steps have not only helped kasina over the past several months, but have made the process organized and easy, rather than overwhelming and arduous. A couple of months ago, our LinkedIn Group had 20 members, now we have 442 with weekly discussions filling our board!

How are you keeping up in the ever changing social media world? We'd love to hear from you!

Traffic Reporters vs. Web Analytics

By Rubesh Jacobs

Asset managers struggle to fundamentally understand exactly what their customers do on their Web sites, how effective their Web sites are, and how well their Web site usage stack up against that of their competitors. Can you, for instance, say exactly why advisors visit your Web site? How many of them actually fulfill their goal for visiting the site? And, if not, why?

Most asset managers cannot.

The root cause is that the industry is largely still only tracking and analyzing click stream information (traffic data) such as:

• Page Views


• Click paths


• Daily Unique Advisors


• Top Exit Pages on the Site

So, are we just Traffic Reporters?

Just by looking at data such as that above, one is hard-pressed to answer critical business questions such as:

• Are we building brand value via activity on our Web site?


• What are the most productive inbound traffic streams and which sources are we missing?


• What are the top five problems our advisors face on our Web site?


• What is the effect of our Web site on our offline sales?


• Have we become better at allowing our customers to solve their problems via self-help on the Web site rather than our advisors feeling like they have to call us?

Without answers to these questions, it is tough to make your Web site more effective. Answering these questions requires a multi-faceted view into Web site usage - one that is not accomplished by analyzing just click stream/traffic data.

The multi-faceted approach is what we call Web Analytics. We have defined a Web Analytics Architecture to help firms understand the value of their Web sites.

Web Analytics MUST be a part of your e-business strategy. Without it, you are driving in the dark with no headlights and dashboard. Contrary to beliefs, collecting data, analyzing, and deriving valuable insights need not be complex or expensive. Implemented by competent people with focus on answering the most critical business questions first, Web Analytics can not only prove the value of asset manager Web sites, but can also help transform the way the Web sites contribute to the business.

Real Options Thinking in e-Business Investment Decisions

By Rubesh Jacobs

We live in a world surrounded by uncertainty. As a result, managers, like our readers, are forced to make crucial multi-million dollar investment decisions with risk and uncertainty.

Our readers are familiar with financial options: the right, but not the obligation, to take action in the future. The thought process around making investment decisions in real, e-business projects is similar to that of valuing financial options.

Of importance is the way of framing e-business investment decisions - it should be less "what will we gain by investing in X?" and more "if we go down the path of building X, what other things can we do, and what will we gain by doing them?" That is, the approach will not only uncover options that increase the upside, but also limit the down-side of the investment.

Let me illustrate with a simplified case study. A client was very keen on leveraging mobile gadgets such as phones and tablet computers. Using the traditional approach in developing and analyzing a business case, his team produced a marginally positive-NPV project. The client asked us to examine the business case as well.

We found a few items that dramatically altered the business case. For example:

• The business case called for optimizing their Web site for three different mobile devices. Is it possible to avoid this? As mobile browsers such as Opera rapidly evolve, rendering normal web pages on mobile devices may not require optimization. Browsers are likely to be intelligent to optimize pages based on device. Delaying the investment, the timing option, allows our client to observe the evolution of the browser technology and then decide whether or not to optimize Web pages.
• The client also planned for 6 apps over 2 years for three mobile devices. Immediate questions were: Which devices (iPhone, Google Phone, Blackberry, etc) should one build for? Would the apps function in the same way on each device? This is a wonderful learning option. The idea is to make a small investment in a pilot/experiment to learn more and scale up/down as results emerge.
• The client was also crafting a strategy to increase growth in emerging markets. Mobile users in emerging economies are a dramatically growing segment. Consequently, the growth option to leverage mobile technologies as a sales and marketing channel was added to the business case.

Real life rarely packages options this neatly. In fact, due to the number and complexity of the embedded options in this investment decision, we recommended that our client take a staged approach.

Real Options View of Investment Decision
Stage 1a: Pilot one simple app on two different platforms and test with 100 users.
Stage 1b: Evaluate the business case for mobile apps as a sales and marketing channel within the Emerging Markets Strategy.
Stage 2: Develop mobile apps for devices based on Stage 1a. Decide on Web site optimization for specific devices based on evolution of mobile browsers.

Real Options thinking is a powerful concept if used correctly. As managers approach the 2010 budgeting and planning finish line, they should cast their projects in a real options mold. The evaluation will likely uncover not only more upside options, but also help to prevent the down-side as well.

Creating a High-Touch Online Experience for Institutional Clients

By Sujatha Sivakumaran

Last week, Eric Daugherty wrote a blog post about how institutional sites lag retail and advisor sites in functionality (read here). The argument was that institutional clients deserve the same level of ease and functionality on asset managers' Web sites as other clients. Also, since institutional clients are taking on a more active role in the investment process, firms need to rethink how they support and service these clients.

Nothing could be closer to the truth. While the institutional asset management business is largely relationship based, the role of Web sites to support such relationships is becoming increasingly important. Instead of rejecting the Web site as unimportant, managers could work towards simulating the high-touch experience online.

How can Managers Create a High-Touch Experience Online?
While there is no one line answer to this question, managers can implement a high touch service for their clients in some of the following ways:

Segmenting the site for Institutional Clients: Having a separate site for the different institutional clients (Consultants, Endowments, and Pension Funds etc.) ensures that managers provide information that is updated, relevant, and exclusive to the type of client. This will encourage clients to go to the Web site and look for information knowing that it is specifically targeted to them. Below is a graphic from the main page of AllianceBernstein which lists the different sites for Institutional Clients.

Selecting the Endowments, Foundations, and Charities site takes us to a site exclusively for such clients. This site lists research, products, and market perspectives targeted towards the client base. Similarly, selecting Investment Consultants, for instance, brings up a page with links to the pages of the different kinds of clients since consultants deal with all kinds of institutional clients.

Personalizing the Online experience: Personalizing the page clients see is another way firms can create a high-tough experience. Welcoming the client by name, having a list of previously downloaded material, including information about the particular relationship manager with his/her contact information, are all ways to enrich the online experience for clients.

Including Updated Account Information: Many managers mention that institutional clients call regularly for account information details. Transaction history and updated account information is essential when institutional clients log on to their site. In addition to account information, having portfolio summary details with holdings, attribution details, product risk characteristics, etc., can also help clients and move the conversation online.

Providing customized reports: Several clients look for similar reports on a periodic basis (weekly/monthly/quarterly). Allowing clients to define the kind of reports they want online and then making them available to clients when they need it, helps improve the servicing for such clients. Clients can also sign up for alerts as and when these reports become available.

You can find kasina's Institutional Top 5 Sites study here. We look forward to speaking with you to discuss ideas and ways to improve the online experience for institutional clients.

Getting Advisors to Use Your Web Site

By Lee Kowarski

I spent Sunday afternoon watching the ugly Jets game with a high school buddy who is a wholesaler in Chicago. I was pleasantly surprised to hear how important he thinks his company's Web site is in supporting sales and to learn that he regularly guides advisors to the Web site. This is certainly not the norm, as we found through research for our 2010 "Top 10 Web Sites for Financial Intermediaries" report. During that study, we gathered data from a number of large, intermediary-distributed asset managers about their Web site traffic and the behavior of their Web site users, along with e-Business budget, staffing, and other related information. In Q1 2010, an average of only 28% of the advisors that were registered for a given firm's Web site actually visited the site. Perhaps more surprisingly, only 40% as many advisors visited the site as dropped a ticket with a given firm. In other words, even advisors that are doing business with a firm aren't using the firm's site much. If you consider advisors that are actively doing business with a firm have the most reason to use the firm's Web site, firms should view this 40% figure as quite low, especially considering that 92% of financial advisors visit asset managers' Web sites for financial professionals, according to our "What Advisors Do Online" report.

Not all firms saw equal traffic patterns - the range in usage was quite wide. Over the years, we have identified a few steps that firms can take to drive site traffic, including:

• Pushing content - many firms take a "Field of Dreams" approach to their Web site ("If you build it, he will come.") In reality, advisors will often forget to visit a firm's site, and e-mail notifications of updates- such as commentary- can serve as a valuable reminder.
• Wholesaler support - it is critical to have wholesalers - particularly internal wholesalers - in support of the Web site. If they see the site as a threat, they can kill usage - if they see the site as a valuable tool to support their efforts, they can do more to drive traffic than anything else.
• New and valuable content - as they say, "content is king." If firms do not update material on their Web site, nor offer anything that isn't available on Morningstar or elsewhere, there is little reason for advisors to visit a firm's Web site.

Institutional Web Sites Lag Advisor and Retail Sites in Functionality -They Shouldn't!

Picture the best restaurant you know of serving you ground chuck. How about the Four Seasons Hotel demanding that you bring your own towels? Can you imagine Mercedes Benz foisting a lemon on their best customers?

Of course not. Yet, that is the way asset managers in general treat their institutional clients on the web. Functionality in the institutional space lags behind sites focused on advisors and retail clients. For years now, a common belief is that institutional sales are mostly relationship driven and that Web sites are secondary. While institutional sites have been functional and have been used, firms have not invested heavily in making them excellent.

Our upcoming report, Top 5 Institutional Web Sites, points out that today's institutional investor is not the same as the pre-financial crisis institutional investor. For entities responsible for investing substantial sums of money and for the investment consultants that work with them, there has been a seismic shift. In a new era of fiduciary responsibility, regulation, and stewardship, institutional investors have had to rethink what it is to be a responsible owner.

With institutional clients taking on more oversight and the role of investment consultants becoming more prominent, asset managers have an opportunity to differentiate themselves by focusing on providing more online support, in particular:

• Customization that allows for personal preference in the Web experience, carries over and integrates throughout the site


• Comprehensive, searchable research library (AllianceBernstein's outstanding research library is shown below)


• Streamlined due diligence information


• Mobile access


• Portable content

Institutional investors are people too. And, their expectations of an online experience are shaped by what they see on other non-institutional sites. Yet, asset manager institutional sites are at a disadvantage, as their content does not measure up. Often the first impression a client or a prospect has of the asset manager is the Web site. As the saying goes, "You only have one chance to make a first impression." If the Web site fails to make the desired impression, the opportunity with an institutional investor or consultant may be lost without the asset manager ever knowing it existed. Considering that institutional clients bring in big dollars that are enormously profitable to serve, asset managers should focus on getting their institutional sites to the same level of quality as their retail and advisor sites.

At kasina, we're looking forward to discussing the insight gleaned from this report with all of our subscribers. To discuss these findings, or other aspects of the report, e-mail us with questions or thoughts.

Tool Time

By Eric Daugherty

Advisors take basic Web content and usability for granted, so firms need to find new differentiators.

2010 marks the release kasina's 12th annual Top 10 Web Sites for Financial Intermediaries report. While we saw a similar cast of characters in this year's Top 10, the features that set the best apart from their peers continue to change.

The table stakes for having a Web site supporting intermediaries continues to rise. Everyone has baseline functionality covered: prices, performance, transactions, fundamental education, etc. What is now setting firms apart is the following:

1. News, commentary and thought leadership: 62% of high producers seek news and commentary on firm sites. Firms are putting a "face to the franchise" and putting leaders - and their thoughts- out front more.

2. Timely educational tools & materials: 48% of advisors go to advisor sites for tools. The best asset manager sites are giving more sophisticated tools that advisors can use to help themselves and their clients.

3. "Shareability": 68% of advisors share online content with their clients. Top firms are liberating content and allowing advisors to share via e-mail, social media, and other means.

Specific firms of note this year include:

• BlackRock retaining the top spot, with interactive tools dedicated to timely market opportunities - for example, an outstanding Roth IRA Conversion Optimizer (see graphic below); and resources that hone advisor expertise and help advisors educate investors.
• John Hancock continuing its run in the Top 10, with timely resources that address current market opportunities - like the Job Changers Resource Center, which gives advisors resources they can use to assist those out of work or changing careers; and ideas on how advisors can connect with clients on current topics.
• Fidelity jumping to #3 based largely on personalized user interactions, which builds loyalty based on learning about advisors' online actions, preferences, and needs.

As is evident from some of the top firms, differentiation is less about having better basic functionality and more about having intelligent things to say, and giving advisors the tools they need to serve clients better. At kasina, we're looking forward to discussing the insight gleaned from this year's report with all of our subscribers. To discuss these findings, or other aspects of the report, E-mail us with questions or thoughts.

Director of Research Eric Daugherty visits Brighttalk to discuss What Advisors Do Online

Watch here:

In July, we blogged about recently released What Advisors Do Online Report (http://kasina.com/blog/2010/07/quality_of_asset_manager_onlin.html).

Asset managers rely heavily on advisors for product distribution. More than ever before, the way to reach advisors is online. Advisors spend more than half of a normal workweek in front of a screen, doing research, e-mail, and other tasks. So, having a strong online presence is vital for firms hoping to cultivate loyal advisors as their advocates. And, advisors now say that the quality of firms' online capabilities makes a profound impact on their product decisions.

Online capabilities have gone from a novelty to an expectation to - now - a potential differentiator. Watch the recorded Brighttalk video above with Tom St. Denis of Brighttalk, Dan Ross, President of Wechsler, Ross and Partners, and Eric Daugherty, Principal of kasina, to learn more about What Advisors Do Online.

Quality of Asset Manager Online Capabilities Impacts Advisors' Product Decisions

by Eric Daugherty

The fact that quality matters would not be a revelation in most arenas, but when it comes to asset managers' online capabilities, for some reason it is a surprising finding. Some firms have approached the Web with a "check the box" mentality, but not with the commitment and gusto necessary to differentiate the firm. However, it turns out that a top-notch Web presence is more than just a pretty face for the firm; it can help to drive business.

Recently, kasina released What Advisors Do Online (WADO) 2010. We found that many of the trends identified in past versions of the WADO series were confirmed: advisors are spending even more time online, gravitate to firm intranets first, are increasingly using mobile devices to communicate, access, and share content, and are warming up quickly to social media.

Most notable was this: 71.1% of advisors say that the quality of a firm's Web site impacts their usage of the firm's products. Put simply, a good Web site translates into revenue. This reinforces the need to continue to tie e-Business team output to business metrics as we talked about in our Optimizing the Role of e-Business report.

Key Findings from the What Advisors Do Online 2010 report include:

• 94% of advisors visit firm intranets


• Over 90% of advisors visit asset manager public or advisor sites


• Wholesalers who discuss firm Web sites with advisors impact use of those sites


• 75% of advisors use some form of social media, and 22% do so daily


• A majority of advisors uses mobile devices to access work content


• More than two-thirds of advisors share content with clients

Significant recommendations for improving online quality of asset managers emerge from the report. Among these are:

• Be everywhere advisors are online (intranets, industry and social sites) with content they want


• Make content portable and shareable


• Rationalize e-mail strategy to insure relevance and interaction

Advisors have spoken. Online capabilities are more than table stakes - they can be a differentiator. Advisors are more likely to buy products from firms with great online presences. The next move is up to asset managers.

We will not have to wait long to find out which firms' sites are the best, as our annual Top 10 Web Sites for Financial Intermediaries is coming up in September.

Get Your Wholesalers to Talk Up The Web

by Lee Kowarski

As part of our FA Vision service, we recently did a topical survey about financial intermediaries' online behavior. Among the findings (which will be explored further in an upcoming report entitled "What Advisors Do Online") was the fact that there was a strong correlation between the frequency with which a wholesaler mentioned their firm's Web site and the frequency of usage of the firm's advisor Web site.

• Among those advisors that had never spoken with a wholesaler about their firm's Web site, only 63.0% visited firms' advisor sites at least once a month.
• Among those advisors that occasionally discuss their firm's Web site capabilities, 74.7% visited firms' advisor sites at least once a month.
• Among those advisors that regularly discuss their firm's Web site capabilities, 87.2% visited firms' advisor sites at least once a month.

However, when I have traveled with wholesalers, I've heard some go as far as to disparage their firms' Web site by saying things like, "That information might be on the site, but it probably isn't up-to-date - you should just call me." These sentiments are typically the result of fear and a lack of understanding. Fear that a Web site would somehow replace the wholesaler and a lack of understanding that the Web actually supplements relationships. kasina's "Your Site Can Sell, Too" report found that advisors who receive wholesaler coverage and use the firm's Web site sell 25% more than those that simply receive wholesaler coverage. We are currently gathering updated data about that metric, but every analysis that we have done with clients has found a similar relationship between Web usage and increased sales.

The bottom line is that the Web can help support sales, and wholesalers are a key driver of Web site traffic. Firms need to open their wholesalers' eyes, get them to stop trashing the Web, and get them supporting it.

Why Asset Managers Need to Invest in Social Media NOW!

By Steven Miyao

I firmly believe that asset managers need to invest in a social media strategy for three reasons:
1. More advisors use social media than use asset managers' advisor sites
2. Personal and professional use of social media is converging
3. The current benchmark for asset managers' social media use is low - it's time to experiment

I've used our latest FA Vision research, cited in this blog entry, to explore these three reasons.

More advisors use social media than use asset mangers' advisor sites

Financial Advisors spend more time online now than ever before. They average 13.2 hours/week online (not including e-mail) for work related use and spend an additional 4.9 hours/week online for personal reasons. Most asset managers' advisors are infrequent visitors to their firms' advisor sites. However, 77.5% of advisors use social media sites at least once per month (up from 74.5% last year) and 20% use them daily.

Right now firms reach a limited number of advisors through their sites. If firms invest in their social media strategies, there is the potential to connect with a much larger group of advisors. Only 48% of firms claim any social media presence and fewer than 20% intend to develop a presence in the next twelve months. This is your opportunity to shine and to build a sustainable, competitive advantage.

Personal and professional use is converging

The father of one of my son's good friends is also one of my clients. We connect on Facebook in regards to our kids' school activities and after school events, but we also share industry articles and links. Social media is clearly starting to blur the line between professional and personal networks. We co-mingle colleagues, clients, friends, family, and those who share our varied interests within our social networks.

Let's take a look at my Facebook feeds. I "like" and connect with asset managers as well as my friends and colleagues. This enables me to see what is going on with my personal connections as well as to follow what Bill Gross, Mohamed El-Erian and other industry thought leaders have to say.

The same is true for financial advisors who are using social media sites for both personal and professional purposes.

The benchmark for social media is low - it's time to experiment

Most asset managers' social media implementations are still quite rudimentary. Only 20% of asset managers have a Facebook presence, 39% a LinkedIn presence, 24% a Twitter presence, and fewer than 20% intend to develop a presence in the next twelve months. This data indicates that the social media benchmark in our industry is still very low. Still, there are a number of asset managers who are working on building deep interactions with their advisors through social media, and are even starting to segment content to advisors based on product preferences.

There is opportunity in the number of people who "Like" an asset management Facebook site (PIMCO 2,284, Putnam 323) and who follow asset managers on Twitter (PIMCO 4,519, Putnam 871). Now, when only a few advisors are watching, is the time for asset managers to experiment with this medium. Once tens of thousands of advisors are connected with asset managers on Facebook, firms will have little room for taking chances.

Firms should be building the appropriate internal processes, including compliance, and working on the cultural adoptions to allow content delivery through social media. In the next 12 months the expectations and the usage of advisors is going to be significantly higher. Firms will no longer be able to infrequently post general investment content in order to gain the attention of the advisors.

Develop your social media strategy now

Now is the time to build your social media strategy

e-Business is still too much "e-", not enough "business"

By Eric Daugherty

While the Web came of age in the mid-to-late 90's, formal e-business teams have grown up in the 21st century. Use of the Web by financial services firms has gone from a curiosity to an experiment to a customer expectation. Yet, after an average of nine years of tenure, the majority of e-Business teams at asset management firms still have huge opportunities available to drive the bottom line. Only 39% of these teams develop business plans, and 35% measure whether they meet revenue or cost targets. When asked to categorize planned initiatives for 2010, firms indicated that only 31% contain a direct link to the firm's bottom line.

Our newest report, Optimizing the Role of e-Business, reviews how teams are evolving and presents a maturity model as a framework for driving continuous improvement.

We found that 64% of firms currently operate in the "Defined" stage, with the remaining 36% in the early "Managed" stage.

e-business is more vital than ever in a marketplace where firms compete fiercely to optimize distribution of their products. Too many teams operate in a comfort zone of site redesign and process management when they need to be focused on demonstrating impact to the bottom line. With 80% of advisors using asset managers' public sites and 90% accessing advisor sites (according to kasina's upcoming What Advisors Do Online 2010 report), the economics of improving e-Business team performance and output is compelling.

In particular, we recommend that e-business teams:

• Tie prioritization of initiatives to business results
• Leverage social media to broaden customer acquisition efforts and deliver content where customers are
• Outsource or distribute non-core functions
• Value and hire for e-business expertise from other industries, and
• Use zero-based budgeting and metrics to improve prioritization of initiatives

In summary, e-Business teams have made enormous contributions and headway in their firms. They are now vital and connected to nearly every significant initiative that firms undertake. Getting to the next level of e-Business and becoming a differentiator will take more than keeping core functionality running and operating a good web site. Great e-Business teams that get to the Managed and Optimized levels will be able to prove their integration with all aspects of their firm's business and justify their efforts by pointing to the profitability impact.

Are these new-fangled technologies for me?

By Rubesh Jacobs

Social media is all the rage. Conversations about how to leverage technologies such as webcasts, webinars, YouTube channels, podcasts, blogs, Slideshare, LinkedIn, Facebook, Twitter, ad infinitum are probably going on all around you. With an eye towards managing their brands, engaging their clients, and enhancing their reputations as innovative brands, firms such as Vanguard, Putnam, and TIAA-CREF are experimenting with at least one of these ground-breaking technologies.

In fact, kasina is notorious for engaging its clients in discourse about how best to use these technologies to improve sales, marketing, and services.

However, we sometimes recommend firms delay these investments in favor of focusing on essential online services instead.

Would it not appear irrational were a firm whose Web site barely allows searching and sorting product performance information to place prominence on video updates from their chief economist? What about tweeting when your last thought leadership piece is a month old? Or spend an inordinate amount of resources on business-building tools for advisors when the advisors complain about remembering their passwords? The scenarios are endless...

The root causes are somewhere in the organizational structure, culture, strategic planning process, etc. Rarely is it a result of lack of competency, creativity, or savvy. Many firms that are experimenting with social media now have spent years getting the basics right.

So, if you are considering the use of these new technologies, I urge you to first consider the following:

1. Are your customers' basic, most important needs fulfilled now? If the answer is not a resounding "YES," then examine what you can improve.
2. Have you built support for your idea around the organization for the investments in new technologies? If you can't convince yourself that you have, then you need more time.
3. Can you articulate why some of these technologies make sense for your business? The answer should at least make sense to start a serious, fact-based discussion.

Don't let me dampen your spirits. The message here is this: be prudent about where you place your bets. The next big thing is not always the best thing for your business.

Top 5 Sites for DC Plan Sponsors and Participants Take Center Stage

By Eric Daugherty

Asset management firms are making significant investments to improve their Web sites, particularly in the Defined Contribution (DC) space. Our latest study, Top 5 Web Sites for DC Plan Sponsors and Participants, shows that these investments are being made to improve functionality that is most vital to employers and their employees.
Much has changed since our 2007 study on the same topic. Notably:

• For asset managers - technology advances have allowed them to provide enhanced user experience and functionality


• For plan sponsors - squeezed budgets and continually increasing regulatory and fiduciary requirements make ease of administration more important; in addition, participant uncertainty over retirement and increasing reliance on DC plans ramps up importance of auto-enroll, auto-contribute, and auto-increase functionality


• For participants - declining markets and increased reliance on personal saving has people paying a lot more attention to their DC plans

Asset managers have responded to these challenges by hitting those areas of most concern to sponsors and participants. Specifically, we now see much more functionality for sponsors geared toward plan and participant analysis, fiduciary compliance and participant communication. T. Rowe Price's plan sponsor site below is a great example, as sponsors use a calendar to plan and track key activities. Additionally, firms have enhanced the analytical capabilities sponsors can use to do custom reporting and drive behavior for particular participant segments (e.g. those not maximizing their contributions.)

On the participant side, firms have recognized that clients go to their site primarily for a short list of activities: to get a comprehensive look at their account balances, make transactions, and get education and advice. Consequently, firms have organized Web sites to make these areas complete, prominent, and easy to navigate.

Specific results for the Top 5 DC Plan Sponsor and Participant sites are shown below. The full report has details, including best practice functionality for each of the top sites, and recommendations for all firms.

At kasina, we're looking forward to discussing the insights gleaned from this year's report with all of our subscribers. To discuss these findings, or other aspects of the report, e-mail us with questions or thoughts.

First e-Business Steps When Going Global

By Rubesh Jacobs

Prevailing trends in the asset management industry indicate that if you are not a global asset manager already, the chances are you will be one within the next few years. If you are, then you are fully aware of the challenges that localization, local regulations, local leadership demands, and team cohesiveness pose.

Our work with multinational asset manager suggests that once asset managers become multinational companies, the e-Business organizations are unsure about what the first post-merger integration steps ought to be.
Heads of e-Business should consider the following critical initial steps:

1. Introduce yourself to the new global family: There will no doubt be countless executives crisscrossing the globe as they scramble to build relationships; develop a firm understanding about their new customers, distribution channels, and products; and regulatory requirements. Join the fun!
2. Set-up a Global e-Business Committee: At the outset, it is not only critical to establish who and how decisions will be made, but also how foreign teams will contribute and be a part of the process going forward. To this end, we recommend forming a Global e-Business Committee chaired by a Head of e-Business. Although their composition and role will certainly evolve as the new organization defines itself, at least in the beginning, the committee should primarily focus on establishing the tactical 3-month, 6-month, and 12-month plans, prioritization, and resource allocation. Ideally, the team should typically comprise the head of marketing/branding, head of post merger integration, head of IT, counterpart heads of e-Business counterparts, and heads of large or otherwise significant foreign markets.
3. Centralize management of all Web sites: While the initial decisions about branding, distribution, and products evolve over the first year, projecting a consistent and global image and sharing thought leadership capabilities are better accomplished through centralization.

• Establish a clear reporting structure, roles, and accountabilities. An imperative new role is that of e-Business Program Manager to oversee the post-merger integration of e-Business organization, technology, and processes. Prior experience working across multinational divisions and program management are a must.


• This can change as the PMI effort evolves and strategy becomes clearer. But at least for the first year, centralize. All BIG decisions will be approved by the e-Business committee.


• Drive scalability and consistency in international Web sites by using standard templates. For the most part the templates will contain common global content, but can also be reconfigured to fit the unique local conditions.

Another Important Reason for Asset Managers to Cultivate a Presence Online

by Drew Maniglia

As a part of my work on FA Vision, I have recently had an opportunity to look back at the "What Advisors Do Online" survey from 2009. I came across some interesting insights that help put to bed the commonly held belief that those advisors who frequent the Web represent a lower value group. This is a notion that I had heard questioned in several conversations, and I wanted to see if it was true.

In 2009, kasina conducted its "What Advisors Do Online" survey and the respondents had AUM ranging from $1MM to $5 BN, with the overall sample average at $120 MM AUM. The one hundred advisors with the most assets under management (the top quintile by AUM) had an average of $443 MM AUM. Trends focusing on these top one hundred advisors reveal that top producing advisors are indeed frequenting the Web to the same, and in some cases to a greater extent than the average advisor. Of these one hundred top producers, 45% reported visiting LinkedIn, and 42% claimed to use YouTube. In addition to these social media sites, top value advisors are also visiting industry specific sites like Morningstar, Ignites, and asset managers' sites - of the top 100 advisors, 75% visit asset managers' public Web sites, and 91% visit asset managers' advisor Websites. Furthermore, advisors who visit Morningstar.com on a daily basis have average AUM over 90% higher than those who visit the site with less frequency. All of this suggests that high level advisors are quite active on the internet.

I think this is useful for asset managers to internalize. Asset managers have access to a valuable cross section of clients and prospects online, so there should be a strong incentive to focus on Web strategy and cultivate a presence everywhere from LinkedIn to standard industry sites. In doing so, firms will be reaching out to some very worthwhile advisors.

How iPads May Help Wholesalers

by Lee Kowarski

Since Apple introduced the iPad, several articles have discussed how financial advisors will be among the audiences to benefit the most. While iPads can certainly be helpful for advisors, I think that the iPad will have a greater impact on how wholesalers use technology. Before the iPad was introduced, I'd already heard of several asset managers that were considering scrapping laptops for their wholesalers and replacing them with netbooks. I think that firms should now explore the opportunities presented by the iPad to enable wholesalers to access CRM information, access intranet content (e.g. brochures, fact sheets, etc.), present content to advisors (including dynamic charts, videos, and more), and more.

The iPad will boast many advantages over both PDAs (e.g. BlackBerrys and iPhones) and laptops or netbooks:

• Simplicity of use - perhaps the key advantage of an iPad is that it has an intuitive user experience that doesn't require technology expertise. Wholesalers, traditionally, are not the most tech savvy folks and will appreciate the simplicity of Apple's design
• Battery life - the iPad should be able to last a full day of meetings without needing a recharge - the same cannot be said for most laptops or netbooks.
• Weight - while heavier (and larger) than a BlackBerry or iPhone, the iPad is far lighter than any laptop or netbook.
• "Cool" factor - for at least the first several months, having an iPad will be a conversation piece with advisors.

Because asset managers are typically so slow to embrace new technology, I don't expect many firms to get iPads in the short-term, but I do think it is well worth exploring.

Social Media is Here to Stay

by Julia Binder

Asset management firms need to be where their customers are. That's not on their Web sites. It's on Facebook, Twitter, YouTube and LinkedIn.

When we surveyed executives at asset management firms last fall about compliance issues with respect to social media, 73% responded that compliance or legal concerns impeded their ability to participate in social media.

At that time, only a few firms including American Century, Putnam, TIAA-CREF, Vanguard and others had ventured into the lawless Wild West that is social media. They applied existing compliance processes and sought legal guidance to support their as yet limited participation. All waited for clarification from the SEC and FINRA.

Well, FINRA has spoken. And thus, compliance issues around third-party content and record-keeping have been addressed and effectively removed as an excuse to remain on the sidelines. That doesn't mean that firms should dive in without a plan. kasina's newest paper, The Asset Manager's Guide to Social Media, helps firms understand opportunities and challenges associated with social media. You'll find a rich set of examples from the asset management industry and others on:

• Developing a social media strategy,


• Who's doing what and why, and


• Implementing best practices in compliance and monitoring.

The lack of clear FINRA and SEC guidance coupled with the fear of legal repercussions has kept firms from plunging into social media. But consider, as communicators subject to regulation, you are used to building caution into the way you approach all communications.

Social media is here to stay. It's time to review how social media fits into your communications strategy.

2010 Predictions

by Steven Miyao

These are interesting times in asset management. Aside from ups and downs in the markets, we have seen significant changes in the economy, industry product trends, distribution and e-business. So, I will lay out a few prognostications in each of these areas:

Industry trends:

1. Bond flows continue to dominate (>70% of flows) early in the year. Flows into equities dominate (>70% of total) the 2nd half of the year, after definitive data says that the economy is improving. Continuing a long-standing trend, investor flows follow performance. Strong equity flows replace bond flows after the stock market surges and after interest rates start to rise and bond prices fall.

2. Net flows continue to go predominantly to low fee shops, as the miniscule total returns of the past 10 years magnify the importance of fees. Those shops without low fees only draw net flows if their products are truly differentiated.

3. From a trough of 18% in the 1st quarter of 2009, gross profit margins for firms climb back above 30% again (2008 margins were at 30% for publicly traded asset managers). The ultimate winners will be those who maintain their focus and fiscal discipline even after assets recover, setting themselves up for sustained, intelligent growth.

Strategy and product:

4. M&A picks up, in number if not in dollar terms. Firms have shored up balance sheets. Those in the best financial shape look to acquire in order to expand international presence, shore up product gaps, bring on an attractive brand name, and gain scale. Small to mid-size firms with entrenched brand names or specialized product expertise are attractive targets. While we don't expect to see deals of the size of BlackRock/BGI, we do expect to see a handful of mid-size household names change hands.

5. Guaranteed income products become hot, both in and out of retirement plans (albeit hotter in retirement plans than outside). Limiting downside risk in portfolios continues as a focus for retail and institutional investors.

6. ETFs continue to proliferate and gain market share. Advisors continue to gravitate clients from open-end funds to ETFs as advisors understand how to optimize usage of ETFs and firms continue plug product lineup holes with all possible flavors of ETFs.

Distribution:

7. Wholesaler compensation continues to recover. Average total compensation for external wholesalers, which was $372,000 in 2007 and dropped to $295,000 in 2008, fully recovers to 2007 levels. While the ample supply of talent looking for work should suppress wages, firms' healthier financial positions, their desire to take care of their best performers, and renewed positive net flows puts upward pressure on total compensation.

8. Ten of the top 20 firms in assets have hybrid wholesalers by the end of 2010. The cost-effectiveness of hybrids is being proven by the early adopters. Additionally, advisors indicate more willingness to deal remotely and less time to meet face-to-face, both of which point towards internals and hybrids becoming more important.

9. Firms continue to leverage technology by experimenting with video, audio, and web conferencing capabilities to deliver 1-to-1 (wholesaler-to-advisor) and 1-to-many (interactive Q&A with in-house experts) interactions.

e-business:

10. Social media becomes mainstream in financial services, but the level of commitment is varied, some firms diving in with both feet, some much more cautiously. Progressive firms experiment with different media in both B-to-B and B-to-C arenas. By year-end, 18 of the top 20 firms in assets have dedicated pieces of their budgets to social media.

11. Firms begin to move away from considering their websites as the central repository of content and towards supporting broader distributed content (e.g. SlideShare, Scribd). As print costs skyrocket, advisor only content becomes outdated, and people are free to distribute content anyway, firms will decide to make this as easy as possible by making their content portable and omnipresent. One major firm takes the leap, and spends as much on managing and facilitating data and content in the "distributed arena" as they do on their own website.

Have a Policy and Enforce It

by Lee Kowarski

As you may have read in Ignites earlier this week, Fidelity fired four workers for violating the firm's anti-gambling policies by playing fantasy football at work. While I am personally a big fan of fantasy sports and am glad that kasina does not have policies against participating, I applaud Fidelity for enforcing its policies. One issue that I see increasingly popping up in regards to the whole social media trend is the lack of uniform enforcement of corporate policies. As Christophe Veltsos, president of Prudent Security LLC, says, "The easiest way for a company to lose a wrongful termination case is to demonstrate shoddy or selective enforcement of its own internal policies."

Currently, only 34% of firms have a policy that governs employees' online activity outside of work and only 10% have a policy that specifically addresses social networking sites. Many asset management and insurance companies have general policies on the books that technically prohibit participation in LinkedIn and other social networks, but most firms do not enforce these policies. This can certainly lead to complex legal issues if firms selectively chose to act. Every firm should have a clear policy outlining what employees can or cannot do online (both at work and outside of work) and should make sure that the policy can be uniformly enforced.

Finally, please wish me luck in the fantasy football playoffs this weekend.

And Then There Were Ten

by Eric Daugherty

Firms are putting advisors' needs front and center as they upgrade their Web sites.

2009 marks the release of kasina's 11th annual Top 10 Web Sites for Financial Intermediaries report. It's amazing how far firms have come, and how much more vital and vibrant the Web is versus 11 years ago. Back then, firms were still contemplating whether (not how) the Web would become an important client service and marketing channel for them. Today, the notion of NOT having top-notch Web content, tools, and servicing is laughable.

This year's Top 10 Web Sites For Financial Intermediaries had few of the drastic site overhauls that characterized 2008. However, we did see firms striving to meet advisors' needs. In particular:

• Firms are using sophisticated underlying technology to provide a simpler user experience - simplicity through complexity; most notably, this involves bringing content "up" to the users, instead of requiring them to drill "down"
• There is an increasing focus on customization, allowing the advisor to personalize his/her experience and way of interacting with the Web site
• There is a trend towards more interactivity and multimedia content

Specific firms of note this year include:

• BlackRock ascending to the top spot, with a Tool Center that gives advisors everything they need to use the tools effectively with clients, and Conversation Starters that arm advisors with strategies to answer common and challenging client questions



• John Hancock continuing its run in the Top 10, with Dynamic Literature Ordering and a keen focus on its brand
• JPMorgan jumping from #9 to #3 based largely on its simplified presentation of fund analysis via dynamic screening, as well as its Markets Insights program

At kasina, we're looking forward to discussing the insight gleaned from this year's report with all of our subscribers. To discuss these findings, or other aspects of the report, E-mail us with questions or thoughts. Or better yet, use the kasina forum to post thoughts and questions.

Advisors look alike, but do they have the same preferences?

by Steven Miyao

Most marketing messages don't resonate with advisors because they are not pertinent to their needs. Asset managers need to invest in asking questions that enable advisors to be segmented based on preferences.

Advisors have specific needs
Last week we invited four RIAs to our e-business roundtable. On the surface, the four advisors looked alike: all were from NYC, all were male, and all had about the same amount of AUM. When asked what asset manager content most resonated with them, each had completely different needs and preferences. One advisor got a lot of value out of the business building content that an asset manager sent him, another advisor preferred to get investment ideas and didn't need the business building information.

Marketing messages need to add value
The lesson learned from this advisor panel is that asset managers need to segment their advisors based on their needs and preferences, rather than using demographic information from a CRM system.

Think about your own behavior. What e-mails do you always read?

You only open e-mails that always contain at least one or two things that you are interested in (an example might be the daily Ignites emails). If someone sends you a number of e-mails that don't have value for you, you will stop opening them. Every time these messages pop up in your inbox, you immediately delete them.

In order to have advisors respond to your messaging, the content of an e-mail has to specifically address their needs. This can only be accomplished if asset managers understand what those needs are.

Use your e-mails and the Web site to gather advisor preferences
Profiling advisors is not an easy task and can't be accomplished in one quick survey. Luckily, both e-mail and the Web are perfect mediums to collect data from advisors.

A few techniques to collect data through e-mail and the Web:

• Track the specific messages that advisors open and click through
• Ask advisors to rate both e-mails and Web content with a simple thumbs up or down
• Occasionally ask a single preference question after the login
• Conduct polls and show the advisor how the community has responded to these polls

All of this data needs to be associated with a specific advisor and continuously tracked in order for you to send more targeted messages to that advisor.

It will take time, so get started
It will take time to segment your advisors, but the sooner you start, the sooner you will be able to send targeted messages that will yield more effective responses from those advisors.

Advisors Ramp Up Online Usage, Go Mobile, Get Social

by Eric Daugherty

This week, kasina released "What Advisors Do Online 2009". We found that advisors are spending even more time on online, are increasingly using mobile devices to communicate and access content, and are warming to social media.

This study builds on our 2008 study. The last 18 months of turmoil have:

• Driven advisors online more; over half of advisors have increased online usage by 1-3 hours per week, a quarter by more than 3 hours per week;
• Caused them to see business building and sales ideas;
• Incited them to check client information more and ramp up communications with clients.

Notably, this increased online usage is happening more via mobile devices than ever before, with nearly 80% of advisors using some form of device to access content remotely.

Regarding social media, while usage among advisors is not universal, there are signs that it is increasing, and that a wave of adoption is on the horizon. About 48% and 43% of advisors visit LinkedIn and Facebook, respectively.

While we are all searching for cheap ways to be more effective, one easy way for asset managers to do this is to start building links to intranets, portals, and search engines - and make content accessible from multiple devices. This can usually fit into any strategic plan size.

Is it Easier to Service the RIA Market Today?

by Deb Wetherbee

Historically the RIA market has been a challenging channel for asset managers to cover for many reasons. Generally speaking, RIAs do not like wholesalers, do not feel asset managers contribute to their value proposition, have fickle, "entrepreneurial" personalities, and are located in disperse geographic locations. This makes coverage models frustrating and expensive. However, there are clear signs that RIA receptivity to asset managers is changing.

The current market environment has led many advisors to change firms and to shift channels altogether. In addition, RIAs core investment philosophies were tested over the last year. These facts, combined with asset growth in the channel, make the RIA channel very appealing. More than 70% of RIA's new assets are coming from full service firms, according to a TD Ameritrade survey.

By some accounts, it appears that RIAs may even be eager for your advice. We saw this in the wirehouse and independent channel as early as last December. Our partner, Horsesmouth had a record number of financial advisors seeking out content, asking for advice on how to talk to their clients, and simply looking for a place to share the horrors of the day. These sentiments were echoed at kasina's recent Distribution Summit by Ron Fiske, EVP at Fidelity, as he discussed the Registered Investment Advisors that his division services. After selling to RIAs in the late 1990's myself, it was refreshing to hear that the time may have come for RIAs to willingly accept information from asset managers. RIAs are looking to understand and to provide clients with explanations. Whether economic, portfolio related, or tax-centric, it appears that your thought leadership will now be well received.

This paradigm shift, in conjunction with the fact that RIAs appreciate web-based communication, makes servicing them a profitable proposition. Our FA Vision research shows that 61% of RIAs prefer web / e-mail based communication over the more expensive phone and in-person service. There are many successful hybrid teams servicing this channel, which is a much more efficient distribution model.

As you develop your 2010 plan and focus on profitability, think about the RIA channel. Keep in mind that you may finally be able to leverage your existing content. Review your economic and portfolio manager content and communication strategies, and think about webinars and hybrids. It is even likely that an existing business-building program is perfect for this audience. The strategy to grow your RIA business could be a profitable one for a change.

kasina Study Recognizes Top Variable Annuity Web Sites

by Eric Daugherty

In September, kasina released "2009 Top 5 Web Sites for Financial Advisors: Variable Annuities". In the study, we sought to identify the top firms that most effectively leverage the Web to promote and establish their variable annuity presences.

During this Variable Annuity study we learned a lot about which firms are differentiating their products and their websites. The top five firms are: AXA Distributors, SunAmerica, Lincoln Financial, John Hancock, and Pacific Life.

Top site features are diverse and include microsites, product filtering systems, automated forms, calculators, marketing materials and support, advisor sales support, application wizards, and comprehensive market commentaries. The image below shows AXA's product performance graphing function, which gives advisors the opportunity to analyze trends and compare subaccounts.

The last eighteen months have been tough on the variable annuity (VA) business. Consider:

• There are nearly 1500 unique products competing for assets
• Total VA assets declined 24% from 2007 to 2008
• Sales of variable annuities dropped 15% from 2007 to 2008, with Q1 2009 exhibiting another 27% decline year-over-year

With those challenges behind them, we anticipate that annuity providers will continue to innovate, using both their products and their websites. Investors' appetites for products that provide some downside protection or assurance of retirement income are on the rise. Consequently, annuities, and the websites that support them, will be vitally important going forward.

It Is Like 1996 All Over Again

by Lee Kowarski

On Tuesday, I spoke on a panel for the ICI's Public Communications Committee about social media. I wanted to share a few key take-aways from our discussion:

• The question isn't "Should We?" but "How?" - Back in the mid-90s, many clients asked me whether or not they should have a Web site. While that question seems laughable today, I used to tell people that every firm needed to be on the Web and that their focus should be on developing a well thought-through strategy to use the Web effectively. The same thing is true today for social media: firms shouldn't just run out and join Facebook and Twitter, but rather sit down and formulate a clear social media strategy. Every firm will not end up joining every social media site, but every firm will have a social media presence of some kind.
• Regulators are open to social media - A representative from FINRA that was on the panel shared that the organization is actively working on establishing clearer rules regarding social media through a Task Force and as part of the new Regulatory Notice 0955. Perhaps more importantly, it became clear through the discussion that most firms are under the belief that the regulators are far more restrictive when it comes to social media than they actually are, and that it is typically firms' internal departments that are holding them back.
• Have clear policies - Whether your firm jumps into the social media space head first or not, every firm should have a clear, well-communicated policy around what employees can and cannot do on various social media sites. IBM made its policy available online and may serve as a guide for firms looking to articulate their own.

Today, the focus of the buzz is on Twitter and Facebook. A few years ago it was Friendster and MySpace. Tomorrow, it may be UStream and a community that doesn't even exist yet. Regardless of the specific site(s), social media (like the Web) is here to stay. You shouldn't be asking if you need to join the fray, but rather thinking about how you can most effectively embrace social media.

Who is Really Tweeting?

by Andy Edwards

When considering the role of social networking in their online strategies, e-Business professionals shouldn't assume that all technologies attract the same users. "I just think it's weird and I don't feel like everyone needs to know what I'm doing every second of my life." This is not the comment of a hardened 50-year old business professional. 18-year old Kristen Nagy made the comment in a recent New York Times article about the demographics of those using Twitter, the social networking technology. The article goes on to quote Jeremiah Owyang, an industry analyst studying social media, who notes that "Twitter did not attract the young trendsetters at the outset. Its growth has instead come from adults who might not have used other social sites before Twitter."

The piece asserts that traditional social networking tools such as Facebook and Myspace attracted teenagers in droves at first, since their focus was on connecting with friends. Since most social interaction amongst this demographic occurs between friends, these platforms served as an ideal conduit for that discourse. Twitter, on the other hand is, "better for broadcasting ideas or questions and answers to the outside world or for marketing a product. It is also useful for marketing the person doing the tweeting, a need few teenagers are attuned to."

Such needs aren't on the top of most teenagers' to-do lists, but these goals are top priorities for sales and marketing professionals in the insurance and asset management industry. kasina's research on advisor behavior online indicates that it is not just the younger generation of advisors who use the Web as part of their investment selection process. These latest findings about Twitter underline the important point that all social networking tools are not the same. Serious thought needs to be put into whether to embrace these technologies on a case-by-case basis. Has your firm Tweeted lately?

Aligning Business Units During 2010 Planning

by Anu Heda

In the August Industry Analysis Brief, Mike McLaughlin wrote an article about "Staying the Strategic Course". One important message from that article - align goals across business units to improve ROIC.

As part of the Industry Analysis service, I lead discussions each month with subscribers. Each subscribing e-Business organization admitted to having little familiarity with Sales esand goals. If that's the case, building a Web site to support sales is going to be pretty difficult. Here are four simple, no-hard-dollar-cost actions that e-Business teams can take to rectify the issue:

1. Learn the "Sales Goals" - Are they to grow net new advisors? Is 2010 the year to focus on Raymond James? Whatever they are, learn that organization's goals.

2. Ask for an introduction to the "Sales Process" - Most firms use a multi-step, consultative approach that takes a prospective advisor from "unfamiliar with the firm" to "dropping a ticket" (or beyond). Learn the basics of that process.

3. Emphasize Online Tools that Can Aid the Sales Process - In the sales process, there will be periods during which interactivity is more advantageous than person-to-person contact. For instance, if the sales process includes "introducing thought leadership", then many advisors will prefer video, Webinars, online articles, or searchable market commentary over large binders that are sent to their offices.

4. Align some part of the e-Business goals with Sales - Suggest that the e-Business goals overlap with Sales to ensure both organizations move together. If the Sales goal is to grow and net new advisors, then drive resources towards the goal of e-Marketing and netting new Web site registrants.

This can clearly lead to increased operational efficiencies and to improved goal planning.

How Asset Managers Should Use LinkedIn

by Steven Miyao

In the August addition of our Industry Analysis, a monthly service that helps asset managers evolve their online offerings, I wrote about how asset management companies have a real opportunity to take advantage of the LinkedIn Networks that their wholesalers have built.

There are approximately 700 mutual fund wholesalers and 46,000 financial advisors on LinkedIn. Most asset managers have been ignoring this platform, despite the fact that it offers an easy opportunity to connect with these clients.

LinkedIn is different from most other social media sites (such as Facebook and Twitter) because it is exclusively a user-driven, professional networking site. The site was originally a career building site on which users could post their resumes and interact with other professionals in order to gain access to job opportunities. Over the last few years, the site has evolved to provide wholesalers and marketers with the ability to interact directly with targeted advisors.

Your wholesalers hold the key to your firm's LinkedIn success. They are the individuals within your organization who have established a network with the advisors. Therefore, advisors will want to connect with them online in the same way that they connect with them in person.

Many wholesalers and advisors employed by firms that restrict LinkedIn connect to the network on their home computers. Merrill Lynch seems to be one of the firms that restricts access at work, but 6,855 Merrill Lynch financial advisors are on LinkedIn. Asset managers can choose to ignore the trend towards active usage and restrict access, or they can embrace usage and find ways to incorporate LinkedIn into their general business practices. Some firms may not find a way to take advantage of this medium, but their competitors most certainly will.

Help your wholesalers to improve their LinkedIn profiles. When your wholesalers connect with advisors, they should represent themselves and the firm in the best light. We recommend the following six steps when updating your wholesalers' profile pages:

1. Make sure they complete 100% of their LinkedIn profiles to include:
- A current position
- Two past positions
- Educational background
- A profile summary
- A profile photo
- Their specialties
- At least three recommendations

2. Encourage them to get key recommendations from their advisors

3. Provide them with a profile picture that they can upload

4. Include your advisor Web site URL

5. Ensure that they do not block incoming e-mails

6. Show them how to create polls

LinkedIn is going to continue to gain popularity among financial advisors and wholesalers. Start the process now, keeping compliance challenges in mind. Your firm will get a leg up on the competition by helping your wholesalers take advantage of this medium.

Creating Emotional Connections With Technology

by Mike Ma

Watch this TED talk from Tom Wujec at Autodesk. It's a good use of 6 minutes of your day. He talks about the ways in which humans create emotional connections and relates them to Web and technology development.

In particular, wait for the ending at 5:35. Imagine if we had applications like his sustainability building demo. What if you could use a portfolio builder that used your image as the main character in order to show a different life that you could be leading?

We've done a lot of research that outlines the ways in which better Web sites produce better sales. However, I think we have just scratched the surface of what "better" means. Right now, we just look at the Web as a cost-effective way to distribute information and data (primarily numbers and text). Which firms focus on using the Web (or any technology) to help explain their individual stories, big ideas, and provide a context for their products? Who is employing an emotional connection in their strategic plan?

Customized Domains - Will Asset Managers Snap Up Online Vanity Plates?

by Mike McLaughlin

Since the beginning, Web sites have been built around ubiquitous extensions such as .com, .net, .org, .gov, and .edu. These suffixes have both simplified and limited the Internet. Later this year, everything will change in the realm of domain suffixes. But what will the resulting changes be for asset managers and their Web sites?

Farhad Manjoo at Slate.com (one of the five best Web sites in existence) superbly summarizes the pending changes to domain-naming conventions. The gist is that ICANN, the international non-profit that regulates online addresses, is green-lighting a domain-name free-for-all starting in late 2009. With limited legal and (ahem) moral restrictions, individuals and firms will be able to create customized domain suffixes.

Forget kasina.com. Now we can potentially snap up kasina.consulting. Asset managers can go the same route: fidelity.com becomes fidelity.investments. Suddenly the sometimes pesky period in T. Rowe Price becomes an asset, and anyone who uses a first initial and their middle name should be fired up.

However, as Manjoo points out, this flexibility in crafting domains is not really necessary. The reality is that modern browsers and search engines have greatly diminished the need for such complexity. It is no longer vital to have the perfectly crafted domain name and suffix. Internet Explorer and Google are smart enough to find kasina's site without anyone knowing whether we're kasina.consulting or kasina.com.

Although I agree with Manjoo, I think he is overlooking the phenomenon of vanity license plates. Car owners don't need these, but many drivers choose to spend money on this mode of expression. For example, a friend of mine has dreams of getting approval for a vanity plate that contains a disguised expletive.

I think the changes from ICANN will yield similar results. People and firms will not need fancy, specific domain suffixes, but some are going to snap them up anyway. Asset managers are included in this, as I see two potential applications:

1. Branding and Differentiation: Many asset managers end their names with terms like "investments" or "funds", but under ICANN's plan only one firm can own those suffixes. Is there some cachet to have a firm's Web address as firmname.funds while everyone else is firmnamefunds.com? I suspect a few firms will answer "yes".

2. Campaign Support: Pioneer recently launched a microsite to support its View the Values campaign at viewthevalues.com. With relaxed naming conventions Pioneer could instead utilize addresses such as viewthevalues.pioneer, or even view.the.values. In pure-play Web marketing initiatives, funky domain suffixes could have increased appeal.

So, back to the original question: will customized domain suffixes change much for asset managers? Probably not. But the changes that do occur will certainly be interesting.

Improving Your Distribution Strategy Based on Advisor Data = Advisor Vision

by Lee

As you may have read in Ignites this morning, kasina and Horsesmouth have partnered to launch Advisor Vision, a new service that provides executives with the information that they need to evolve their intermediary distribution strategy into one that is more profitable and sustainable.

Given the amazing amount of changes in the financial intermediary space due to the markets, broker/dealer mergers, etc., asset management firms have an increased need to understand what financial intermediaries are thinking and doing. At the same time, distribution executives are looking for guidance on how to improve the allocation of their resources in an effort to maintain profit margins, which are shrinking from an average of about 35% to 15% or less.

Recognizing these challenges, Advisor Vision taps into the Horsesmouth community of over 70,000 financial intermediaries from 300+ firms on a daily basis and provides asset management firms with detailed, actionable recommendations that are dictated by their business strategy. The frequency of the surveys and the transparency of the data are unparalleled in the market today. Along with the uncensored survey data, Advisor Vision provides clients with a level of customized analysis and recommendations that makes Advisor Vision a necessary tool for all forward-looking distribution executives.

More details are available online or e-mail me to set up some time to discuss our new offering.

Fighting the Downturn from the Top Line

by Mike McLaughlin

Amidst the ongoing cost-cutting across the asset management industry, an old Harvard Business Review article provided me with a good reminder this week.

Leading Change from the Top Line presents an interview with Schering-Plough executive Fred Hassan and his strategy for turning around flagging businesses. Mr. Hassan's approach contains good food-for-thought for asset managers.

Unlike many of his peers, and, coincidentally, current asset management executives, Mr. Hassan prioritizes top-line growth to navigate difficult business environments. In other words, in tough times he focuses on motivating and investing in salespeople to foster a business turnaround. Three primary reasons:

• Product development cycles (in Mr. Hassan's business, and in ours) are too lengthy to immediately transform results.
• At some point, there are no more costs to cut. Cost management can help for a year or two, but top-line and market share growth do more to ensure long-run success.
• Salespeople most directly impact clients' moods. As their morale goes, so goes that of clients. And damaged or lost client relationships can take 6-18 months to repair.

That last point resonates most with me. Assuming the markets eventually recover, a motivated, positive salesforce can enable a firm to take advantage of that recovery ahead of the competition.

Of course, many asset managers face additional issues within the sales ranks. Specifically:

• Firms have already shed many wholesalers.
• The wholesalers that remain in place are not the happiest campers. Any loosening of the labor market will bring a lot of turnover along with it.

So where does this leave us? For firms to position sales to help lead themselves and their customers to greener pastures, I think firms need to take honest stock of three things:

• Sales Morale: If the market recovers later this year, how much turnover will we see? How much disruption will this turnover cause to our relationships and our business?
• Compensation Structure: Does our sales compensation model do enough to protect our sales professionals in down times and the firm when business is great? Or does it ensure drastic highs and lows that undermine the stability of the team?
• Team Structure: How can we inject or augment our use of hybrid wholesalers to expand our relationships with advisors and gather assets more cost-effectively?

It is vital that firms undertake these analyses now, not after things have turned for the better. By then, it'll be too late. Proactivity on all three fronts - morale, comp, team structure - will position firms to deliver on Mr. Hassan's tried-and-true strategy of using the sales team to lead business turnaround.

Regaining Investor Confidence

by Eric

Investors' primary concerns these days are twofold: (1) is my money safe? and (2) does investing still even make sense? Asset managers and advisors used to have to prove the superiority of their products and services. Since the market meltdown and abuses of investor trust, though, the importance of stacking up versus the competition fades to a distant third after the two questions above. If asset managers are to grow and thrive post-recession, they need to face these two questions head-on.

The first of these questions is fairly straight-forward. Investors have heard enough about Madoff and Stanford to be very wary of turning over their money to just anyone. Discerning the real good guys requires some diligence. Ultimately, reputation, track record, social media, feedback loops and ratings, client loyalty scores, and redemption rates will all signal to investors who is trustworthy and who is not.

The second question for the industry is far tougher. Many investors regret having invested their savings over the last ten years (the "lost decade"). Investing in the markets, once taken for granted as a smart thing to do, has yielded poor returns for many investors. However, there are two ways for investors to react to the results, and the difference between these two viewpoints is vital for asset managers.

Some investors infer that they made a bad decision to invest at all. Others see the results as bad outcomes of good decisions, which happen from time to time. This is not just an academic distinction, because it has implications for future decision making. To hammer home the point, offer me an even-money bet based on the roll of a fair die: I win if it comes up 1, 2, 3, 4, 5; you win if it comes up 6. We roll the die, it comes up 6, and you win. Did I make a bad bet? No! I took a risk and made a rational decision that did not work out, one that I would take again as many times as you offered it.

One cannot always infer the quality of the decision merely from the nature of the outcome. Investing in the markets the last ten years did not work out too well, but that does not mean the decision to do so was poor. Inferring that they made a mistake may cause investors not to invest going forward, and this would be a mistake. Over the long haul, substantial evidence indicates that broadly diversified and regular investing in productive enterprises increases wealth. However, how one does so may change.

Some investors have learned that their risk-tolerance is not as high as they thought. For those clients, new products or services may be in order. Structured products with downside protection (e.g. principal protected notes), annuities, or portfolios including diversification beyond the standard long-only style box coverage may give some investors peace of mind and the courage to continue investing.

Asset managers and advisors recognize that investors are emotional. It is human nature to blame decision making for poor results; this minimizes the role that risk plays and leaves us feeling more in control of our destiny. But our rational mind knows that randomness plays a role in determining outcomes.

Therefore, if asset managers and advisors want to continue to thrive, they need to convince people with assets that investing still makes sense, and that investing the last ten years was a good decision with a bad outcome, not a bad decision. Only after making a strong case for their own trustworthiness and the sensibility of investing at all will asset managers and advisors be able to move on to discussing their particular products and services.

Embracing Change: If I can Twitter...

by Deb

For all of you that have received hundreds of emails from me over the years, you know that I am sold on the benefits of email and the cutting-edge technology of my Blackberry. However, as the newest member of the kasina team, probably the least tech savvy and certainly the least likely to figure out my own iPod, I have spent a lot of time getting up to speed on many new Web 2.0 technologies. I am learning a totally new vernacular including such new buzz words as: Skype, Twitter, IM, wiki, etc. "What are these tools and how could they possibly help build relationships?", I thought to myself. At first blush, it seemed counter-intuitive to me that any technology could enhance the value of human contact. How could you replace the value of the face-to-face meeting or the phone conversation?

At kasina, we are spending a lot of time focusing on the ideal balance between external, internal, hybrid, National accounts, and Web touches for an asset manager - a formula that reduces costs yet maximizes the asset gathering proficiency of your advisors. The Web, and Web 2.0 tools, are proving invaluable to asset managers - oh, and to me too. Many of these new tools, which initially seem impersonal, are exactly the opposite - they enhance your connections and lower your costs. For example: sitting on an hour-long teleconference call will challenge anyone's attention span. Attending the same call via Skype is an entirely different experience, and one that is much more productive. The attendees are engaged in the meeting and can see the always-valuable facial expressions and body language of the other attendees.

My advice for wholesalers on the road? Start out using Skype to keep in touch with your family. Then imagine how useful it could be with your customers too.

So your next "email" from me may come on Facebook, LinkedIn, or even Twitter. If I can do it, so can your wholesalers.

Targeting RIAs

by Michelle

In August of last year, just before the market collapse, we discussed the growing RIA segment in our Industry Analysis. Discovery Database research showed that between 2006 and 2008 there was a nearly 200% increase in assets under management by RIAs.

Given this growth, we wrote, the introduction of particular Web site elements can help effectively target this group online. Features such as clear platform markers, targeted share class information, dedicated RIA service centers, and sales team maps can go a long way in demonstrating dedication and creating loyalty.

Now, as everywhere, substantial revenue losses are occurring within this segment, a recent Ignites article reported that RIAs are interested in ideas of how to better manage their business.

It is now even more important than before for firms to recognize their clients' plights and provide timely and tailored materials, be it through customized RIA Web features and online offerings, or in person, through true business building support in place of irrelevant product pitches.

Irrationality and Investor Decision Making

by Corianna

Check out Dan Ariely's presentation (see this link; you have to select Ariely's name from the "video" dropdown). And no, this isn't just because he's on faculty at my alma mater.

Here's why Ariely's presentation is worth 20 minutes of your life: Ariely's work is about human decision making - the driving force behind our economy, and the current economic crisis.

In his presentation Ariely describes how people's decisions are affected by the structure that their options are presented in. For instance, in one study researchers found that, when confronted with a simple decision - delay a scheduled surgery to see if ibuprofen would solve the problem, vs. perform the scheduled surgery - doctors are likely to act "rationally," and chose to delay the surgery. However, when the decision circumstances become more complex - delay the surgery to test for the effectiveness of ibuprofen and an additional medication, versus going ahead with the scheduled surgery - doctors chose not to delay the surgery.

So, why does this matter to asset managers? The key to surviving this crisis will to understand and anticipate investor decisions, which are not always rational. It's a well accepted fact that the structures of 401k plans (for instance, automatic enrollment), have a dramatic effect on levels of participation and the quality of investment decisions made by participants. Now is the time to take these lessons further.

Americans Want to Talk About the Financial Crisis

by Corianna

People want to talk about the financial crisis. Communication is key. We've been talking about it and blogging about it for months now.

Last week, some new numbers from Pew affirmed the importance of everything we've been saying. According to Pew, Americans:

• Are beginning to hear good news: Compared to December, the number of people saying they are hearing mostly bad news has dropped from 80% to 60%; meanwhile, the number saying they are hearing a mix of good and bad almost doubled from 19% to 37%.
• Want to know what's going on, good or bad: 91% of Americans following economic news very closely report feeling better because they know what's going on; whether or not it's good news. 79% of Americans who follow less closely feel the same way.
• Feel under-informed: 40% of those following the news closely feel they don't have enough background knowledge; 54% of those following less closely share their sentiment.
• Care more when they make more: 83% of Americans with household incomes above $75,000 and 64% of those with household incomes of less than $30,000 say they need to stay abreast of economic news for financial reasons.

In today's scandal-stricken world, asset managers must not take their positions as trusted investment consultants for granted. People want information, and more of it; no huge surprise there. However, with the ever-expanding blogosphere and a plethora of news publications, the competition for investor attention is intense. Today, more than ever before, transparency, easy access, and timely publication will be paramount. Asset managers would do well to go to their audiences through syndication (e.g. disseminating content through other sources; having portfolio managers featured on news shows, etc.) and new media communications, rather than waiting for investors and advisors to come to them.

2009 e-Business Budgets Take a Hit

by Johanna

e-Business and e-Marketing teams at asset managers haven't escaped the consequences of the recent market crises.

Out of 18 asset management firms that kasina surveyed in 2009, 67% are seeing decreased budgets from 2008 to 2009. Some firms are being hit especially hard: almost 30% of surveyed groups have had to cut their budgets by over 50%.

Despite this grim picture, the good news is that most teams have maintained the number of staff dedicated to the intermediary channel, and 2 firms are actually increasing their team size in 2009.

However, e-Business leaders aren't throwing up their hands and giving in, and we can look to many new innovations online in 2009 and beyond. In fact, 25% of firms are working on site redesigns, and an additional 39% of firms are working on enhancements to site content in areas such as education and value add.

Furthermore, at many firms, marketing groups are focusing on lowering costs by decreasing the amount of print advertising. Correspondingly, e-Business leaders are focusing on providing more effective online delivery services via e-mail and other technologies, such as RSS.

Stay tuned, in the upcoming months kasina will debut a new research report on how firms can leverage the Web for cost effective distribution. In this report we'll provide guidance on how firms can maximize precious resources.

Investment Firms Are Hurting Investor Confidence

by Lee

Today, Ignites had the results of a poll that asked readers "What has hurt investor confidence most?" The top answers were "rising unemployment/weak economy" (53%) and "dismal markets/reading 401(k) statements" (34%). While those are certainly real factors contributing to diminished confidence levels, I think that the Ignites poll missed a key factor in poor investor confidence: the lack of effective, proactive messaging from product manufacturers and distributors.

As an example, look at nearly any company's investor Web site: Fidelity, John Hancock Funds, Pacific Life, Vanguard, etc... (I don't mean to pick on these firms -- I could have chosen from dozens of companies).

While all of these firms provide in-depth information for investors about the firm and its products, as well as valuable educational information and even insightful market commentary, none of them have tailored their messaging to prominently address the questions that are foremost on investors' minds -- What is going on in the markets? Is my money safe? Am I doing the right thing?

Investors are shaken and most firms are putting their heads in the sand like a scared ostrich or allowing too many simultaneous messages to dilute a key point. This is not a time to hide or to mince words -- it is a time to clearly and forcefully state why investors should trust your organization with their money. Look to firms like BlackRock, MFS, and Putnam for examples of proactive messaging aimed to restore investor confidence. Get out there and communicate your story!

Compensation for the Long Term: Not Just for PMs

by Mike McLaughlin

David Kathman over at Morningstar wrote an interesting article this week about portfolio manager (PM) compensation. In short, Kathman lauds firms who align PMs with long-term performance and shareholder benefit.

The faculty of New York University, in their Restoring Financial Stability whitepaper series, applies the same concept to compensating executives and "risk-takers" in financial services companies.

The issues raised by both Morningstar and NYU have parallels within distribution, specifically for wholesaler comp. Wholesalers clearly fit the "risk-taker" label, and yet, for most firms, their pay is largely a short-term vehicle. Consider:

1. Monthly commissions condition wholesalers to think short-term. If I had a nickel for every wholesaler I've heard mourn the haircut in his monthly commission check over the last few months, I'd fear not the financial crisis.
2. Deferred compensation plans industry-wide are generally weak. As we've written, deferred packages for externals often comprise 10-15% of total comp. This enables good wholesalers to move liberally when better near-term opportunities arise.
3. Wholesalers face no direct financial penalty for bad outcomes for the advisor and shareholder. An underperforming product takes time to reveal itself after a purchase. And the wholesaler has the market and the PM to bear the brunt of the responsibility. By the time a relationship dries up, the commission check has long-been cashed, new relationships forged, and maybe even a new job found.

The idea of going more long-term got me thinking about a client of ours. They had a unique structure for wholesaler comp: base salary and an annual bonus. Monthly commissions? Nope.

As you might guess, the sales team was not boisterous in its support for this strategy. And at first I sympathized with them. But I now think the firm was more right than wrong here.

Sure, the firm had the substantial challenge of being an outlier in an insular industry where non-standard approaches are met with great skepticism. But they were attempting to plant a longer-term mindset within the sales team. That is a strategy I can support.

So what new ideas are out there for creating better comp structures for the long-term? We are all ears to hear yours, and we'll throw out a few of our own next week.

Blogs Within Asset Management

by Anu

For over two years, kasina told clients to consider using blogs for disseminating insights, both internally and with clients. Often, we're met with keen interest and little use. Our e-Business clients cite regulatory precaution that stops the development of a blog.

Well, in recent meetings with three different firms, e-Business executives shared 2009 online initiatives. In all cases, blogs were cited as key projects. Two firms asked to remain anonymous and they are using blogs in an unprecedented manner to further integrate Sales and the Investment Team. No doubt, these sales forces will answer advisor questions faster; wholesalers will make more needs-based assessments (an important insight from kasina's most recent report); and investment teams will feel less removed from the hand-to-hand combat facing wholesalers.

At Fidelity, the new advisor portal will provide a blog - though controlled - to registered advisors. The firm plans to start with content about the firm's investment philosophy in the blog, and then move to product information and commentary. E-Business has compliance approval for the blog, and will have a compliance/legal review processes in place. Compliance/legal will review all posts before posting onto Fidelity.com.

What's your next move? How will you close the gap between the Investment teams and your sales force and end-users?

Staged Mourning and the Asset Manager Marketing Challenge of 2009

by Corianna

In her 1969 book On Death and Dying, Elizabeth Kubler-Ross identified five stages of mourning:

• Denial
• Anger
• Bargaining
• Depression
• Acceptance

A notable study, done at Yale in 2007, challenged Kubler-Ross and found the cycle to be denial, yearning, anger, and depression. It notes that acceptance--the final end state--increased throughout the mourning process.

Either way, I've recently noticed a growing number of angry, let's-take-revenge-on-Wall Street headlines. It seems like the initial shock and panic are slowly morphing into anger. As this continues, calming panicked clients will no longer be as pressing as it was four months ago. According to mourning stage theory, anger, frustration, and depression will trump shock. Advisors and asset managers should prepare to deal with consternated, blue clients. And, for asset managers, the marketing challenge in 2009 will be developing campaigns that appeal to clients at all stages of "mourning."

Twitter comes to Asset Management

by Anu

Twitter began in March of 2006. In two years (only had data up to March 2008), the service has gone onto significant success with nearly 3 million "tweets" each day.

Michelle already brought up twitter versus yammer last week.

This week, kasina joined Twitter at http://twitter.com/kasinaUS. Visit and "follow" our tweets as we share insights from consulting, research, and beyond. We look forward to fellow "tweeps" "nudging" us. If you have any questions about how to use twitter and want to start with an e-mail, send your question along.

Happy New Year

by Steven

I hope all of you had some time over the holidays to catch your breath. I caught mine in Chile, enjoying the beautiful climate and wonderful wine. But, coming back to NYC has not been easy. The financial climate has not gotten any better and the industry is still facing major obstacles. Here are my thoughts on how the current crisis is transforming our industry's distribution landscape:

Peer Pressure: Tell Advisors About Their Peers Online

by Johanna

In Steven's recent blog post "Understanding Independent Financial Advisors Can Stem Redemptions," he noted the success wholesalers have had with bringing advisors together. As he noted, this is particularly effective in the independent channel, where many advisors lack the support of a large network of their peers. It's been a common theme in kasina's research: advisors want to know what their peers are doing and thinking.

I recently came across a way one asset manager is bringing advisors together online, and spurring interest in online content at the same time. This firm sends out an e-mail every month with an overview of the ETF market, including asset growth and other information. The message also includes a link titled "See what information other investors are looking for." Clicking on the links takes users to a landing page with bar charts detailing the most downloaded factsheets and educational documents for advisors. In looking at these charts, I immediately wanted to look at the most popular items to see what advisors were so interested in. The firm makes it easy to do by hyperlinking each bar in the charts to take users to their advisor site, so they may more closely review the documents.

It's unlikely that asset management intermediary sites will become social networking hubs anytime soon, but that doesn't mean that firms can't communicate to advisors about their peers. Working with Compliance departments and taking small steps - such as telling advisors what their peers are downloading - is a powerful tool for promoting the firm and its products.

Yammer vs. Twitter

by Michelle

In our November Industry Analysis, we wrote about the increasingly popular form of microblogging, Twitter. Twitter.com is a web-based communication tool in which users can describe their current status in short posts, or "tweets," distributed by instant messages, mobile phones, e-mail or the Web. It's geared towards individuals who want to share daily experiences, thoughts, opinions, URLs, etc. with their network. Twitter asks the question "What Are You Doing?" and user responses are sent to their "followers." Privacy settings allow for all updates to remain contained to that network, but only if each user checks that setting.

A newer service, that came on to the microblogging scene just as the piece on Twitter was being published, is Yammer.com, a similar tool marketing itself to businesses as a method of facilitating intra-firm communication.

Yammer has capitalized on Twitter's model, asking "What Are You Working On?" and providing a similarly lean space for users, and now, specifically, colleagues, to keep each other informed. While individuals can register and use the site, it is a for-profit entity, providing the opportunity for or entire companies to join for $1 per user per month. This gives the firm administrative control over security and how employees use the service. A recent New York Times article, "Will Microblogging at Work Make You More Productive?," states "In the first six weeks, 60,000 users have signed on, and 4,000 of them have convinced their companies to pay." Another article, "Twitter and Yammer Test Dot-Com Business Models," discusses Twitter's plans to introduce ways to bring in revenue, one of which is to charge companies who want to use it...as an official channel to talk with their customers and monitor what they are saying."

In making the case for Twitter, we discussed how the need for improved communication and distribution of information, both internally and externally, is an ever-present challenge for many asset managers. Wholesalers are notoriously brief in their messages and microblogging, by nature, allows for nothing but brevity, providing a space of 140 characters maximum for user updates. In that way, it is already present in the space, in the form of short, rapid-fire email messages that go back and forth between various sales groups. What's more, the use of BlackBerries and other smart phones has increased dramatically in the past several years. Be it Twitter or Yammer, microblogging and its potentiality for fast, wide-spread communication is starting to make more and more sense.

Understanding Independent Financial Advisors Can Stem Redemptions

by Steven

Redemptions in mutual funds are expected to surpass $325 billion in 2008 and asset managers have started to focus their distribution strategies around the growing independent channel for salvation.

There are many reasons why it makes sense to focus on independents. One of them is lower redemptions. The average redemption rate in the independent channel has been between 10 and 15%, as compared to 20% in the wires.

But our recent focus group with independent financial advisors has shown that they are frustrated with the lack of understanding that wholesalers and marketing organizations have about their business. At the same time, interviews with some of the leading independent advisory firms have revealed that successful wholesalers understand the difference between independent and wirehouse advisors.

One of these differences is that independents typically do not have the support of an advisor network. Wholesalers that understand this have organized events where independents (often from the same firm) get together to share best practices. These events have been highly successful both for the advisors and for the wholesalers.

Two steps that firms can take to better understand the needs of independent advisors are:

• Conduct Regional Advisor Focus Groups
  These focus groups can help firms understand the varied sophistication levels and preferences of advisors.
• Capture Key Data Points
  Capture key demographic, behavioral, and attitudinal information (Service by Segmentation) such as:

1. Demographic Data
• Maturity of the practice
• Team or individual practice structure
• Number of clients
• Revenue structure
• Licenses and designations
2. Behavioral
• Accepted calls from an internal wholesaler in last four quarters
• Meetings with an external wholesaler in last four quarters
• Open and click-through rates for e-mails
• Literature requested through each communication channel (Web, e-mail, telephone)
3. Attitudinal Data
• Rating of value-added programs
• Willingness and frequency to receive calls from Internal sales
• Willingness and frequency to meet with a wholesaler
• Rating of conference and networking events
• Preference to have firm information pushed to them (via wholesaler, marketing, or Web)

Redemptions are going to continue to plague asset managers and insurance companies. Better understanding independent advisors will help your wholesalers and marketing departments have more relevant and meaningful interactions, which will ultimately help with redemptions.

The New Fidelity.com

by Michelle

On Wednesday, a few of us here at kasina got a sneak peak at the new Fidelity.com, which will roll-out in installments over the next 6 weeks. The completely redesigned site is the product of extensive research conducted by the firm, which suggested that investors are demanding more market news and analysis from asset managers.

Two years in the making, the new site still contains the information about Fidelity and the firm's products and services for retail investors, but it also seeks to function as a news portal, providing articles and video on breaking news in and out of the industry.

The site's homepage is divided into sections, including daily highlights, personal finance, investing tools and tips, a play & profit area, and more. With a long layout, requiring users to scroll down to view content, the new Fidelity.com directly resembles news sites such as CNN, Marketwatch, Yahoo finance and others. While some articles and analysis are produced in-house, the site also highlights syndicated content from 20 leading industry publications, to round out points of view offered.

In our increasingly news-centric culture, the ability to get breaking updates without leaving the Fidelity domain seems particularly timely. While this level of redesign may not be appropriate for most firms, we're excited to see these new, innovative features.

Social Networking to the Rescue

by Anu

It's a nasty, cold Saturday in Brooklyn. A friend is visiting us and needs to visit someone in Queens. She has already had a difficult trip to us from Midtown Manhattan due to "some delay" with the subway at Chambers Street. As she readies to brave the weather, my wife offers, "Anu can look on-line and see if there are any delays."

In the old world, my search focus would have been on the mta.info site.

But in today's world, my search led me to Twitter. The introduction of child 3.0 in our household further knocked off some leisurely pursuits (don't worry - the beer is carbonating and the bread mother is alive), one of which was exploring random, fun sections of the World Wide Web.

So I'm a relative newcomer to Twitter.

I found a Tweet to "follow" that sounded promising. I "followed" it (that means to get updates when a new tweet is posted) and saw that the "some delay" at Chambers was due to "smoke on the tracks." And just 7 minutes ago, someone posted that the Lexington lines were running slow due to a sick passenger. I was able to re-direct her and save somewhere between 10 and 30 minutes from her trip.

Just because I'm curious, I went back to the mta.info site to look for service advisories. Last one posted: Wednesday! Score 1 for the power of the human network.

R.I.P SearchMash

by Anu

A week ago, Google sent SearchMash, the little known, but oh-so-powerful search engine "the way of the dinosaur."

Within SearchMash results, users could answer Yes/No to whether the results were valuable. I don't know why I would answer this, but I did and pretty often.

So, what did Google learn from SearchMash? There's power in ascertaining micro-feedback (coined right here) from your users. In fact, there's so much value in it, that Google took the feature from a site NOT EVEN on Google Labs and put it right on the flagship property. As you see below, all logged-in users will see two new icons, begging the question, "did we do a good job?"

Are you asking advisors if you did a good job? If not, why not? Let us know by posting a comment.

Presentations on Why e-Business is Sales, and Sales is e-Business

by Mike Ma

I've made this point many times, but I wanted to share some recent client presentations that demonstrate clearly why now is the time for e-Business initiatives, not retraction.

Let me know if you'd like me or someone from kasina to talk you through these points.

Wirehouse and Independent Advisors Speak Out At kasina e-Business Roundtable

by Johanna

One trend both Steven and Lee have talked about a lot recently is the changing make-up of the advisor universe. Essentially, as the wirehouse channel becomes more consolidated many advisors are opting to go independent.

During the kasina Fall e-Business roundtable in New York on November 12 - 13th, we hosted a focus group of advisors, two of whom were independents and two from the wires. When asked about their decision to join that channel, the independents said:

• "I feel like I have total freedom. I feel like I can structure my whole practice and life to be what I want it to be. I went into it kicking and screaming, because I did very well in the corporate world, but now I can't picture anything else."
• "We have a level of flexibility that advisors are wirehouses don't have. We essentially own our books. Directly or indirectly, it almost feels like we have more skin in the game. At some point I can sell my practice, so our clients are extremely important because they're our clients but they also have a monetary value to us."

Keys to serving this group online? Targeted and effective e-mail campaigns and truly forward-looking commentary from portfolio managers.

In talking to the wirehouse advisors, it became clear that asset managers need to pay attention to how their groups are structured. One told a truly tragic tale that explains why many advisors don't give wholesalers the time of day:

• "A lot of wholesalers haven't figured out that there's just one person that they should be contacting on the team. It's really annoying when everyone gets the same call... I do try to let people know when they are calling the wrong person. Understanding team structures will become more and more important because there is a trend towards TEAMS, and wholesalers with an understanding of how my team works means that they will be more likely to do business with us."

Keys to serving this group? Collect and act on information about how advisors' offices are structured. If particular advisor teams include product specialists so wholesalers can better target their service and sales efforts, notes to that effect should be in the CRM system.

Twitter for Asset Management, Are You Kidding Me?

by Steven

When I first heard about Twitter - an online tool for instantly sharing short updates and following others who do the same - I wondered who would ever want to do that, and thought it would be a waste of time. But I've been testing it out for a while now, and after listening to some of the discussions at our recent e-business roundtable, I reconsidered, and realized it could be a great internal tool for wholesalers and national accounts managers.

How Does Twitter Work?

Twitter users have 140 characters to answer the question, "What are you doing?" If you join Twitter you can "follow" others who also post. You can also direct message them, but always in 140 characters or less. Twitter interactions can be viewed and updated on the Web, through desktop apps, and on mobile devices. It's a way to quickly share information without having to send mass-emails.

Twitter for Wholesalers and National Accounts Managers (NAM)

Simply speaking, Twitter is a communication tool. Wholesalers frequently talk or email each other about successes they had with an advisor or a fund that they tried to promote. Rather than sending these successes as a long sentence or comment in the header of the email - I know you guys do that - wholesalers and NAMs could use a tool like Twitter to post these successes and follow them throughout the day.

The advantages of Twitter over email are:

• Every wholesaler in the organization has access to it


• Stored in a central location


• Searchable for future reference


• Limited to 140 characters to ensure concise messaging

If you're still wondering whether asset managers would really find this useful, I would suggest testing it out. This quick and easy service could provide a leg-up for the next generation of successful and progressive wholesalers and NAMs who depend on networking and the internet to facilitate communication.

Roundtable Wrap-Up: Network the World

Editor's Note: Today we have a guest blogger, David Berkowitz, Director of Emerging Media & Client Strategy at 360i, a leading digital marketing agency.

by David Berkowitz

Last week at kasina's Fall e-Business Roundtable I facilitated a discussion about the future of e-Business and online networking tools. There were two big questions that came out of the session that I thought might be valuable to post up here on the blog.

The first was a question about communication in the B2B environment, specifically which method I would recommend firms invest to get the most bang for their buck:

First I'll go with the easiest answer: listening and buzz monitoring. It's the easiest thing to do, and it's what needs to come before everything else. Try searching Twitter for your company name, a competitor, a stock symbol, or a hot topic in your industry. Look at FriendFeed's public timeline to see what early adopters are posting all around the Web. Run searches on social media sites such as digg, YouTube, and Facebook, and on buzz monitoring and measurement sites like HiveSight, Blogpulse, and Google Insights for Search. Any and all of this can provide valuable information about your customers, competitors, and business, and then you can figure out how to take action on those findings.

As far as communication, I'd start with blogging. It takes time to do it well, and it requires a commitment, but it can also develop into a valuable communication channel. It's also a great way to give a business a more personal voice, even if written in a professional manner. With the tone, you want to write like you're talking to a client over coffee - you still will want to watch what you say and how you say it, but you're treating the listener as a human being, someone you want to engage and build a relationship with. Blogging is also a gateway into an entire community of other bloggers, so it can lead to deeper relationships on a number of levels.

The second question was whether marketing dollars will shift from off-line executions (i.e. magazine ads, direct mail) and into social networks in 2009.

I see marketing dollars will shift more from offline to online media as marketers demand better targeting and more accountability from their advertising. Social networks should have a mixed bag of success in the year ahead. On one hand, much of the flow to online in 2009 will go toward the most efficient direct marketing channels, including search engine marketing and various forms of behavioral targeting. The recession will add to the pressure to demonstrate ROI next year, so search engines will benefit even more from this. Yet social network marketing will continue to grow for a number of reasons:

• Most marketers still include it as part of an experimental budget, so there's a lot of room for growth, even among entertainment marketers and others who have flocked to it early.
• Usage of social networks continues to rise, and it's now a major driver of Internet usage. Reports now say social networks are even more popular than porn. Ad dollars need to start shifting to where the users are; they're not always searching, and advertisers need to create demand at earlier stages of the funnel.
• Ad targeting options keep improving on the major social networks (MySpace and Facebook), along with other social media sites and networks such as YouTube, BuzzLogic, Meebo, and SocialMedia.com. There are many businesses out there seeking to improve on and better demonstrate the value of social media as a marketing channel.

Never Allow A Crisis to Go to Waste

"Rule one: Never allow a crisis to go to waste" - Rahm Emanuel

By Steven

The industry has already lost $1.3 trillion in assets under management in the first three quarters of the year. Distribution teams are responding by cutting the bottom performing wholesalers. Organizations are taking this opportunity to reassess their wholesaler territory strategies, and focus on understanding the difference between overall territory potential and the actual impact of the wholesaler. Understanding this difference is fundamental to a successful wholesaling strategy.

To better assess territory and wholesaling potential, we recommend that firms:

• Acknowledge that the territory and the wholesaler are not one and the same - 50 percent or more of incoming assets within a given territory may be derived from advisors that the wholesaler has never actually engaged.


• Apply more rigor to the analysis of wholesaling opportunity - Firms can incorporate information from National Accounts and supplement it with data from outside vendors, such as Coates Analytics, IXI, and Discovery Data.

Once firms understand the underlying potential of their territories, they need to improve upon how they evaluate their wholesalers. We found that the following steps lead to success:

• Compensating for wholesaler alpha - Pay wholesalers for lower-than-average redemptions in their territories. This can be done simply by taking the average redemption rate for the firm and paying wholesalers that have fewer outflows then their peers.


• Matching the wholesaler evaluation metrics to the sales goal so that both are grounded in wholesaling potential - Separate assets derived through wholesaling contact from those acquired without wholesaling contact. Pay only on the assets that wholesalers influenced.

87 percent of Sales managers do not know the percentage of assets coming in through a given territory that results from the efforts of wholesalers. This is often the cause for underperforming Sales teams. Take advantage of this crisis by redesigning your territories, and reevaluating the way you measure and compensate your wholesalers.

Blogging - An Idea Whose Time Has Come

by Anu

A few weeks ago, Corianna and I were visiting a client via a short flight from JFK. As I take off my shoes and unload my laptop, I see this sticker (sorry for the poor quality photo - I have a hard enough time getting through security, anyway.)

If the TSA (that's the US government, people) is driving customers to use a blog, shouldn't we be able to figure out a compliant method to provide advisors a blog? Rather than going it alone, this seems like an idea that a consortium should present to FINRA. Let's discuss further on the kasina forum.

More Bang for the Buck

by Anu

At the NICSA Conference last week, I was asked to moderate a fantastic session with 4 of my favorite e-Business leaders (no, really. To prove it, 3 of the 4 ended up eating ice cream with me at 2 am that night). Our topic was Getting More Bang for the Buck (PowerPoint) - how to maintain an e-Business edge in the face of low-budgets. Of the 50+ session attendees, we had a robust Q&A.

Here are four fantastic ideas:

• Use internal groups to assess usability (try things like card sorting)


• Build requirements for future projects to reduce time-to-market when budgets are better


• Re-visit vendors to learn about new products and features


• Be even more cost-effective with e-mail campaigns by being selective

I'd love to share more, so if you're interested, feel free to comment below.

From Many Come Ten

by Anu

This month, kasina released "Top 10 Institutional Web Sites for Institutional Investors." In our first review since 2006, the data revealed significant progress. Then, many firms maintained a one or two page brochure about their institutional line of business. Now, our research revealed three key findings:

• Institutional clients and consultants expect the ability to access data on-line. EXPECT. This is no longer a nice to have, but an expectation
• Institutional web sites will play a role in winning RFPs both today and in the future
• Institutional web sites will only be successful if the relationship management is well-trained and ready to direct users there.

There is tremendous discrepancy within our Top 10 sites. The 10th place firm scored 52% of the top firms. Therefore, there is significant opportunity for other firms to jump right into the foray and place in the next ranking.

In the high-tough, high-margin institutional business, firms are creating a world-class client experience to compete and win business. Winning one additional small mandate (e-mail me for the math) results in over $1MM of revenue.

E-mail us with questions or thoughts about the institutional client experience. Or better yet, use the kasina forum to post thoughts and questions.

The Top Ten Shake-Down

by Anu

2008 marks the release kasina's 10th annual Top 10 Web Sites for Financial Intermediaries report. Just think for a second, what aspects of the web weren't in existence ten years ago:

• Google - incorporated 1998
• MySpace, Facebook - 2003, 2004
• The Blogosphere - coined 1999
• Wikipedia - 2001

At the same time, think about how long it feels like some of these integral web technologies have been around (ask a college student to try imagining the world sans Facebook). For ten years, web users have been rapidly evolving, and firms strain to keep pace. This year's study identifies and highlights those sites which set the pace for their peers, those sites which best managed to service advisors' needs while elevating expectations through continual innovation. Notably, this year saw:

• Fidelity re-design its already T10-caliber site, buffering its unparalleled granularity of data with smoothly integrated product, literature, and value-added functionalities
• DWS launch a completely overhauled, Flash-based site, establishing its site as, technologically, the industry's most advanced

A significant shake-up took place in the rankings as four of the top ten have completely re-designed in the past year and as sites continue to leverage new technologies to service advisors in more effective and efficient ways. At kasina, we're looking forward to discussing the insight gleaned from this year's report with all of our subscribers. Use our industry forum to continue the dialog.

What Makes a Good ETF Site?

by Johanna

During the research for the 2008 Top Web Sites for Financial Intermediaries report, I had the opportunity to review a number of prominent ETF provider Web sites, which got me thinking: What are the important differences between ETF and mutual fund (or other product)-focused Web sites? How does the criteria for an excellent ETF site differ from other types? A few key distinctions came to mind:

Importance of the Index: In addition to including information about the past performance and the goal of the ETF, it is also important to provide in-depth information about the underlying index. For example, Van Eck has a section within each product profile dedicated to index information. Especially with more products and varied product themes, understanding the inner workings of the underlying index becomes important for transparency and product differentiation.

Retail and Intermediary focus: Few mutual fund advisor sites have a section dedicated to "What is a Mutual Fund" or "Mutual Fund 101," even though this type of basic education is important for investors (who are an important Web audience). Furthermore, for newer products within the ETN space, the basic product education becomes paramount because many advisors really don't know what ETNs are or how to use them effectively.

Data Availability: Some mutual fund-focused firms pride themselves on the historical breadth and depth of pricing and performance information. On some sites, advisors can choose the historical time period to call up whichever combination of information data a decade or more back into the past. What about ETF sites? Given that the surge of product development didn't really get into full swing until after 2000, historical information really won't help. Instead, ETF sites do (and should) focus on presenting the data they have in interestingly visual ways. For example, ishares.com has charting tools for index error tracking.

Of course ETF Web sites cannot simply focus on the differences in products and audiences. Universal characteristics such as comprehensive site search and intuitive navigation, in addition to detailed and comprehensive content, are mandates for all product provider Web sites.

Web Writing

by Mike McLaughlin

My last blog post.

It was chock-full of links, bullets, and short paragraphs. Unfortunately, though, no bold text.

Did it attract your Lazy Eyes?

That link is the reason for this post. It's a good and interesting reminder of how people read, and therefore need to write for, the Web.

Even the comments are good, though one commenter might have me boiled in oil for writing this paragraph.

If you're not up for it, two things you should know:

• Jakob Nielsen would find me shallow right now, and
• You missed another opportunity to get Rickrolled.

Net Promoter Score for Wholesalers

By Steven

Wholesaler performance is easily measured by looking at incoming sales. The difficulty lies in determining a course of action when both performance and sales are low. How can we judge whether the problem rests in the wholesalers and their processes, or if the products themselves are impeding positive sales?

As the result of recent discussions with our clients, I have started to judge wholesaler performance using more than the obvious metric of sales performance. I have also begun asking advisors this question: How likely is it that you would recommend the wholesaler to a friend or colleague?

The responses to this single question generate a Net Promoter Score, a concept that was first introduced in a 2003 article in the Harvard Business Review. Based on their responses to this question, customers are categorized into one of three groups: Promoters, Passives, and Detractors.

Promoters are valuable assets. They drive profitable growth through repeated or increased purchases, loyalty, and referrals. Detractors, however, are liabilities. They destroy profitable growth with their complaints, reduced purchases, defection and through negative word-of-mouth.

The Net Promoter Score is calculated as follows:

% of Promoters - % of Detractors = Net Promoter Score (NPS)

In this volatile market environment, the Net Promoter Score can effectively measure and motive wholesaler performance.

Taking a Chance on the Web

by Anu

In our study, "Your Site Can Sell, Too," kasina surveyed advisors across channel and demographic data. Across channels, 15% of advisors said they preferred to use electronic communication in lieu of Wholesaler interaction. Did you hear that? Some advisors do not want your Wholesaler to visit! They are asking you to save your money and frustration.

But are firms listening? In subsequent conversations, few firms are considering wholesale (yes, pun intended) changes to the service model for 2009. A simple idea: test your online power. Gather all the advisors that you did business with in 2008. Then find out which ones used the Web 'often' (I'll leave that for a later debate) and were visited by a Wholesaler. Select a group of one hundred advisors from this list. Don't select the advisors most desired by Wholesalers. Don't select advisors that are prime candidates for your revolutionary focus firm strategy. But do select a hundred advisors and, in 2009, don't visit them.

That's right. Don't send a Wholesaler to visit them. Continue building great online tools and providing commentary. Please send them valuable, timely e-mails (oh, and very few of them, if you will). In July, review the production for those hundred advisors. If the production was significantly lower than the other population, premium coffee is on me. If not, I'm expecting you to pick up that cup.

I'm already looking forward to that Iced Yirgacheffe.

IT Credibility

by Johanna

When it comes to the expertise needed on e-business teams, skills that come to mind immediately include:

• Understanding of the business
• Liaison with sales
• Writing for the web

Absent from this list is IT expertise. e-Business teams today do a balancing act between Marketing and IT, and many are closer to marketing than they are to IT. Some could even be called Web marketers, not technical Web developers. The implementation aspects often fall to IT, and e-business focuses on having a good relationship with IT.

What does it mean to have a good relationship with IT? kasina has spent the past few months envisioning, developing, and implementing a Web forum where our clients post questions and engage in a dialogue with each other, and with us. As an observer of the building process for the forum, I gained a new perspective on the development process needed for the Web.

Within kasina we have computer science degrees, IT backgrounds, and on-the-job experience in dealing with the nitty gritty of technical Web site development. Personally, I have a background in finance and economics, and on-the-job experience in strategic planning research and consulting, which means I have little credibility with IT and Web developers when discussing time and effort. For example, when our outsourced IT partner quoted 3 days to enhance the forum, it was extremely valuable to have a colleague who knew that the changes should only take 1 day (actually, it should've taken 20 minutes). "A good relationship" with IT, coupled with a more in-depth knowledge of the technical aspects of the Web, meant that he could call them back and demand a faster turnaround.

While e-business still needs to answer to the business units and senior executives, and should avoid doing technical implementation better left to IT, having expertise on e-biz teams at both a strategic level and a technical level would allow the group to better succeed in the balancing act.

Wholesaling Darwinism

by Mike Mc

The lead story in Ignites from Monday, Wholesalers Face Scary Scenario as Advisor Ranks Fall (subscription), paints a grim, challenge-laden picture for today's sales organizations. The advisor population is shrinking; the average wholesaler lacks experience; the sky is falling.

It seems that rarely a day passes now where one wholesaling apocalypse or another isn't upon us. We sometimes dabble in it ourselves.

But lost amidst the constant rhetoric -- if I never read another article about product pushing externals, it'll be too soon -- is the fact that wholesaling is entrenched as part of distribution. It's here to stay.

What's more important (and more interesting) is how wholesaling is evolving. One such evolution, hybrid wholesaling, continues to be a dominant topic with our clients.

Like a fund reaching its 3-year anniversary, hybrid implementations industry-wide are finally establishing an identifiable track record. So, are hybrids here to stay, too?

We'll be releasing a full report on this later in the month, but early returns indicate that the answer is a resounding 'yes'. Based on our analysis, here are three key reasons why:

• Profits: for the vast majority of firms, hybrids have enhanced the profitability of their sales efforts, in some cases by more than 5%. In our research, no firms have indicated a decline in financial efficiency.
• Reach: where hybrids are placed and who they target varies dramatically across firms, but they are almost always focused on unexploited pockets of advisors (by channel, by geography, by behavior). With 300,000 advisors out there, wholesaling has elements of a numbers game, making it increasingly critical to find those shadowy corners of the advisor universe.
• Lifestyle: as hybrid positions have become established, they have become an important alternative for individuals who want middle ground when it comes to travel, and for firms who want to offer careers to salespeople that do not require endless time on the road. With field time ranging anywhere from 20% up to 70%, a hybrid role can provide a range of lifestyle options.

Given costs that are roughly 1/3 as much as a traditional external, hybrids will continue to play a key role in wholesaling evolution.

The landscape is changing, but the sky is staying right where it is.

Redemptions a Problem? Internals, the Cure

by Mike Ma

"We are beating benchmark by 1300 bps and we are suffering net outflows!"
"How do we stem redemptions from products that have good performance?"

This first statement was said by a good friend of mine I am vacationing with who happens to be a portfolio analyst of a high-profile asset management firm. The second question was also brought up in a call today with the head of marketing from one of the top 10 asset managers in the industry (I am on a working vacation ... lovely!) -- Two similar questions in 12 hours, so I figured a post was in order. My answer to both --

The internals.

Get the internals out there more, but do it with more intelligence. Two quick tips and thoughts, in order of preference and effectiveness:

1. If you own their own transfer agent ... - One of our clients has used the internal desk to call an advisor when a redemption order came through. You have T+3 before settlement and I'd bet you will be surprised at how many advisors you can talk off the ledge.
2. Or else ... use the Web reports - If you know which products are on your watch list make sure traffic reports or downloads of information about those products are promptly and delicately followed up on with by your internal desk on a daily basis. I'd like to reiterate the word *delicately.* You don't want your internals to come off as big brotheresque; rather, have these advisors be put into a regular call pattern with regular leading questions.

This is a situation best handled by people who can readily get to wherever they are needed. Who better than the internal wholesaler?

We just have to give them better tools.

Investing in $ocial Networks

by Corianna

Cake Financial and SmartyPig are two social networking sites that have recently caught the attention of the press. The former is something along the lines of a huge online investment club allowing investors to track their portfolios, and the real time performance information of acquaintances and strangers alike. The latter lets individuals set savings goals and distribution plans and share them with friends, family, and loved ones.

On June 19th Cake Financial boasted the listing of over 5,000 new portfolios, and within two months of launching, SmartyPig had users in all 50 states. The success of these two sites suggests the turning of a new page in the story of online interaction. In particular, these sites:

• Excite competition between participants
• Allow people to learn from the experience of others
• Depend on people openly sharing financial information

The first two bullet points suggest that incorporating social networking capabilities into advisor sites might increase sales.

The third bullet point indicates that users are feeling more and more secure interacting and sharing personal information online. As users' comfort levels continue to increase, so will the demand for extensive online capabilities -- ranging from self-servicing tools, to ways to interact with others.