Changes in media usage among European institutional investors

English-language publications are read less by institutional investors in continental Europe

Key points:

  • The readership of English-language publications by institutional investors in continental Europe has declined since 2015, especially in France, research by Fundamental Media has found
  • The use of professional social media platforms among institutional investors is quite high, especially in France and the Netherlands
  • While the general trend of the decrease in print readership continues, the most-read specialist pension and institutional investor titles are still popular in print format in most markets

The readership of English-language publications by institutional investors in continental Europe has declined since 2015, especially in France, research by Fundamental Media has found. An exception is the Netherlands where online readership of English-language financial newspapers and websites has increased by almost 10%.

This decline may not necessarily be linked to the language, but to the fact that they are international titles. Because they need to focus on such a broad region with many different markets, they do not cover any market in the required depth.

Over the last two decades, a national trade media landscape has developed to cater for the audiences in their language about the topics that matter to them. The decline since 2015 is probably more pronounced in France, as it was one of the last markets where a dedicated local institutional platform emerged. On the other hand, the readership in the Netherlands has probably increased because their pension fund system is the most closely aligned to the Anglo-Saxon system.

Specialist pension and institutional investor publications dominate the top five most-read publications (excluding social media) in all surveyed markets except in France, where financial newspapers take the lead. There is a clear move towards online readership on desktop and mobile devices across all markets, especially for daily newspapers and general business titles.

The use of professional social media platforms among institutional investors is quite high, especially in France and the Netherlands. Even though institutional investors are always seen as rational people, only driven by data, this is untrue. They are people who engage as much on social media as the rest of the world. 

Between September 2019 and March 2020, Fundamental Research surveyed institutional investors in the Netherlands, the UK, Switzerland, the US, Germany and France about their views on global trends, asset manager communication, manager selection, their media consumption habits, and their top asset manager brands.

Trade publications still popular in print format

While the general trend of the decrease in print readership continues, the most-read specialist pension and institutional investor titles are still popular in print format in most markets. Unable to compete on the news front, good trade media provide analysis of news and what it means for the industry, which are often long reads and print is perfectly suited for this information with a longer shelf life.

Apart from these commonalities across Europe, the research also found some distinct characteristics of institutional investors’ media usage in each individual country.

In the UK, the overall increase in online media usage could be attributed mainly to mobile and tablet for daily newspapers and trade publications. We also saw a particularly noticeable decrease in print among specialist pension publications.

Unlike the other countries surveyed, there is a slight increase in print readership of trade publications among German institutional investors. Among the top five leading media in Germany, four are in print format and one is a TV news channel. German institutional investors read less media on their desktop, with the exception of the main specialist publications, but mobile readership has increased for both daily newspapers and trade publications. Professional social media usage in Germany is lower than in the other countries surveyed.

France has seen an overall increase in online readership for daily newspapers and trade publications by institutional investors, but an overall decline in the use of English-language media channels. A decline in the use of TV and radio is offset by an increase in investors accessing broadcasts via their phone. France also has the highest use of social media among institutional investors in Europe.

In the Netherlands, print readership has mainly decreased except for a few subscription-based trade publications. A decrease in readership of the country’s leading financial newspaper was offset by an increase in mobile readership. The use of social media for professional purposes is high on both desktop and mobile.

Print publications are still popular among Swiss institutional investors, although there is clear trend towards less print and more mobile. There has been a slight decrease in readership of English-language publications. Although slightly higher than in Germany, the social media usage of Swiss institutional investors is still lower than in other European countries.

Higher engagement for social media posts on asset allocation and ESG in Q2

Fundamental Research analysed over 5,200 organic posts by top leading asset managers to see how the discussed topics, sentiment and performance of posts have shifted between Q1 and Q2

Key points:

  • Most asset managers received the highest level of engagement per post on LinkedIn, while engagement on Twitter and Facebook was much lower 
  • The engagement and frequency of posts decreased in Q2 compared to Q1 but posts in Q2 used a more positive language
  • While ESG remains one of the most engaging topics, posts related to asset allocation became the most engaging in Q2, while followers lost interest in posts on the pandemic and coronavirus 

Asset managers’ organic social media posts on asset allocation and ESG received a higher engagement in Q2 2020 compared to Q1 of this yearwhile engagement with posts related to Covid-19 decreased, according to research by Fundamental Media 

Fundamental Research analysed the social media posts of ten leading asset managers during the first six months of 2020 – over 5,200 posts in total – looking at the topics discussed as well as the sentiment and performance of the posts. 

Although asset managers received the highest level of engagement per post (calculated as the average number of reactions per post) on LinkedIn during both quarters, it decreased from Q1 to Q2 for all platforms, losing 18% on LinkedIn and Twitter, and 21% on Facebook.  

On the other hand, the sentiment of the posts (calculated as the difference between positive and negative words in each post) slightly improved in Q2. After a slight decrease in posts’ engagement in February, March and April were the months with the highest engagement during the pandemic across the three social media platformsAfter this peak, May saw the lowest levels of engagement since the beginning of the year.  

Social media engaging topics Q2
The size of the bubbles represents the number of posts on that topic. The sentiment analysis evaluates opinions, sentiments and emotions of the post itself, not the reactions to the post. Posts are classified as positive (1 or above) or negative (-1 or below) as a result of the difference between the number of positive vs negative words in each post.

The ten asset managers published more than 1,600 LinkedIn posts during the first half of the year. The graph above shows the 15 most engaging topics of the second quarter, their frequency and overall sentiment. Portfolio allocation, ESG, regular communication (e.g. monthly investment updates), crisis and Europe were the most engaging topics during Q2. On the other hand, the topics most often discussed were expert views, pandemic, economy, ESG and market. There were no noticeable changes in the average sentiment of the topics when comparing Q2 to Q1 of 2020, except an interesting increase in the sentiment of pandemic, which was 80% more positive than in the previous quarter, and ESG, for which sentiment increased by 108%. 

When taking a closer look at changes in engagement and frequency of posts from Q1 to Q2, the chart above shows that there has been slight shift in engagement and the frequency of posts regarding specific topics but that it has not changed much overall. However, a few topics stand outIt seems that in the past quarter, followers lost interest in posts on the pandemic specifically, but instead wanted to know more about how to deal with the volatility the crisis has caused and what this means for portfolio allocation. The engagement for posts related to the pandemic and fixed income in Q2 more than halved compared to Q1 despite being more present in Q2 posts. Meanwhile, posts on portfolio allocation, risk, volatility and equities received higher levels of engagement compared to Q1.  

Engagement with ESG-related topics remains stable, but within the ESG theme a shift in engagement from sustainability related issues to social issues can be observed. Several social issues were discussed during these six months, for example LGBT rights and Black Lives Matter. Sustainability related posts focusing on products, climate and environment lost 40% of average engagement per post in Q2. Conversely, the engagement for posts on social issues more than doubled in the second quarter. 

As the decreased frequency and increased engagement of some topics may suggest, it seems that, overall, the leading asset managers in Europe have not exploited enough the demand for updates and insights regarding topics such as risk, Europe and financial institutions. 

These shifts in topics’ engagement, frequency and sentiment could be attributed to the increased knowledge and familiarity regarding the Covid pandemic, where the role played by asset managers social media was to provide updates, analysis and insights regarding the impact of the pandemic on the investment market and asset allocationWhile the outlook is still uncertain, it has improved since the previous quarter. 

LinkedIn data shows how the behaviour of leading asset managers and followers is adjusting to the post-COVID phase of uncertainty. More clarity around the nature and the spread of the pandemic has shifted the interest towards the financial consequenceof the current situation. From fixed income to equities, followers are looking for insights in portfolio allocation and risks in order to better cope with the current volatility and market uncertainty. 

So while asset managers missed an opportunity to post more on topics their followers were interested in during Q2, these findings also demonstrate the importance of keeping an eye on the engagement social media posts are receiving in relation to the topic and, if asset managers see interest waning in a specific topic, to research and think about the topics that are still of interest to their audience. 

Media trends among European institutional investors still show significant differences between countries

An asset manager’s reputation is a more important factor in the first stage of the manager selection process

Key findings:

  • Organisations with a smaller AUM base are more inclined to put a higher value on a company’s reputation during the manager selection process
  • LinkedIn is by far the social media platform that is most widely used across all markets and all segments. In Germany, local-language professional media site Xing is also used regularly for professional purposes
  • Almost three quarters of respondents would consider reading sponsored editorial contenteven though they are aware of the potential bias, with German institutional investors being the most responsive to this

European institutional investors consider an asset manager’s reputation to be a more important selection factor when discarding unsuitable managers than when picking the winner from the short list, research by Fundamental Media has found. Organisations with a smaller AUM are also more inclined to put a higher value on a company’s reputation during the manager selection process.

The reputation of the asset management firm is also slightly more important to financial institutions and consultants in the first stage of manager selection (discarding unsuitable managers), while in the stage 2 (picking the winning manager) pension funds and non-profit organisations find this factor more important than financial institutions and consultants.

A manager’s ESG approach is a key differentiating factor in both stages, especially for Dutch respondents in stage 2 and for financial institutions and consultants. The size of the company is an important selection factor in stage 1 for French and Swiss institutional investors.

Performance/track record, strategy/investment process, investment team and fees are always the top selection criteria in both stages, regardless of the market or the segment analysed.

A green arrow indicates the factor has become more important in stage 2 compared to stage 1, whereas a red arrow indicates the factor is more important in stage 1

Between September 2019 and March 2020, Fundamental Research surveyed institutional investors in the Netherlands, the UK, Switzerland, the US, Germany and France about their views on global trends, asset manager communication, manager selection, their media consumption habits, and their top asset manager brands.

Social media usage

LinkedIn is by far the social media platform that is most widely used across all markets and all segments. In Germany, local-language professional media site Xing is also used regularly for professional purposes.

Overall, financial institutions and consultants as well as respondents managing a large AUM (over £/€ 10 billion) are more present on social media than pensions and non-profit organisations and respondents managing a small or medium AUM (up to £/€10 billion).

European institutional investors use social media primarily as an information and networking tool. Almost half of French, German and Dutch respondents use social media to read content from asset managers.

Other findings from the European Institutional Investor Research include:

  • Asset managers are overall considered to be the most reliable information source, but there are notable differences between markets and segments. British respondents and pension institutions and non-profit organisations tend to rely heavily on consultants and consultant ratings while French institutional investors have the highest reliance on financial media. 
  • Almost three quarters of respondents would consider reading sponsored editorial content even though they are aware of the potential bias, with German institutional investors being the most responsive to this.  
  • Among the prompted global trends, longevity and climate change are overall considered to be the most important by the respondents. The importance of these trends is reflected in the investment strategies as ESG/sustainable investing and liability-driven investing have the strongest growth potential. 
  • When it comes to fund ratings, institutional investors either do not use them or tend to use Morningstar. The use of fund ratings tends to be driven by French and German respondents while their British counterparts use them the least. Financial institutions and consultants tend to use fund ratings three times more than pension institutions and non-profit organisations. 

The most important brand values for Australian fund buyers

Australian financial intermediaries prefer managers who they perceive as personable with a qualitative approach

Key findings:

  • Financial intermediaries in Australia are more likely to purchase a fund from a manager they perceive as being personable and having a qualitative approach rather than a manager who is perceived as corporate and with a quantitative approach
  • Australian fund buyers also have a preference for managers perceived as using a tried and tested method and careful thinking/planning rather than companies perceived as being curious or imaginative and energetic/fast-paced
  • Perceived quality is not only the main indicator of financial intermediaries’ propensity to buy; it also stood out in our ranking of the leading asset management brands

Australian financial intermediaries are more likely to purchase a fund from a manager they perceive as being personable and having a qualitative approach rather than a manager who is perceived as corporate and with a quantitative approach, according to research by Fundamental IQ, the research arm of Fundamental Media.

For the Global Brand Survey report, we surveyed retail and wholesale financial intermediaries in the UK, Germany, Italy, France, Spain, the US, Switzerland and Australia. To understand their perception of asset managers’ brands, we have developed a ‘brand equity index’ using a combination of quantitative and qualitative methods along five pillars: brand recall, familiarity, perceived quality, propensity to buy and distinctiveness.

The ‘propensity to buy’ score assesses the likelihood to increase the use of funds provided by that particular asset manager. When correlating this score with those from the other four brand factors, we see that Australian financial intermediaries’ view on asset managers’ ability to generate returns is the main consideration when buying a fund, as ‘perceived quality’ has the strongest correlation to ‘propensity to buy’. This is in line with the findings in the other markets surveyed.

However, unlike the other countries, ‘distinctiveness’ also plays a significant role for Australian fund managers when selecting a fund.

The ‘distinctiveness’ score encompasses fourteen prompted brand values and qualitative comments for each asset manager. But a high ‘distinctiveness’ score might not necessarily translate in a positive perception of the brand – hence the lower impact on ‘propensity to buy’ compared to other brand factors.

In Australia, companies perceived as more personable or as having a more targeted approach showed a higher ‘propensity to buy’ compared to companies perceived as more corporate or as having a broader approach. Australian financial intermediaries also have a preference for managers perceived as using a tried and tested method and careful thinking/planning rather than companies perceived as being curious or imaginative and energetic/fast-paced.

Respondents were asked to choose from opposing values, which were asked in pairs and as opposites (e.g. broad vs targeted; quantitative vs qualitative). A positive correlation with one value is therefore automatically a negative correlation with the opposite value.

Compared to the other markets surveyed, Australian fund buyers only showed a slight preference for some of the brand values, as the table below shows. French financial intermediaries, for example, have a very strong preference for managers perceived as qualitative and a partner rather than those perceived as quantitative and a supplier.

Getting across the message of quality

Perceived quality is not only the main indicator of financial intermediaries’ propensity to buy; it also stood out in our ranking of the leading asset management brands. The top ranked manager in each market, including Australia, was also ranked highest on perceived quality, except in Spain where Bestinver received the highest ranking on perceived quality but ranked second on brand overall.

It is therefore imperative for managers to get across the message of quality by designing clear propositions and communications. Hence, capturing the distinctiveness of strategies, asset classes and the overall added value of an asset manager should be centre stage.

Media consumption trends among financial intermediaries – Singapore

Singaporean investment professionals mainly use mobile devices to access social media

Key findings:

  • Social media are widely used for professional purposes among financial intermediaries in Singapore and are predominantly accessed via mobile devices. They are mainly used to read industry news or content from asset managers
  • Around 40% of investment professionals need asset managers’ support with their client communications
  • One out of four respondents have been prompted to research a new fund after having read sponsored content online

Social media are widely used for professional purposes among financial intermediaries in Singapore and are predominantly accessed via mobile devices, a survey by Fundamental Research found. This is in sharp contrast with Europe and North America, where social media are mainly accessed via a mix of mobile and desktop devices.

Social media are mainly used to read industry news or content from asset managers. As most respondents access them via mobile devices only, asset managers communicating with this audience via social media should ensure their content is mobile friendly to increase user engagement.

Investment professionals in Singapore access most publications via both desktop and mobile devices. The reach of print media is lower, but like in Hong Kong, the leading financial newspapers are mainly read in print format. TV channels also have a wide reach among this audience.

In 2019, Fundamental Research surveyed wholesale and retail intermediaries in Hong Kong, Taiwan and Singapore about their views on fund selection, asset manager communication and their media consumption habits. Fundamental Research has conducted similar research in Europe and the Unites States of America.

Asset manager communication

Singaporean financial intermediaries would like to receive more communication support from asset managers in the area of market analysis, asset allocation, and updates on current investments. Around 40% of investment professionals also need asset managers’ support with their client communications. They prefer asset managers’ communication to be concise, clear, timely and straight to the point. A more transparent and unbiased communication would also be greatly appreciated.

Fund selection criteria Singapore

More than half of respondents have been prompted to research a new fund following recommendations from peers/colleagues or receiving emails from asset managers, while one in four did so after having read sponsored content online.

When selecting a new fund, Singaporean investment professionals consider the investment philosophy and qualitative fund ratings to be the most important selection factors. Most selection criteria are pretty much equally important for financial intermediaries and end investors, except for an asset manager’s brand strength, which is the second most important criterion for end investors but the least important for financial intermediaries.

Other findings from the Singaporean Financial Intermediary Research include:

  • Fund ratings are used by 89% of investment intermediaries in Singapore, predominantly to compare data between different asset managers. However, fund ratings are far from a decisive fund selection factor but are rather used as part of an initial screening or secondary investment factor.
  • Responsible investing is still in its early days in Singapore. Respondents indicated that the main reasons for not using ESG criteria include a lack of familiarity and a lack of suitable product offering.
  • More than half of investment professionals in Singapore don’t use ETFs and those who do mainly use them for niche asset classes. Compared to Europe and North America, ETFs are still a relatively underdeveloped business in Asia, but have a huge growth potential. As Singaporean investors don’t seem to fully understand these products, ETF providers wanting to increase their market share in Asia should aim to educate them about the benefits of ETFs and how they work.

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The factors that make social media posts more engaging

Fundamental Research analysed over 9,000 posts by asset managers looking at topics discussed as well as the sentiment and performance of the posts

Key points:

  • Fundamental Research analysed over 9,000 social media posts of 20 leading asset managers, looking at the topics discussed as well as the sentiment and performance of the posts
  • Most asset managers received the highest level of engagement on LinkedIn, while engagement on Twitter was much lower
  • Overall, the most engaging posts were the ones that share insights from a reputable source, as well as posts that share more individual stories as opposed to taking a more generic approach to topics such as diversity and International Women’s Day

Asset managers’ social media posts that share insights from a reliable individual in their company receive higher levels of engagement than posts with only a link, according to Fundamental Research.

We analysed the social media posts of 20 leading asset managers during the first five months of 2020 – over 9,000 posts in total – looking at the topics discussed as well as the sentiment and performance of the posts.

Most asset managers received the highest level of engagement on LinkedIn, while engagement on Twitter was much lower. For the ten asset managers who were active on Facebook, half of them saw engagement levels that were higher or in line with their LinkedIn engagement levels; for the other half the engagement with their Facebook posts was dwarfed by their LinkedIn engagement levels.

The asset managers published more than 1,500 LinkedIn posts during the first quarter of the year. The most frequent topics were related to ‘market’, ‘ESG’, ‘coronavirus’, ‘economy’ and ‘crisis’, as shown in the graph below.

The size of the bubbles represents the number of posts related to each topic. The sentiment analysis evaluates opinions, sentiments and emotions of the post itself, not the sentiment of the reactions to the post. Posts are classified as positive (1 or above) or negative (-1 or below) as a result of the difference between the number of positive vs negative words in each post.

Overall, the most engaging posts were the ones that share insights from a reputable source, as well as posts that share more individual stories as opposed to taking a more generic approach to topics such as diversity and International Women’s Day.

As an example, for posts with the keywords ‘Coronavirus’, ‘Covid-19’ or ‘pandemic’, the most engaging posts had some degree of explanation from a reliable or renowned employee, such as the asset manager’s senior economist or investment director. In contrast, the least engaging posts were mostly followed by a link instead of a personal insight by a senior individual at the firm. Furthermore, 45% of the least engaging posts were reposts, compared to only 8% of the most engaging posts.

Within the theme of ESG, we are seeing that more individual stories receive higher levels of engagement than posts of a more generic nature. February and March saw a high amount of posts about LGBTQ rights and International Women’s Day. Asset managers’ posts with inspiring, personal stories of influential women in their company received high levels of engagement, compared to posts where women were mentioned in a broader context or in relation to their wealth and investments.

Similar to the posts related to the Coronacrisis, the best performing posts on the environment and sustainability are linked to insights or data presented by a reputable source. Reposts performed worse than original posts; 50% of the least engaging posts on ESG were reposts, compared to only 2% of the most engaging posts.

During these unprecedented times, people are looking for guidance and knowledge on what is happening, so it is vital for asset managers to share their insights and give expert advice. Original social media posts that include commentary from a reliable source within their company or inspiring, personal stories of employees will therefore see the highest levels of engagement.

Media consumption trends among financial intermediaries – Taiwan

Taiwan

Social media and business TV channels are popular in Taiwan, but print publications have a good reach as well

Key points:

  • Taiwanese financial intermediaries favour direct messaging applications (e.g LINE and WeChat) over traditional professional social media such as LinkedIn
  • Brand strength is by far the most important fund selection factor, overshadowing all other criteria
  • More than 55% of financial intermediaries have been prompted by online editorial pieces to conduct research on a new fund

The use of social media and TV channels is high among financial intermediaries in Taiwan, but print newspapers are still popular as well, according to a survey by Fundamental Research.

Taiwanese investment professionals favour direct messaging applications such as LINE and WeChat over traditional professional social media like LinkedIn. They mainly use social media in a professional manner to read content from asset managers, but three out of four also use social media to contact clients.

In 2019, Fundamental Research surveyed wholesale and retail intermediaries in Hong Kong, Taiwan and Singapore about their views on fund selection, asset manager communication and their media consumption habits. Fundamental Research has conducted similar research in Europe and the Unites States of America.

The most important fund selection criteria

Brand strength is by far the most important fund selection factor for Taiwanese financial intermediaries, overshadowing all other criteria. A good second is volatility/risk. As the Taiwanese regulations are fostering the master trust distribution model for offshore funds, foreign asset managers don’t have to incur huge costs to set up their office on the island and can thus often afford expensive marketing campaigns to attract new assets – hence the importance of brand strength.

Selection criteria Taiwan

On the other hand, cost and transparency are ranking surprisingly low, which is in sharp contrast with most other countries surveyed, where those factors are usually in the top five of fund selection criteria. However, for end investors cost is almost three times as important as a selection criterion than it is for financial intermediaries, while brand strength is almost twice as important for financial intermediaries.

More than 55% of financial intermediaries have been prompted by online editorial pieces to conduct research on a new fund. Furthermore, 30% of respondents researched a new fund after having seen the fund advertised online. Peers/colleagues are ranking at the very bottom in Taiwan while it is ranking at the very top in Singapore, suggesting different approaches towards fund research in both Asian countries.

Other findings from the Taiwanese Financial Intermediary Research include:

  • When it comes to communication with asset managers, about one third of respondents are happy with the current communication they receive. However, communication support regarding investment-related topics such as market analysis/outlook and updates from fund managers regarding existing investments would be greatly appreciated.
  • Global bonds is the asset class with the highest growth potential in the Taiwanese market, likely due to the recent deregulation of Formosa bonds – i.e. bonds issued in Taiwan but denominated under a foreign currency – as well as the boom of fixed income ETFs.
  • With 68% of respondents applying ESG criteria, responsible investing proves to be more popular in Taiwan than in other Asian countries surveyed such as Singapore. ESG is also an important fund selection criterion for almost one in four respondents.

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Media consumption trends among financial intermediaries – Hong Kong

Intermediaries in Hong Kong are increasingly reading financial publications on mobile devices

Key points:

  • Social media are exclusively accessed via mobile devices in Hong Kong. Print is still widely used especially for leading local newspapers. Print and desktop readership are declining in general.
  • Around two-thirds of respondents have been influenced by an industry event to conduct research into a new fund, while for one third, online editorial pieces have been an important factor
  • About a third of respondents in Hong Kong said they are happy with the current communications they receive from asset managers

Social media are exclusively accessed via mobile devices in Hong Kong, while the readership of financial publications via desktop is also sharply decreasing in favour of mobile, according to research by Fundamental Media.

Print and desktop readership are declining in general, although print is still widely used especially for leading local newspapers. Business TV channels are also very popular in Hong Kong.

In 2019, Fundamental Research surveyed wholesale and retail intermediaries in Hong Kong, Taiwan and Singapore about their views on fund selection, asset manager communication and their media consumption habits.

Around two-thirds of respondents have been influenced by an industry event to conduct research into a new fund, while for one third, online editorial pieces have been an important factor. Advertising – both online and in print – is also an influential factor for 11% of respondents. Financial intermediaries in Asian countries tend to be more responsive to marketing factors than their counterparts in Western countries.

Asset manager communication

Similar to Singapore and Taiwan, financial intermediaries in Hong Kong are mainly looking for communications from asset managers on investment-related topics such as market analysis and updates to their current investments.

About a third of respondents in Hong Kong said they are happy with the current communications they receive from asset managers. This result might be partially explained by cultural reasons, i.e. a reluctancy to address direct complaints.

Other findings from the Hong Kong Financial Intermediary Research include:

  • Investment philosophy is by far the most important fund selection factor in Hong Kong. Brand strength is also a decisive fund selection factor for almost one in three respondents. This factor tends to be more important in Asian countries than in other parts of the world surveyed by Fundamenal Research.
  • While cost is the top fund selection factor for end investors, brand strength and comments/insights from fund managers are more important for financial intermediaries.
  • Almost half of financial intermediaries are currently using ESG criteria, while one in five is likely to start incorporating ESG criteria soon.
  • All respondents indicated having CPD requirements, but this doesn’t translate into a high need for support from asset managers in this area. This might be explained by the high company support respondents receive when it comes to providing training or recording training details.

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How best to communicate to institutional investors – France

Asset managers are considered the most reliable source of information by French institutional investors

Key points:

  • Asset managers are considered the most reliable source of information and this sentiment has significantly increased since 2015
  • Events are the preferred channel of communication, followed by blogs and newsletters
  • Sustainable investing is the investment trend that is most likely to grow, with 83% of respondents planning to increase their ESG investments

French institutional investors consider asset managers the most reliable source of information and this sentiment has significantly increased since 2015, according to a survey by Fundamental Research.

Respondents indicated that they would like asset managers to be more transparent and honest in their communication, and they would also prefer more timely, clearer and more efficient communication. In comparison with other countries, institutional investors in France are the most vocal about asset managers’ sales approach. Institutional investors in France have expressed that they feel overwhelmed by an overload of inadequate information from pushy salespeople. Instead they would only want to be contacted directly with information specifically targeted to their needs. The latter is in line with the feedback from institutional investors across the other researched countries.

Events can also be a good way of engaging with French institutions – especially on specific topics such as ESG – as more than half of respondents attend asset manager events. Furthermore, events are the preferred channel of communication for the majority of respondents, followed by blogs and newsletters.

Similar to all other European countries surveyed, sustainable investing is the investment trend that is most likely to grow, with 83% of respondents planning to increase their ESG investments over the next year. Overall, climate change is also the most important trend affecting French institutional investors’ investment strategy. It is therefore not surprising that ESG is an attribute associated with the asset managers that respondents are planning to increase their exposure to as well as the ones who are perceived to have standout communication.

top investment trends France

Manager selection criteria

Between September 2019 and March 2020, Fundamental Research surveyed institutional investors in the Netherlands, the UK, Switzerland, the US, Germany and France about their views on global trends, asset manager communication, manager selection, their media consumption habits, and their top asset manager brands.

For French institutional investors, performance/track record, investment team and strategy/investment process are the top three asset manager selection criteria for both stages (i.e. establishing the long list and short list), and the attributes strongly associated with the asset managers they are planning to increase their exposure to.

In stage 1 of the selection process (i.e. discarding unsuitable managers), size of the company/AUM is the most important factor for one out of four respondents and is among the top three criteria for almost half of them. As French institutions on average manage a significantly larger AUM than their counterparts in other European countries surveyed, they probably have to discard small asset managers from the outset, which could explain the importance given to this factor.

Other findings from our French Institutional Investor Research include:

  • The ongoing low interest rate environment has prompted French institutions to change their strategic asset allocation and this has resulted in an increased portfolio diversification as well as more investments in illiquid assets to generate returns.
  • The perception of sponsored editorial content has improved since 2015 and – even though the vast majority are aware of the potential bias – most respondents would read it as long as it adds value. Asset managers could use this information to sponsor high-quality content rather than articles that are too sales-focused.
  • French institutional investors use fund ratings more often than their counterparts in the other countries surveyed even tough they use them less than wholesale intermediaries (i.e. discretionary portfolio managers and fund selectors).
  • Almost all French respondents (92%) are using social media for professional purposes, especially LinkedIn. Compared to wholesale investors, they tend to access them more via mobile devices.

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How best to communicate to institutional investors – US

Golden Gate Bridge

Colleagues or peers are considered the most reliable information source by US institutional investors

Key points:

  • US institutions prefer targeted and personalised communication and the focus should be on quality rather than an overload of mass-generated emails or cold calls
  • Used by 47% of respondents, Morningstar is by far the most popular fund rating provider, in line with all other countries surveyed. However, a further 47% of US institutions do not use fund ratings
  • Event attendance is quite high among US institutional investors and for 39% events are the preferred communication form

Attendance of events is quite high among US institutional investors, especially for publisher and industry association events, and events are the preferred communication form for 39% of respondents to our US Institutional Investor Research.

Nonetheless, US institutional investors’ reliance on events as a key source of information on managers and strategies is relatively low compared to other information sources. Colleagues or peers are considered the most reliable, followed by asset managers and consultants. Most US respondents (67%) use investment consultants, particularly in the pensions industry.

Strategy/investment process, performance/track record and investment team are the top three criteria for both stages of the asset manager selection process (creating a shortlist and picking the winning manager). These criteria are more important in stage two, while regulatory issues and reputation of the asset manager drops in importance as selection criteria for picking the winning manager.

Manager selection criteria US

Between September 2019 and March 2020, Fundamental Research surveyed institutional investors in the Netherlands, the UK, Switzerland, the US, Germany and France about their views on global trends, asset manager communication, manager selection, their media consumption habits, and their top asset manager brands.

As a result of the increasing life expectancy coupled with the ongoing low interest rate environment, longevity is by far the most important trend for US institutional investors. The ongoing low rate environment is perceived as disruptive and respondents cope with this challenge by moving more towards alternative investments and absolute return strategies.

When it comes to asset manager communication, US institutions prefer targeted and personalised communication and the focus should be on quality rather than an overload of mass-generated emails or cold calls. In light of this, monthly communication has the respondents’ preference. In terms of topics, investors are looking for information on market trends, asset allocation/investment strategy and specific sectors/asset classes such as alternatives and emerging markets. The interest in such topics is consistent with the findings in other countries surveyed.

Other findings from our US Institutional Investor Research include:

  • Similar to the European countries surveyed, US institutional investors are planning an increase in ESG/sustainable investing. Nonetheless, it is only a minor criterion for picking the winning manager in the asset manager selection process, suggesting that sustainable investing is not as popular in the US as it is in Europe.
  • Used by 47% of respondents, Morningstar is by far the most popular fund rating provider, in line with all other countries surveyed. However, a further 47% of US institutions do not use fund ratings.
  • LinkedIn is the social media platform that is most widely used for professional purposes. Institutional investors are using the professional networking site three times more than they did in 2015.

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