The marketing of hedge funds has long been restricted by the federal government, along with cigarettes, liquor and other products that were considered risky for consumers. But, the U.S. Securities and Exchange Commission has lifted the ban on hedge fund advertising recently. Some of these marketers will soon be rolling out ad campaigns.
Financial services firms that seek out investors for hedge funds will be informing their clients that these opportunities have a high risk of failure as well as a chance of incredible yield. Some analysts believe that hedge fund managers, who charge healthy fees for their expert advice, are not able to generate “alpha” or “risk-adjusted returns” the way that they used to. After all, it’s increasingly difficult for any individual to work as quickly as the programs that now run much of the buying and selling on Wall Street.
However, there will be investors willing to put their money into hedge funds and one way to reach them will be through ad campaigns. A recent article in Advertising Age noted that many of the large investment houses will need to explore their advertising strategies carefully. They must reach a select audience with these campaigns so TV might not be the best vehicle. Some experts believe that print ads and placements in high-end publications will be one strategy. Smaller hedge fund managers may decide to promote their offerings on their websites and through social media. We can also expect to see B2B campaigns as managers reach out to financial advisors and stock brokers who can then decide which of their wealthy clients might be interested in these financial vehicles.
To learn more about investment opportunity seekers, check out the AudienceSCAN report available on the Research Store at ad-ology.com.[Source: Kolhatkar, Sheelah. Hedge Funds are for Suckers. Businessweek.com. 11 Jul. 2013. Web. 23 Jul. 2013; Cole, Marine. Hedge Funds Won’t Rush to Advertise. Adage.com. 12 Jul. 2013. Web. 23 Jul. 2013]