The year 2024 is shaping up to be pivotal for various fund distribution channels as they seek to innovate and rebuild trust among investorsOver the past three years, the model centered around star fund managers has been met with skepticism, leading many investors to cast their votes with their feet, driven largely by losses that many still feel the impact ofIn this climate, the fund sales industry is making concerted efforts to adapt, focusing on three main aspects: stabilization, indexation, and investment advisory.

Reflecting on stabilization, the rapid expansion of public fund scales from 2019 to 2020 saw a rise in the popularity of certain star fund managersHowever, as the allure of actively managed equity funds began to fade, the trust between fund sales institutions and their clients faced significant scrutinyThis trend toward stabilization in marketing strategies emerged as a natural response.

Statistics reveal that since reaching a historical peak of 2130.38 points in early 2021, the equity fund index has plummeted by a staggering 33% as of December 6 of the same year

Reports such as the 'Investment and Financial Behavior of Chinese Residents' by Ant Group’s research institute mirror these sentiments, indicating that individual investors are adopting a more conservative approach in their allocation between asset classes, with a marked shift away from equity funds towards fixed income products.

Platforms like Ant Group and Tianshan have responded positively to this shift, launching 'positive yield' zones in 2023 that have been met with good feedback from investorsNotably, as of December 6, newly issued bond funds accounted for 70% of all fund issuance this yearA bank wealth manager recounted a time when they recommended high-risk products to clients in 2020, only for those clients to face substantial lossesThis experience drained their personal credibility amongst clients, many of whom are still in recoveryThis encounter illustrates a larger necessity for a shift toward stabilization—a more conservative approach is now employed due to increasing risk aversion among investors.

Peng Li, the chairman of the Owl Fund Research Institute, argues that regaining investor trust is a gradual process

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For many bank clients transitioning from savings accounts, the stability of "fixed income plus" products has become more appealingIn the realm of investment advisory training sessions for bank and securities personnel, questions about providing advice that diverges from corporate key performance indicators often arise, stressing the importance of genuinely aiding clients to foster that trust.

Meanwhile, amidst challenges in selling actively managed equity funds, the marketing of index funds has emerged as a promising avenueAs some actively managed funds have faced redemptions following recent market recoveries, index funds have appeared to gain tractionThose in fund sales note the positive sentiment surrounding index funds as they tend to reflect broader market trends.

Institutions such as Ant Group, Tianshan, and multiple brokerage firms have already begun spearheading efforts in the index fund arena

For instance, late last year, Ant Group’s 'Ant Finance Golden Selection' platform introduced a section for index funds, promoting a balanced asset allocationAdditionally, JD Finance revamped its app, enhancing the index-themed features it offers, including index rankings and valuation services.

Cui Bo, director of products at the Ge Shang Fund, highlighted that while index fund marketing isn't new, interest surged following the introduction of the CSI A500 series this yearCompared to actively managed funds, index funds, with their transparency and lower fees, have become more accessible to investorsTo counteract previous challenges with high-risk, actively managed funds, index investing is starting to pave the way for enhancing sales in equity funds.

Nevertheless, it must be recognized that index fund marketing is not a panaceaIndustry insiders posit that ongoing issues with the sale of actively managed equity funds underscore a deeper 'trust crisis' between sales institutions and investors

While the rising popularity of index funds offers a renewed opportunity for investors to re-engage with equity investments, mishandling this relationship could rekindle the same trust issues.

Cui stated that investments in index funds are not without risk and may also lead to prolonged periods of stagnationInvestors who lack timing skills might find it challenging to predict long-term returnsAs institutions promote index funds, it's essential to be transparent about the risks involved, discussing the potential benefits and losses to ensure investors know how to properly use index tools.

The transformation of fund marketing further includes a shift from broad outreach to more refined, advisory-focused operationsA representative from an internet fund sales institution remarked that since the beginning of the year, their peers have shifted marketing priorities towards more granular client segmentation and operations

For instance, novice investors, who often exhibit emotional reactions to market fluctuations, stand to benefit more from guidance that prioritizes their returns over aggressive product promotion.

Flexible solutions have been rolled out this year across platformsFor instance, the Qian Cheng Fund has launched a bespoke advisory solution that tailors global asset allocation strategies for varying investor profilesThis platform allows clients to input their investment timeline, expected returns, and risk preferences to receive personalized allocations along with automated risk management and portfolio adjustments.

Additionally, the public wealth management product operator at Paipai Wang, Zeng Fangfang, shared that their strategies have combined intelligent advisory tools with market analysis, particularly during volatile market phasesMaintaining proactive communication with clients about portfolio performance and suggesting optimizations has led to a notably enhanced reception of personalized advisory services.

Ultimately, to mend fractured trust with customers, a more nuanced approach to marketing is necessary—one that emphasizes client segmentation and tailored services