Insurers Find Ways To Keep Fund Sales Aloft
In a difficult equities market, some insurers that sponsor mutual funds say they have been have been able to avoid harsh sales slumps and even increase market share by reassuring customers that funds continue to be a smart investment.
“Were trying to increase our visibility with wholesalers and to encourage producers to get in front of clients and reassure them,” says C. R. Shaw, vice president for mutual fund marketing for American Skandia Life Assurance Corp., Shelton, Conn.
David N. Levenson, senior vice president of Hartford Financial Services Hartford Mutual Funds, Simsbury, Conn., says his company is emphasizing to investors that right now is a perfect time to be in mutual funds.
“We tell them that markets may go down but not forever, and if you stay in money markets, you are not ready for the rally, because it will happen,” Levenson says.
The Principal Financial Group, Des Moines, Iowa, emphasizes to financial advisors that its funds are a logical progression of their established approach to clients retirement needs.
“Basically, mutual funds are about diversifying with a strategy with optimal risk/return payoff and fit in nicely with our reps method of selling, which is needs- based,” says Kyle Selberg, director of Principal Financial Group.
American Skandias Shaw says his company is telling advisors that the key to mutual fund sales right now is to keep clients focused on needs rather than on a given funds recent performance.
The company is also emphasizing the place of funds in retirement planning and for 529 college saving plans, Shaw adds.
The holiday season is when advisors should be seeking to make significant fund sales, he points out.
“About 40% of inflows come in the fourth quarter,” he says. “Funds represent a great gifting opportunity, and theres not so much focus [by clients] on performance.”
The company also calls customers attention to the consistent growth of its funds, he explains. For instance, he notes, American Skandia Advisor Funds, managed by Sanford C. Bernstein in New York, has steadily outperformed the S&P 500 index, even though its growth during the high-flying days of the stock market may not have been considered spectacular.
“Everyone would have laughed at us in 1999 [when many funds were boasting 30% returns], but ASAF really resonates now,” Shaw says. “This is a core investment for clients that will be broadly diversified and wont give them a lot of negative surprises.”
American Skandia also maintains a healthy sales volume by encouraging advisors to make appointments with affluent clients and to provide extra service–such as by taking along a company money manager to client meetings to personally brief them on the economy, he says.
The company is also supporting brokers by helping them run seminars and teleconferences for their top clients, featuring talks by American Skandia financial gurus.
The Hartford has seen mutual funds sales decline only slightly over last year. It has outperformed most other mutual fund vendors, Levenson says, with such tactics as its new “Are You Ready?” marketing campaign.
In brochures and seminars, the campaign tells customers they need to be in funds if they hope to benefit from an inevitable market recovery.
Levenson notes, too, that the company has been introducing new products to appeal to skittish investors. Recently, it brought out five new funds, led by Hartford Inflation Plus, which is primarily invested in Treasury Inflation Protected Securities issued by the U.S.