INTERVIEW: Asset manager Dimensional puts philosophy, not products, at the centre of pitch

Alex Sword


The Financial Services Forum

US-based asset manager Dimensional is prioritising an overall approach rather than specific products in its marketing strategy as it looks to expand globally, according to Global Head of Marketing Karen Dolan.

Founded in 1981, Dimensional has $660 billion in assets under management. Its financial science-led approach encompasses a broad range of investment products, including equity and fixed income which are distributed around the world from its 13 offices.

Prior to Dimensional, Karen worked at Morningstar for nearly a decade, rising to director of its team of fund analysts in North America.

“Our job was to try and dig in and understand whether [asset managers] were delivering what they said: whether they were putting something forward in the market which investors can succeed with or whether it was just a product to sell.”

During this time the environment shifted to professional investors such as institutions and advisors being the decision makers, she explains.

This prepared Karen well for her current role at Dimensional, which firmly orients its messaging towards the B2B professional investors, advisors and institutions which sell its products onto the end-investor.

“We’re committed to helping professional investors understand fully what we offer.”

Karen says that “a lot of research and empirical study” goes into how Dimensional manages money. Volatility and “shiny objects” can get in the way she says, but the firm’s job is to wade through that.

“We’re trying to do better than indexing but offer the same benefits, with diversification at a low cost.”

The firm is selling an approach and mindset rather than products, Karen explains.

“Our primary focus is how do we nurture outstanding long-term relationships where we help professionals not only with the investment products, but help them help clients use it well.”

This means the strategy is educational and content-driven, she adds. Rather than trying to sell a traditional product such as a fund, Dimensional talks about its approach, the research and how a fund might be used.

“It’s easy to change investments, but harder to change how people think about investing and even harder to change how they feel about investing. The latter is what we’re focused on: how do we help people succeed as long-term investors by supporting professional investors.”

Unlike some of its competitors, Karen adds, the firm doesn’t focus on building a retail business. It does however provide content designed to help its professional clients communicate to their own clients, including families and investment committees.

This means “getting into the places where conversations are happening”, including highlighting in plain language the main takeaways of the company’s regular research. It includes a range of essays, videos and slides.

“You can’t avoid uncertainty, so we help our clients live through it.”


Content that supports sales

Karen says that much of the content stems from the marketing team’s “phenomenal relationship” with sales.

The department’s partnership is both top down and bottom up, she explains. A lot of the activities start with goals set at the firm level by the sales leadership.

“Our goal as a marketing team is to support the sales team out on the road with those priorities,” she says. This could be through campaigns, content or events.

There is also a channel marketing team embedded within each channel, which works to understand their sales process and business development goals.

“They can understand what is unique, what is different, and share ideas across channels, because they have a foot in both sales and marketing. It’s a true partnership focused on priorities.”

For the audience Dimensional is trying to reach, word of mouth is critical. For Karen, the “new word of mouth is social media.”

“It offers the opportunity to build networks and communities and have people share messages they believe in. Social media has taken what was a person-based community and made that possible with digital tools.”

She adds that digital events have seen engagement go up by some measures, due to it being easier to bring experts to clients.


Making the case for professional investment

While the professional market dominates investment management, there has been a boom in direct investing in recent years, enabled by new platforms such as FreeTrade and eToro. This is something of a challenge to firms like Dimensional which champion expert management.

While Karen says she welcomes technology making markets more accessible and bringing in first-time investors, “what it doesn’t do is help people learn how to be good investors.”

“There’s a big difference between long-term investing and gambling. I sometimes wonder if there is a rite of passage before becoming a long-term investor, where people think they can beat the market before they learn how hard that is.

“You might have a few wins but the market is a powerful information processing machine. In many studies even professionals struggle to do better than chance [when picking stocks].”

In this climate, she says, the role of Dimensional and the professional investment market is to provide a systematic plan and approach that can navigate market volatility, providing the appropriate return for the amount of risk.

“My concern is maybe they think this is the only way,” she says, highlighting the “entertainment value” of the self-service approach.

“The good news is that you don’t have to [use those platforms] to have low-cost, accessible portfolios. You can participate and have access to the same type of returns.

“You can have a plan that doesn’t get off kilter if there’s an unexpected event. It doesn’t have to be a gamble; it can be a systematic plan and approach.”

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