Investment trusts need to get the hang of B2C marketing

Lucian Camp is a financial services brand consultant, copywriter, author and blogger. He co-presents the On The Other Hand podcast.

Recently I’ve been pursued across various relatively obscure cable TV channels by a growing number of commercials for investment trusts.

If you don’t share my enthusiasm for Air Crash Investigations and repeats of Dad’s Army you may not have had the same experience.  But believe me, in the last few months I must have seen at least half a dozen of them.

Unsurprisingly, the commercials are all cheaply-made and amateurish, consisting more or less of a voice-over reading out the trusts’ investment objective to a visual accompaniment of bland computer graphics.  Almost the only notable point that comes to mind is that one of them has surely earned a place as the first TV advertiser ever to include the word “idiosyncratic”  in its voice-over.

It’s difficult to believe that any of this activity is resulting in any kind of significant spike in private investment, partly because the commercials are so utterly unpersuasive but also because, as far as I can see, none of the advertisers has taken the trouble to build any kind of online pathway for anyone who does find themselves tempted to invest.

Assuming I’m right about that, I wonder how disappointed the Boards who signed off this activity (and expense) are going to be.

The answer is that I really don’t know.  There still are people out there who have a touching faith in the power of TV advertising, and implicitly believe it will deliver fabulous results.

But I suspect these optimists will be in the minority.  For the majority, the rationale behind launching these campaigns is much more specific:  it’s part of the general tizz that they’re in about the threat of activist investors.

I must say that on the face of it, the main activist assailant, Saba Capital, doesn’t seem to be very good at it.  They came roaring into the sleepy village that is Investment Trust Land a few months ago, spouting ferocious criticisms of the way that the seven trusts in their sights were managed and the performance, or lack of it,  they were achieving, and demanding shareholders’ meetings to turf out the boards and managers, and install their people instead.  Then, in quick succession, the shareholders of all the threatened trusts voted overwhelmingly to stick with the status quo.  Collapse, as the saying goes, of stout party.

From the outside it all looked a bit farcical.  But I suppose it may prove to be only the first skirmish in a much bigger and bloodier war, and the threat to many trusts’ boards and managers may be much greater than it currently appears.

Even if that turns out to be the case, though, it’s difficult to believe that amateurish commercials on little-watched cable channels have much of a part to play in the trusts’ defence.  But realistically, many of the threatened trusts probably don’t know any better.  Those that are managed by large, sophisticated asset managers do have access to some reasonably grown-up marketing resources.  But self-managed trusts, or those managed by small asset managers with little or no retail business, really are quite remarkably ignorant of the sorts of things that you do to get the attention of retail investors.

It’s an interesting and highly unusual experience to watch a whole group of players in a market sector grappling with a new and sudden need to get to grips with marketing and communicating to retail customers.

Of course there are plenty of canny old retail marketers, like for example me, who stand ready to offer advice on how it’s done, should they feel the need for it.

Keep the word “idiosyncratic” out of your TV commercial’s voice-over, would be one of my first suggestions.