Sie sind auf Seite 1von 8

Traditional Media Key To Wealth Management Marketing

Social media may be all the rage, but traditional media plays a more important role in wealth managers marketing plans for high net worth clients. Print, radio and television can play a tremendous role in marketing, and its really not that difficult to utilize them on an unpaid basis. Wealth managers should leverage local media outlets to create market visibility, according to the study, and the current flood of news stories about the global economy and finance offer a golden opportunity for financial advisors to do just that. Being an informed commentator on events in the news is particularly relevant in this environment. In a 24/7 news cycle, and with so much news coming from the Mideast, Japan and Washington that have financial implications, local media outlets are looking for as much expert opinion as possible. Lezynski also advised advisors and wealth managers to conduct surveys in their communities on newsworthy events that can be easily picked up by local media. You want to be sure that the media has open access to you as a local resource, he said. Demand is high now, but you want to maintain the relationship on a continuing basis. Philanthropy is also an effective way to get unpaid coverage in local media, according to Marla Bace, a partner and chief marketing officer for Brinton Eaton Wealth Advisors in Madison, N.J. On May 1, Brinton Eaton will sponsor of a 5K race that will raise funds for the Madison Education Foundation, and the firm has already received coverage in local papers and websites, with TV coverage expected as well, according to Bace. The key for this kind of marketing is to make sure its the right niche, Bace said. You have to ask Does this support what we do as a business? Since the core of what we do is financial education, supporting an educational foundation makes sense for us. Advertising Critical For Large Firms While unpaid traditional media is seen as an effective marketing tactic for local firms, paid advertising in newspapers, magazine and on television remain critical for large national wealth management firms.

A lot of people, especially baby boomers, draw conclusions about the strength of brands from traditional print and broadcast ads, said Dave Swanson, founder and managing principal of SwanDog Strategic Marketing, a Chicago-based advertising and marketing firm. The old brand conventions havent gone away, which is that something that is branded is better than something that is not. And if youre using traditional print and broadcast ads, youre controlling the message and reaching a larger number of people than you could have otherwise. Leading wealth management firms such as Merrill Lynch and Northern Trust agree. Merrill, in fact, is about to embark on a $15 million to $20 million campaign next month using the theme Power of the Right Advisor. The campaign is designed to both highlight the union of the financial advisor and the client and serve as a recruiting tool for the firm, said Justine Metz, head of marketing for Bank of America Global Wealth &Investment Management. To create awareness for the Merrill brand, the campaign will be spread across every channel that our clients are likely to engage, including TV, print and digital, Metz said. Ads will run in such traditional media outlets as The Wall Street Journal and The New York Times and on network television. For potential U.S. Trust clients, Metz is also producing video ads for PlumTV, a new network geared to a high and ultra-high net worth audience. Northern Trust: Expertise Matters Northern Trust is also launching a new advertising campaign, designed around the theme Expertise Matters, said Carl Uetz, senior vice president and director of advertising and creative services for the firm. The campaign is designed to highlight Northerns expertise in different areas of business, Uetz said. While Northerns use of digital and social media is increasing, traditional print and broadcast outlets are still the most consistent way to raise awareness of the brand, according to Uetz. Its the highest level of conveying familiarity with the brand and knowledge about all the services you are in. But to reach Northerns target market of affluent prospects, the firm takes great pains to be very selective about what properties we use, Uetz said. Newspapers include The Wall Street Journal and the Financial Times, magazines include The Economist and the firms television ads usually appear on prestigious Sunday morning public affairs programs and golf tournaments. Its very important to be in the right environment for this type of marketing, he said.

I have used direct mail and seminars VERY effectively to market wealth management to seniors. The key has been messaging. These are baby boomers or older. If they are "depression era" they want value, security, trusted advisors, and everything in the piece needs to support that. For the boomers who fit in, they want peace of mind, stability, and options for wealth transfer. We switched one client's mailer for a printed invitation (5x7, designed like an invitation, no solicitation) and saw attendance double. We also "qualify" audiences with asset minimums, to avoid the "shrimp eaters." That being said, the number one trick I found to include on direct mail pieces: free parking! The most important info I've found? You MUST give value in either the mailer, the seminar, or both. Not just give-aways, but in the content. We've recommended to two clients to "partner" with other professionals, and that has really helped. For example, we hooked up one wealth management client with an insurance pro and an estate planning attorney, and attracted a big audience. Each gave 20 minutes of REAL info, not just sales stuff. Our client just moderated, which made them look like a real smart person to know. Debt Market
The Debt Market is the market where fixed income securities of various types and features are issued and traded. Debt Markets are therefore, markets for fixed income securities issued by Central and State Governments, Municipal Corporations, Govt. bodies and commercial entities like Financial Institutions, Banks, Public Sector Units, Public Ltd. companies and also structured finance instruments.

Debt instrument represents a contract whereby one party lends money to another on pre-determined terms with regards to rate and periodicity of interest, repayment of principal amount by the borrower to the lender.

In Indian securities markets, the term 'bond' is used for debt instruments issued by the Central and State governments and public sector organizations and the term 'debenture' is used for instruments issued by private corporate sector.

Participants Given the large size of the trades, Debt market is predominantly a wholesale market, with dominant institutional investor participation. The investors in the debt markets are mainly banks, financial institutions, mutual funds, provident funds, insurance companies and corporates.

What are the advantages and disadvantages of mutual funds? Mutual funds are currently the most popular investment vehicle and provide several advantages to investors, including the following: 1. Advanced Portfolio Management You pay a management fee as part of your expense ratio, which is used to hire a professional portfolio manager who buys and sells stocks, bonds, etc. This is a relatively small price to pay for help in the management of an investment portfolio. 2. Dividend Reinvestment As dividends and other interest income is declared for the fund, it can be used to purchase additional shares in the mutual fund, thus helping your investment grow. 3. Risk Reduction (Safety) A reduced portfolio risk is achieved through the use of diversification, as most mutual funds will invest in anywhere from 50 to 200 different securities - depending on their focus. Several index stock mutual funds own 1,000 or more individual stock positions. 4. Convenience and Fair Pricing Mutual funds are common and easy to buy. They typically have low minimum investments (some around $2,500) and they are traded only once per day at the closing net asset value (NAV). This eliminates price fluctuation throughout the day and various arbitrage opportunities that day traders practice. However, there are also disadvantages of mutual funds, such as the following: 1. High Expense Ratios and Sales Charges If you're not paying attention to mutual fund expense ratios and sales charges, they can get out of hand. Be very cautious when investing in funds with expense ratios higher than 1.20%, as they will be considered on the higher cost end. Be weary of 12b-1 advertising fees and sales charges in general. There are several good fund companies out there that have no sales charges. Fees reduce overall investment returns. 2. Management Abuses Churning, turnover and window dressing may happen if your manager is abusing his or her authority. This includes unnecessary trading, excessive replacement and selling the losers prior to quarter-end to fix the books. 3. Tax Inefficiency Like it or not, investors do not have a choice when it comes to capital gain payouts in mutual funds. Due to the turnover, redemptions, gains and losses in security

holdings throughout the year, investors typically receive distributions from the fund that are an uncontrollable tax event. 4. Poor Trade Execution If you place your mutual fund trade anytime before the cut-off time for same-day NAV, you'll receive the same closing price NAV for your buy or sell on the mutual fund. For investors looking for faster execution times, maybe because of short investment horizons, day trading, or timing the market, mutual funds provide a weak execution strategy.

Advantages of Mutual Funds

Management: One of the biggest advantage is that in very low cost the investor gets his investment managed by experts. If they want to get the services solely for their investment , it can be very expensive but by investing in MF they can take advantage of the scale. Scale Advantage : The transaction costs of a single indivisual is very less because mutual funds buy and sell in big volumes. Diversification : With mutual fund investment your money gets diversified in a lot of things, which helps in minimising the risk factor. Also if one particular sector doesnt perform well the loss can be compensated with profits made in other sectors. Liquidity and Simplicity : You can sell or buy mutual funds anytime. So mutual funds are good if you want to invest in something which you can liquidate easily . Also MF are very simple to buy and sell .

Disadvantages of Mutual Funds

Risks and Costs: Changing market conditions can create fluctuations in the value of a mutual fund investment. Also there are fees and expenses associated with investing in mutual funds that do not usually occur when purchasing individual securities directly. No Guarantees: As Mutual funds invest in debt as well equities , there are no sure returns . Returns depends on the market conditions . No Control: Investor does not have control on investment , all the decisions are taken by the fund manager. Investor can just join or leave the show.

Advantages of Investing Mutual Funds

Professional Management - The biggest advantage of investing in mutual funds is that they are managed by qualified and professional expertise. Since most people are busy these days they do

not have the time to monitor and manage their investment portfolios. However incase of mutual funds investors are relaxed that their funds are in safe hands. Diversification - Investing in mutual funds does not require the investor to buy individual bonds and stocks he purchases units of different mutual funds thereby spreading the amount of risk. In this way his risk gets minimized to a great extent. By investing in different assets the investor is sure that if he incurs losses in any particular fund then he might gain from another investment. Liquidity - By investing in mutual funds you can liquidate your investment as and when you like. Simplicity - Investing in mutual funds is very easy and simple when compared to the other instruments available in the investment market. Investing in mutual funds also does not require large amounts of money as you can start with a minimum Rs.50 per month.

Disadvantages of Investing Mutual Funds

Professional Management- Some of the mutual fund managers are not experienced enough and so they do not explore all the available opportunities in the market. Costs - When an investor purchases a unit of a mutual fund then he is charged an entry load which is actually an extra cost that the investor is paying. Also when the investor is exiting from the mutual fund he is again charged an extra cost as exit cost.

Dilution - Dilution is the direct result of diversification. Since investors have their money spread across different assets the high returns earned do not make much of a difference.

Taxes - Tax is something that is most often ignored by the mutual fund manager. When the mutual fund manager sells a particular security it triggers the tax of the individual thereby almost nullifying the tax saving in mutual funds investment.


Calculating return on investment is an important aspect of any investment review. Whether investment mode is stock, mutual fund, debts, savings account etc. you need tools to calculate the return on investment so that relative effectiveness of different investments can be ascertained. Herein we will discuss two formulas which are very effective in calculating return on investment.
IRR (Internal Rate of Return)

Discount rate at which present value of a series of investments is equal to the present value of return of those investments. In layman language, this is the annualized return for a series of investment made at regular interval. Key thing to note here is that while amount invested may vary, interval at which investment is done has to be same or equidistant. XIRR (Extended Internal Rate of Return) One of the drawback of IRR formula is that it can be only be used for equidistant investment intervals and not irregular ones. In case of irregular investments made XIRR can be used. IRR does not solve one problem and that is when the payments are at Irregular interval. In that case we use XIRR. Scenario 2 You can also compare two business ideas using the XIRR , and decide which one is better then other . In any business concept you have to invest money and you get back some return , but these returns can be irregular and different amount every time , In that case you can use XIRR and compare the returns of both business and decide the one which has better XIRR CAGR
The average year-on-year growth rate of an investment over a number of years. While investments usually do not grow at a constant rate, the compound annual return smoothes out returns by assuming constant growth. This makes accounting for the investment tidier. The year-over-year growth rate of an investment over a specified period of time. The compound annual growth rate is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period being considered. This can be written as follows:

Compound annual return = (Ending Value / Beginning Value)^((1 / n) - 1) where n is the length of time of the investment in years. It is also called the compound annual growth rate. CAGR isn't the actual return in reality. It's an imaginary number that describes the rate at which an investment would have grown if it grew at a steady rate. You can think of CAGR as a way to smooth out the returns.

Don't worry if this concept is still fuzzy to you - CAGR is one of those terms best defined by example. Suppose you invested $10,000 in a portfolio on Jan 1, 2005. Let's say by Jan 1, 2006, your portfolio had grown to $13,000, then $14,000 by 2007, and finally ended up at $19,500 by 2008. Your CAGR would be the ratio of your ending value to beginning value ($19,500 / $10,000 = 1.95) raised to the power of 1/3 (since 1/# of years = 1/3), then subtracting 1 from the resulting number: 1.95 raised to 1/3 power = 1.2493. (This could be written as 1.95^0.3333). 1.2493 - 1 = 0.2493 Another way of writing 0.2493 is 24.93%. Thus, your CAGR for your three-year investment is equal to 24.93%, representing the smoothed annualized gain you earned over your investment time horizon.

During their first meeting, Amy and Steve began by reviewing their goals and objectives with their advisor. It soon became clear that they needed a comprehensive plan to effectively manage their total financial situation.

Once Amy and Steve's financial goals were finalized in a second meeting, their advisor began to formulate a plan to prioritize their goals and come to an agreement on actionable steps that could be taken over the coming years. In this particular instance, it was decided that emphasis should be placed on building cash reserves for emergencies, followed by implementing a savings strategy for their future and their children's college funding. Because the interest cost of their current debt was low, it made the most sense to make regular payments and not be concerned about paying the loans off early.

With the recommendations from the McKinley Carter advisor, Amy and Steve were able to implement a plan they could follow successfully by basing their planning decisions on mutual goals and the financial interests of their family. Throughout the next year, their advisor stayed in regular contact with them to ensure the appropriate steps were being taken and to keep them on track. Once the initial steps had been taken, Amy and Steve were able to focus their energies on their family and careers, comfortable in the knowledge that their financial plan was in place and being managed full-time by trusted professionals.