Advertising data reveal big fund house spenders

Δημοσιεύθηκε: 5 Απριλίου 2015 - 00:47

Advertising spending by Invesco Perpetual tripled last year. The group embarked on a charm offensive to bolster its brand following the departure of Neil Woodford, the company's star fund manager.

The UK fund house increased its advertising spend to £6.2m, making it the third-biggest advertiser in the UK funds market behind Old Mutual Global Investors (OMGI) and Fidelity Worldwide Investment, the biggest spender.

Amin Rajan, chief executive of Create Research, the consultancy, said of the jump in spending by Invesco Perpetual: "The publicity surrounding Woodford's departure was such that Invesco had to react. Advertising was the easiest way for it to reassure clients it has a strong team."

Invesco Perpetual declined to comment.

According to estimates compiled by Fundamental Media, a media planning agency, OMGI also more than doubled its advertising spend, to almost £9m in 2014. This was due in part to a rebranding exercise following the merger of Old Mutual Asset Managers and Skandia Investment Group in 2012.

Fidelity increased its advertising spend by 16 per cent, to £13.2m.

Mike Richards, director at Capital City Media, a London-based media agency, said Fidelity has long held the position as the UK fund market's most active advertiser.

He said: "Even during the financial crisis, Fidelity continued spending on advertising to maintain brand awareness and loyalty."

Although fund companies dispute the reliability of the data, suggesting estimates of asset managers' spending in the trade press, for example, are inflated by the use of "rate-card" prices, OMGI's strategy appears to have paid off. It had net new inflows of £2.5bn in 2014, up from £700m in 2013.

Invesco Perpetual, however, suffered redemptions of £4.3bn last year despite the advertising drive.

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Diana Mackay, head of Fund Buyer Focus, a market research company, said advertising is a significant issue for fund managers in the UK. There is an array of independent financial advisers and regulatory changes such as the Retail Distribution Review, which banned commission payments by fund managers to financial advisers, that had an impact. "The consumer message is becoming more important," she said.

The Fundamental Media data also found that Jupiter kept its spending unchanged at £4.8m last year, while M&G increased its advertising spend by almost a quarter, to £4.2m.

BlackRock cut its advertising outlay by 30 per cent to just over £4m, according to the data. A spokesperson for the world's largest fund manager, disputed the figures, saying BlackRock had not reduced its spend.

Louise Howse, managing director at Fundamental Media, agreed that there has been a growing focus on direct-to-consumer advertising with RDR. This has resulted in the creation of large numbers of so-called "orphan" investors unwilling or unable to pay for financial advice.

Carmignac, the French house, spent the least of the 20 groups analysed by Fundamental Media (£108,000), while Vanguard, the world's second-largest fund manager, spent £325,000.

Online ads accounted for almost a third (31.4 per cent) of total spend (£61.5m) in 2014, while 23 per cent was spent on advertising in national newspapers.

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