New marketing programme drives record funds flow

ANZ Funds Management says it has had record money flows into its managed funds in the three months to June 30, and it is crediting the strong growth to increasing investor education and a new marketing initiative.

ANZFM general manager Graham Duston says $103 million was invested into its funds in the June quarter and this money was well-spread across all the asset classes.

"Although we have had some very volatile investment markets over the last 12 months we are starting to find that both existing and prospective investors understand investment cycles better today. They tend to be more focused on their long term goals and strategies as opposed to short term market fluctuations," Duston says.

In the past ANZ has mainly used its nationwide financial planning network as the channel for distributing its funds.

However it has recently developed a complimentary mass-marketing, no-advice programme.

The idea behind the proposition is that investors will work themselves through a process and come to a prescribed answer. It's a "no-advice" process, he says, and the customer buys a prescribed solution.

This differs from the financial planning side of the bank's operation where a client works through the process with an adviser. The adviser then comes back with various options and the investor chooses the appropriate solution.

Duston says the mass-market proposition has required a substantial change in culture and mindset at ANZFM.

"To be successful in the mass-market a new distribution paradigm had to be embraced which was radically different to the traditional managed funds distribution model," he says.

Duston believes that the industry has become too focused on the technical side of funds management and not on the customers.

Instead of thinking about alpha, tracking error, portfolio construction etc, ANZFM has looked at product design from the point of the investor.

"Investors just want to know what the investment will do for them," he says. "They want to know the benefits, not the features."

"Funds management has traditionally been seen as something for people with a lot of money. Whilst we have a very strong wealth management programme in place, this new proposition compliments the existing programme and means that we can now offer a strong funds management proposition to most investors in New Zealand," Duston says.

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