Making the Jobs Act Work:Mad Men Meets Wall Street

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HNW MATTERS WEBINAR SERIES

Series created specifically to help high-net worth community manage for the future

Featuring industry experts and innovators addressing critical issues facing financial services firms

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April Rudin

• Financial Services Industry Marketing Consultant

• Ultra-High-Net Worth / High-Net Worth Sector Specialist

• Digital and Social Media Engagement and Client Acquisition Expert

• Multi-Generational Communications and Media Relations Strategist

• Frequent contributor to national media outlets including The Huffington Post, BusinessWeek, Bloomberg, Reuters, Fundfire, Family Wealth Report and AssetTV

• High-Net Worth Advisory Board Chair for The Hedge Fund Association (HFA)

CONSULTANT TO THE STARSOF THE FINANCIAL SERVICES INDUSTRY

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About The Rudin Group

• Integrated marketing, branding and communications strategies for the financial services industry

• Helping UHNW / HNW community create client acquisition plans that take advantage of next generation digital platforms and communications

Challenging “Business as Usual” Practices

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A Day in the Life of April Rudin

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Our Agenda

• What Is The JOBS Act?

• How Does It Impact Asset Managers And The Way They Do Business?

• What Does It Mean For Connecting with UHNW Investors/Institutional Investment Communities?

• The Role Of Social Media In General Solicitation

Making the JOBS Act Work:

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Disclaimer:

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The information discussed does not constitute and should not be construed as legal advice.

What is the JOBS Act?

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Intended Consequences:1. Stimulate small businesses to create jobs

2. Alleviate tight credit markets

3. Access to capital – new ways for investors and managers to connect

Unintended Consequences:4. Ended the prohibition on advertising and direct

marketing by alternative investment firms – and social media!

5. Opened the door for financial services firms to access capital through crowd-funding

6. Third-party vetting

The JOBS Act Is A Law —Stop Dawdling

• Determine your process for vetting investors– SEC recommends that firms

take “reasonable steps”

• Here comes the Airplane!Create your marketing plan now--early adopter advantages and help stand out in the coming “Ad Blitz”

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The Opportunity For Funds, PE

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• Distinguished brand - visibility among peers and growing number alternative investment strategies

• Access to UHNW / institutional investors through digital media/next gen wealth and affinity investing

• Improved industry reputation among the general public

Historical View of Hedge Fund Managers

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Public Perception at Odds with Reality

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• Most funds rely on established track record of delivering superior risk adjusted returns for accredited and institutional investors

• Increasing inflows from public and private investment funds seeking to overcome funding shortfalls

• Entrepreneurial business community that creates jobs and supports greater market efficiencies

The Veil Is About To Be Lifted…

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• Alternative investment firms maintain high levels of investor privacy – seen as secretive

• Prohibited from generalized advertising – cap intro, performance-driven marketing, word-of-mouth

• Previously seen as an unregulated “Wild West”

The Advertising Avalanche

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Many large fund managers have the resources to finance:

• Television /radio Ads• Internet advertising• Event sponsorships• Venue naming rights• Product placements / endorsements

Everyone will be inundated with information from alternative investment managers

The New Super Bowl Ads-from Doritos and Beer--- Hedge Funds!

Where The “Boys” Are…

Everybody Wants a Piece of the Pie

• Large financial institutions selling “alternative investment-style” mutual fund products

• ETFs offering hedge fund replication strategies

• Roughly 10,000 other active alternative investment firms – in the United States alone!

• Allows managers to differentiate products and services in an increasingly crowded market place

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Next Gen Value Props

Are Different•Value Affinity Investing --at the heart of Crowd-funding

•Doing Good While Doing Well

•Smaller is better

•Don’t Trust Suits

•Diminishing value of “track record”

•Transparency/Authentic

•Mobile (Digital) Community

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Targeted Messaging vs. Mass Marketing

• Target and “talk” directly to each of your niche audiences via digital strategy and media outreach

• Education is Important--UHNW investors want to make informed decisions amid flood of information – 44% of millennials described themselves as “extremely” interested in improving their understanding of investing*

• Flattened playing field for smaller funds

17*Accenture 2013: "Generation D: An Emerging and Important Investor Segment"

• No more intermediaries – Cap Intro goes away / replaced with digital

• Who vets the accredited investor? New standards – individual or joint net worth (with spouse) exceeding $2M at purchase, or AUM $1M or more, excluding the value of primary residence

• What are “the steps?” What is reasonable?

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A Whole New World….

Broaden the Message for Institutional Audiences

• Power of content

• Focused on transparency, fiduciary duties

• Still seek performance but decision makers have changed

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Every day Americans have exposure to alternative products through pension funds…

Regulators will be watching

Striking a Chord with Institutional Investors

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Reinforce positive attributes, differentiators through primary messaging:

• Returns – how achieved AND bottom line results

• Transparency / Processes

Secondary Themes:Education for pension managers / plan sponsors Doing well by doing goodPositive impact on economyCommunity / charitable involvementAffinity investing

How Allocations of Marketing Resources Have Changed

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Source: www.therudingroup.com

How Do We Utilize Social Media?

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Platform Unique Factors Strategies and Best Practices

LinkedIn Business networking and relationship building, introductions

Structuring your profile and joining groups

Facebook Small Business/Personal branding/Consumer brands B to C, Business pages

Twitter Opportunistic, newswire, short burst in real-time Aggregating and curating content to attract

YouTube Most AuthenticTeach and LearnLook + Listen

In five years, all websites will be video

Google+ Feasting on SEO and Adword content Struggling to be all things

Blogging Thought-Leadership + POV, Complex ideas Content + opinion;Commenting and engaging with others

The Social Media Imperative

Source: Copyright Spectrem Group 2013

UHNW = Net worth of between $5 million and $25 million

HNW = Net worth of between $1million and $5 million

Bl

og

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47% of UHNW56% of HNW

32% of UHNW31% of HNW

8% of UHNW8% of HNW

Regularly read blogs that pertain to financial topics19 % UHNW 16% HNW

Who Is Using Social Media?

Source: Pew Research Center/American Life Project

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• 86% of 18-29 year-olds use social media

• Over 70% of 30-49 year-olds use social media

• 50% of 50-64 year-olds use social media

How is Social Media Used?

Source: Spectrem Group 2013

Younger UHNW investors are more inclined to use social media as a communication tool and read their advisors’ blogs.

• More than 25% of those under age 44 would follow an advisor on Twitter.

• More than 40% would read corporate blogs

• Over 30% rely more on social media for information than on traditional channels

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The Role of Public Relations

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• Complementary communications• Reinforce marketing themes and

messaging• Adapt content for niche markets• Establish relationships with relevant

media• Crisis communications / contingency

strategies• Lather, rinse and repeat…

Oh, and BTW

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Crowdfunding has “Arrived!”• Innovative asset managers can allocate

marketing resources by utilizing crowd-funding platforms

• Create new paths for funding small business due to credit crunch

• Jumpstart the economy via investing in small businesses

Crowdfunding Restrictions

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For the individual:

One of the conditions of this exemption is a yearly aggregate limit on the amount each person may invest in offerings of this type, tiered by the person's net worth or yearly income. The limit ranges from 2% of people earning (or worth) up to $40,000, up to a cap of $10,000 for people earning (or worth) $100,000 or more.

For small businesses:

Crowdfunding available only to issuers who do not sell more than $1 million to investors during any 12-month period. Companies seeking to raise over $1 million in 12 months will not be able to use crowdfunding.

Here are the take-aways:

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The JOBS Act has yet to be enacted, but it is law.

“It’s soup!”

It’s time to develop affinity based platforms to enhance client acquisition / communications with Next Gen wealthy

Generalized Solicitation is an opportunity to: • Differentiate brand• Create community• Improve sentiment• Market affinity• Target niches• Enhance transparency

Q & A Discussion

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April Rudinapril@therudingroup.comtwitter: @TheRudinGroup

Thank You!

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