White paper marketing: Walk a fine line

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Investment, wealth management, and financial planning firms agree that white papers are useful marketing tools. However, they don’t always agree on what constitutes a good white paper. Opinions diverge even more when I discuss white papers with members of the broader community of marketers and writers. These disagreements inspired the white paper survey that I report on here.

White papers should be objective, yet opinionated. This is the bottom line from the survey. If it sounds familiar, it’s because you may have seen the shorter version of this post I wrote for the American Society of Business Publication Editors blog.

Three characteristics of white papers stood out in responses to my white paper survey. Respondents said it is “very important” that white papers

  • Are factual – 82%
  • Offer “thought leadership” – 67%
  • Pose a problem and describe how to solve it – 39%

In addition, these were the only three characteristics for which no one checked “does not apply.”

To explain what these three characteristics mean to respondents, I’ll share some responses to my open-ended question, “For you, what is the most important characteristic of a white paper?”

There’s tension between these three traits and the use of white papers for marketing, so you need to walk a fine line in your white papers.

1.  Emphasize factual information

For me, “factual” means based on facts and relatively objective, although the facts in a white paper should be mustered in support of an argument. For example, a white paper about reasons to invest in small-cap stocks should present credible evidence about the broad asset class. It shouldn’t simply tout the sponsoring company’s fund.

Here are some related quotes on white papers’ most important characteristics.

  • Intellectual honesty
  • Actual education instead of attempting… to sell a product
  • Unlike blog posts and small articles, a white paper should be a somewhat seminal, all-encompassing piece on a topic. It should look at the topic from multiple viewpoints and should be an all-in-one resource on the topic.
  • That it be informative and give me concise information on a business issue about which I want to learn more (but not get a PhD!)

2.  Display thought leadership

“Thought leadership” is a tough term to define. I think it should involve uncovering new information or new solutions to problems. At a minimum, I believe, a white paper should present a distinct opinion or point of view. This is what enables white papers to influence their readers. Here’s another definition of thought leadership: “Ideas that educate customers and prospects about important business and technology issues and help them solve those issues—without selling,” said Chris Koch in a tweet to me.

One respondent said a white paper should provide “real insight into an important area of my work.” Another said, “It must contain an original idea or perspective.” Here’s a reply specific to financial services, calling for “Some genuine blue-sky thinking about something related to the market or our industry.”

3.  Pose a problem and suggest a solution

For me, it’s critical that a white paper pose and solve a problem faced by readers. I emphasize this because it gives your audience a reason to care about the white paper.

For example, if you write a white paper aimed at wealthy individuals, you should start by identifying a problem that they face. Sure, it should be a problem related to your business, but if your topic doesn’t hit your readers’ pain points, it won’t command their attention.

Here’s one response from the investment world.

I start with “what do our customers/prospects want/need to know?” Then I connect our expertise to that need. In investment white papers it’s very often economic outlook, emerging trends, or new approaches to old issues. These topics are the ones that people will be drawn to and read.

Here’s a response that also discusses how to organize a white paper. “Take a topic critical to the audience we support and define it. Show why it matters. Issue, at a minimum, a soft call to action for addressing the issue.”

The next quote introduces the issue of marketing along with thought leadership. For this respondent, it’s essential that a white paper “project thought leadership and portray a firm’s associates as industry experts.”

4. Don’t brag about your company or its products/services

The final question in my survey addressed marketing. I offered respondents five choices for completing this sentence: “The company or organization that sponsors a white paper should…” I asked respondents to “check all that apply,” so totals sum to more than 100%.

Here are the questions along with the response rates.

38% 1. Not be mentioned other than one line identifying it as a sponsor.

36% 2. Promote itself only in a “call to action” at the back that invites readers to contact it.

14% 3. Mention its products, services, or programs in the white paper.

10% 4. Pose a problem that it can solve through its products, services, or programs.

2% 5. Discuss itself in detail throughout the white paper.

Respondents disliked heavily promotional white papers, with 74% calling for minimal mention of the company sponsoring the white paper.

Here’s one person’s take on this topic.

I think the most effective white papers sell extremely softly. The harder the sell, the less likely it’s going to do anything for the company. The research itself needs to be as close to straight as possible. It’s incredibly easy to lose credibility in a paper the minute you start talking about the sponsor’s solutions etc. The only exception that works is if you quote an employee as an expert and his advice does not involve say hiring XYZ to build them a new IT system.

I received some great comments on this question, so I’m mulling over incorporating them in a new blog post on white papers.

Note on the survey

This survey was conducted in January-February 2011. Responses were solicited through my LinkedIn Groups, Twitter, and my monthly e-newsletter. As a result, many responses may come from marketers, writers, and financial professionals. I did not collect information about individual respondents.

Do you agree?

Do my survey results fit with YOUR thoughts about white papers?

Feb. 24, 2014 update: I edited this post to delete an outdated link to one of my past presentations about white papers.

 

“Smart people”: A good ad by Bessemer Trust

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“You” is one of the most powerful words in the English language. You’re much more likely to read a sentence that addresses “you” than one that starts with “we.” But sometimes alternatives work, as in a recent ad by Bessemer Trust, which uses “smart people” instead of “you.”

Do you think of yourself as one of the “smart people”? Bessemer Trust plays on its audience’s desire to be smart in its recent ad. If you still have The Wall Street Journal from yesterday, you can see it on page A5.

The ad starts with the following text:

THERE’S NO SUCH THING

AS SMART MONEY.

ONLY SMART PEOPLE.

THE MONEY JUST GOES

WHERE THEY GO.

Bessemer’s text hooked me. I’ll bet it also snared your attention.

The text benefits from being short and plain, in addition to working the “smart people” angle. It has a nice conversational tone. It sounds more like a blog post than an ad by a firm that was founded in 1907.

If you saw this ad, I’d like to know what you thought of it.

FEB. 11 UPDATE: View the Bessemer Trust campaign online

You can view the entire Bessemer Trust ad campaign on the website of www.munnrabot.com. Go to “current work” and then Bessemer Trust. Click on the ad that appears there to see more ads. Thank you, Orson Munn, for letting me know this!

Your email subject lines make a world of difference

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A simple subject line can make or break the open rate for your emails.

Would you click on an email with the following subject line?

Subject: =?windows-1252?Q?Conference=20Planning=20Survey?=

I’m probably not alone in my instinct to trash this email. I figured it was probably the work of an unsophisticated spammer.

Looking at the snippet of email address displayed by my email service didn’t inspire confidence either. All I saw was “marketer-ese.” At best, I figured, this was an email from some market research firm.

However, I felt curious, so I expanded the email line. I discovered the email was from an organization I respect, but won’t name. The full email address was something like marketresearch@ORGANIZATION.com

Your bottom line: Pick your subject line carefully

If the organization had a better subject line, I would have opened it without thinking.  Something simple, such as “ORGANIZATION NAME wants your input” would have done the trick.

Have YOU ever deleted or ignored an email because of a poorly written subject line?

Defining investment outperformance: You’ve got strong opinions

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You don’t agree on how to define outperformance by stock funds, the focus of my latest poll. You expressed your disagreement in votes as well as in your comments on my blog post, some of which I’ve quoted verbatim below.

Outperformance poll results

Almost 30% of you said that an advantage of even one basis point (0.01%) was enough for an investment to claim outperformance. Close to 20% put the break point at 10 basis points (bps). Overall, more than two-thirds of you said there was an absolute level at which asset managers could claim outperformance.

For the rest of you, it seemed that outperformance was relative. Twelve percent defined an investment’s outperformance in terms of “a certain percentage of its benchmark.” The rest of you–21%–said outperformance was defined by “None of the above.”

Here are the poll answers and the percentage replies:

* 1 basis point (0.01%): 29% of all votes
* 10 bps: 18%
* 25 bps: 0%
* 50 bps: 6%
* 100 bps: 15%
* A certain percentage of its benchmark’s return: 12%
* None of the above: 21% (Percentages may not total 100 because of rounding)

The minimalists’ approach

“Technically, a mere 1 bp excess return should arguably count for ‘outperformance,'”wrote David Spaulding of the Spaulding Group in his comment on my blog. His comment was echoed by Jeff McLean, Ph.D., who said, “I believe that a stock, fund, or variable annuity that outperforms a benchmark by any margin, no matter how small, can claim outperformance.”

Consider the benchmark

John Lowell said he’d like a manager’s performance to exceed the benchmark by at least one standard deviation, but preferably 1.5 standard deviations, before he applied the term outperformance. “To really be outperforming, I’d like to see them outperform by at least 1 standard deviation 3 years out of 5 and cumulatively over the 5-year period.”

Some of you who commented on my blog took issue with the idea of comparing performance net of fees with the performance of a benchmark that’s not reduced by fees. Here’s what Frazer said:

For example, if you have a fund with a 50BPs expense ratio being compared with the SP500 (which investors can access via ETF with an 8BPS expense ratio), you should subtract the fees from both numbers to get an accurate view of relative performance by the manager.

In this case, the fund would need to outperform the SP500 by 42BPS to claim “outperformance” over the benchmark.

I imagine that the SEC doesn’t like this approach. What marketer wouldn’t do this if it were legal?

Then, there’s the issue of what benchmark to use. Steve Smith said, “Leaving aside the degree of outperformance, two baseline criteria are also required: 1) choosing the proper benchmark (i.e. “best fit” index) and 2) having a very high (mid-90%) R squared.”

Remember the client

The financial advisors who responded to my poll said that “outperformance” is meaningless if client goals aren’t considered.

David B. Armstrong, CFA, said

I define outperformance as this – when an investor’s portfolio does better then the return required by the financial plan to meet the investors goals – that’s outperformance.

Moderately outperforming the return required in a financial plan is probably ok – most investors can get away with that safely from time to time. It’s when your outperformance is like going 95 mph in a 65 mph zone that investors have a problem. How many investors experienced a ticket or a wreck in their portfolios in late 2008? Or better yet – how many advisors sat in the back seat of the car and let their clients drive 95 mph…drunk!

Stephen Campisi, CFA, agreed, saying “…outperformance is really not about return; it’s about having more money than you need to meet your tangible financial goals.”

Campisi also suggested that fiduciary responsibility comes into play. “As fiduciaries, we need to start thinking in terms of our loyalty standard, and start thinking about meeting the client’s financial goals – and these are money goals. So, we need to “show them the money” and when we talk about return we need to show them an internal rate of return over a long period. We need to show them the return that incorporates their beginning wealth, the money they were able to pull out of the portfolio for their goals, and their ending wealth. Then (and only then) will we be acting in the best interests of the client.”

My take on this issue

I like the idea of defining outperformance relative to client goals. This is an area where financial advisors and asset management firms focused on separate accounts can improve. However, if you’re a fund company producing investment performance reports for a diverse group of investors, you lack information about client goals. So you’ve got to define outperformance relative to a benchmark.

Thank you, commenters!

I’m grateful to everyone who commented–both on my blog and in a lively discussion on the members-only Financial Writing/Marketing Communications LinkedIn Group. You made me see new dimensions to this issue. I love learning from you.

Thank you–and please continue the conversation!

Best practices for institutional asset manager websites–Can you add anything?

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Best practices for institutional asset manager websites don’t get as much attention as retail sites in the blogosphere. So I’m asking all you seasoned institutional marketing experts to help compile a list of best practices.

In this post, designer Margaret Patterson offers tips on firm-specific information, educational content, and search optimization for institutional investment management websites. Read on for the details of Patterson’s suggestions.

Firm-specific content

In addition to the basics, include the following, suggests Patterson:

  1. A complete “Executive Experience” organization chart, clearly featuring all analysts and their areas of expertise
  2. A client list, but only after getting permission from each of them
  3. Use each search optimization word or phrase at least twice somewhere in your website.

Educational content

Small institutional investors appreciate education, says Patterson. For example, a glossary of terms and analytical definitions, such as free cash flow, operating cash flow, etc.

Here are more of Patterson’s content recommendations:

  1. Downloadable white papers are a big draw. For example, “Actively Managing Bonds vs. Laddering: Pros and Cons.”
  2. Consider offering email market and industry commentaries PDF files.  Google searches favor sites that have been recently altered. Regularly adding new documents improves the odds that Google will lead potential investors to your site.

Special content for special targets

Provide a page or two of content for institutional consultants, suggests Patterson. “For example, a liability-driven approach or exceptional reporting capabilities, when applicable, are music to their ears. I push service, service, service when consultants are among those being pitched.”

If you have questions for Patterson, you can email her at mpco@verizon.net.

Please help add to this list.

Use the “comment” section below or email your suggestions for best practices to
info@investmentwriting.com.

Introducing Susan to marketing managers at investment and wealth management firms

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White papers, articles, and investment commentary are great marketing tools. But it’s not easy for your firm’s experts to find the time—or maybe the skill—to turn their insights into compelling prose. I can help. I can interview your subject matter experts, review research materials, and write a piece your company can publish under its name. If you prefer, I can edit your draft. Or even teach you how to do it yourself.

You may benefit from my writing, editing, or training services if you are a marketer or communicator for

  • Investment managers—especially if you’re marketing to financial advisors
  • Wealth managers
  • Vendors to any of the above

What you want to write–and how I can help

If you are bursting with ideas, I can turn them into

  • White papers
  • Articles
  • Market or investment performance commentary—commentary may be based on interviews or on attribution analysis and other materials provided by you

If you want to write a piece—or improve your draft—you have several options. You can hire me to

  1. Interview your experts and write your piece
  2. Turn source materials you provide into a polished piece
  3. Use a combination of methods 1 and 2

When you contact me, ask for the graphic of my typical writing process. You’ll get a better idea of how we can work together.

 

How you’ll benefit from working with me

  • Your content will attract a bigger audience because the value you provide will be highlighted in reader-friendly text.
  • You receive your finished product quickly and on schedule. Having worked as a staff reporter for a weekly trade publication, I understand the importance of deadlines.
  • You don’t have to explain yourself in endless detail because I understand your industry. I’m a CFA charterholder who can use language as a financial professional and a journalist.

Contact me today to learn more! You can also check my testimonials on LinkedIn.

 

Boost your writers’ skills

Want to help your subject-matter experts and writers deliver better content? Take advantage of my writing workshops. I’ve presented “How to Write Investment Commentary People Will Read” to CFA societies across the U.S. and Canada. I’ve also spoken about “Writing Effective Emails and Letters” and developed customized writing workshops for corporate clients.

This post was updated on Dec., 19, 2013

Financial advisor prescription by Statman evokes strong response

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“Teaching clients the science of human behavior” is how financial advisors can help clients to overcome the fears that prompt bad decisions, writes Meir Statman in “Client fears and financial advisor services,” his guest post on my blog.

That may be easier said than done. As financial technology blogger Bill Winterberg said, “For a minority of clients, I think teaching the science of behavior may work in changing habits, but for the overwhelming majority, primitive survival instincts are seemingly impossible to counteract.”

I asked some experts–Rick Kahler, Justin Reckers, and Kathleen Burns Kingsbury–to contribute brief reactions to this controversy. Here are their responses.

Kahler: Partnering with a financial psychologist helps

Based on my experience with financial psychology, it is doubtful that all it would take for most investors to change their financial behaviors when feeling fear is more information about how the brain works. While more information will be enough for some investors to change their destructive, it really won’t help the majority.

Changing harmful financial decisions is similar to changing the behavior of any addiction. More information on alcoholism won’t be enough to change the destructive behavior of most alcoholics. Knowing you have a drinking problem is certainly the first step, but “knowing” isn’t “doing.” The same principals go for over-eaters or over-spenders. More information is rarely enough.

It takes a deeper “re-wiring” of the brain to create new neuropathways to change the manner in which we respond to difficult emotions, like fear. There are many tools available to help people do this, the most well-known being various forms of psychotherapy and group psychotherapy.

This is an example where a financial planner who partners with a financial psychologist can have such a positive impact on hurtful financial behaviors.

Rick Kahler is president of Kahler Financial Group in Rapid City, S.D. He writes the Financial Awakenings blog and is a pioneer in the evolution of integrating financial psychology with traditional financial planning profession.

Reckers: Professionals who work directly with clients will make the practical breakthroughs

I think an understanding of the science of human behavior is valuable in any setting. I do not believe “teaching clients the science of human behavior” will do much to counteract economically “irrational” behavior in financial decision-making. This is especially true when the decisions are made in the midst of emotions like fear or greed. Emotional biases are difficult if not impossible to dispel. They often require an advisor to adapt their own behavior to help work with the client’s emotional decision-making rather than try to change them. Advisors must remember that the fear exhibited by their clients is a reflection of the individual’s financial reality. I agree with Statman when he says “the fear of clients is normal.” I also believe one of the most important functions of an investment advisor is to help clients make fully informed decisions whether beset by fear or not. So I do not think the term characterizes what we should be concerned about. We will return to bull market territory and the emotions with which advisors contend will shift from fear to greed.

The real revolutionary contribution to Behavioral Finance will be a framework for advisors to apply concepts while working with clients. This framework will be developed by professionals who actually work with clients. The contributions of Statman, the Libertarian Paternalism of Thaler, the Heuristics of Kahneman & Tversky, the experiments and research of Ariely and so on, are amazing, important and exciting. But they mostly miss the next step: application to real individual lives. (Note: I have not read Statman’s book in its entirety. I will.) Otherwise we are left to contemplate whether “teaching clients the science of human behavior” will make any difference in how they actually behave at the moment of truth. I believe calculated interactions, interventions and nudges are necessary to truly have a positive effect on the financial decision-making of our clients.

Justin A. Reckers CFP, CDFA, AIF, is director of financial planning at Pacific Wealth Management. He writes with clinical psychologist Robert Simon, Ph.D., in the Practice Builder section of www.MorningstarAdvisor.com and on their blog www.BehavioralFinances.wordpress.com

Kingsbury: Rationality vs. “Fight or flight” response

Meir Statman’s prescription for financial advisors is right on the money.  Clients do react, and often overreact, when emotions are involved in financial decision-making.  Numerous behavioral finance experiments, some mentioned in Statman’s blog post, show how rational thought is overruled by a desire to minimize the pain of a financial loss.

Neuroscience tells us that the brain actually processes financial losses differently than gains. This results in clients experiencing the anticipation or actual pain of loss three times more than the joy of a financial windfall.  Scans of the brain tell us that the limbic system, normally accessed during sudden or traumatic events, is used when facing a potential loss. In contrast, the frontal lobes, the part of your brain where rational thought and executive functions,  processes financial gains.  By knowing this science and educating clients about it, financial advisor can help counteract the fight-or-flight response when fear is part of the equation by offering rational, longer-term solutions.

Understanding behavioral finance and the human side of financial advising is paramount to offering client-centric services.  Not only will this knowledge help the advisor in guiding his client, it will empower the client to understand his own psychology and use the advisor more effectively.  Like it or not, all of us are flawed, emotional human beings.

Kathleen Burns Kingsbury is founder and CEO of KBK Wealth Connection, a company passionate about helping financial services professionals and their clients master their money mindset through wealth psychology. She is the author of a new audio program called Creating Wealth from the Inside Out.

How to get a white paper written on a budget

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White papers. They’re a great marketing tool for investment and wealth managers. But what if you’re too busy to write and you lack the money to hire someone to craft your white paper from start to finish?

Three strategies suggested by Steve Slaunwhite in his chapter on “Create Your Amazing Buzz Piece” in The Wealthy Freelancer can help.

1.  “Write a very rough draft, no matter how awful.” Then, hire someone to shape up your draft.

2.  Record yourself speaking out loud about your white paper topic. Then hire someone to transcribe your thoughts, which means the person types up word-by-word what you spoke. Another option, which I’ve mentioned in “Investment manager’s secret of regular blogging,” is to use transcription software. Once you have your words in a file, you can edit them yourself or hire an editor.

3.  “Get a freelance writer to interview you.” I’m guessing that Slaunwhite is suggesting that you use the writer’s probing questions to tighten your white paper’s focus before you get the interview transcribed.

Those three approaches get your ideas out of your head and into writing. This is the hardest part for some financial advisors.

Have you tried these techniques? How have they worked for you?

Guest bloggers: 2010 in review

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I’m thankful for the knowledgeable and talented professionals who have contributed guest posts to my blog this year.

Here’s a list of guest posts sorted by topic, including client communications, marketing, social media, and writing.

Client communications

Five Tips for Delivering Bad News to Clients by Kathleen Burns Kingsbury
Talking to clients about social investing by Annie Logue

Marketing

Adding Video into the Communications Mix by Samantha Allen
The Lost Art of the Thank You Card by Suzanne Muusers
My Six Best Marketing Tips for Independent Advisors by Steve Lyons
What’s a tomato got to do with getting your fund discovered? by Dan Sondhelm
Would you like to know how financial advisors are choosing products and making investment decisions in this market? by Lisa Cohen

Social media

Be Compliant When Using LinkedIn Messages by Bill Winterberg
Financial Advisors and Twitter by Roger Wohlner
Generate Quality, Low Cost Leads with Facebook Ads by Kristin Harad
How Seeking Alpha Can Build Your Professional Reputation by Geoff Considine
Investment analysts and social media by Pat Allen

Writing

Correct Grammar Errors in Your Writing Quickly and Easily by Linda Aragoni
Making Research Readable by Joe Polidoro

How do you define outperformance by stock funds?

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Portfolio managers want to outperform their benchmarks. There’s no question in my mind about this. But how much of an advantage do you need before you can claim outperformance?

Outperformance for stocks

To keep things simple, let’s focus on portfolios investing in stocks.

Is it okay to claim outperformance if your return exceeds the benchmark’s by more than 1 basis point (0.01%), 25 bps, 50 bps, or 100 bps?

Or should the margin be calculated relative to the benchmark’s return? After all, exceeding the benchmark’s return by 26 basis points (0.26%) looks better when the benchmark returns 0.01% than when it returns 45%.

Please answer the poll in the right-hand column of this blog. I’ll report on the results in my February e-newsletter.

Diverse opinions on “outperform”

I’m literal-minded. To me, a fund “outperforms” when it beats its index by the tiniest margin, though I doubt that I’d crow about that. However, asset management companies often report such returns as “in line with” or “closely tracking” the benchmark. The concerns of their legal or compliance departments probably influence this decision.

Here’s one example:

…the Wasatch Heritage Fund posted a return of 6.22% for the quarter. These results closely tracked those of the Fund’s benchmark, the Russell 1000 Value Index, which returned 6.78% over the same period.

Meanwhile, some managers–including the manager of the Wasatch Global Science & Technology Fund–question whether their returns should be compared to benchmarks.

Typically, the first paragraph of our quarterly letter to shareholders includes a statement regarding the Fund’s performance relative to its benchmark. We intend to move away from this approach beginning with this letter, as
we think the industry norm of tracking performance versus a broad index on a quarter-by-quarter basis distracts from the Fund’s long-term investment strategy. Our new mantra, forged by the pressure of the 2008–2009 credit crunch, is that we must invest “away from the market” as we attempt to deliver exceptional long-term returns.

I’m looking forward to learning what YOU think.

Dec. 27. Oops. I made a miscalculation in discussing the Heritage example, so I’m deleting the offending sentence thanks to David Lufkin.