But is there still room for these singles-hitting, benchmark-hugging, stylebox-constrained "closet indexers" in today's investment world? Two prominent industry observers are taking opposite sides of this argument.

This morning's Investment News cited Scott Burns of Morningstar as saying that low-cost active ETFs could prove the salvation of benchmark-driven managers whose relative returns are otherwise eroded by fees. "They need every basis point they can get," Burns said.

Taking the opposite view is Ben Phillips of Casey Quirk, who recently wrote that industry assets will increasingly concentrate among firms that can demonstrate one of four winning value propositions: high-return active management, cost-efficient indexing, asset allocation expertise or solutions-led distribution. There's no room in his brave new world for managers who charge active management fees for index-like returns. (Phillips's full report can be downloaded here.)

Our own experience tells us that long-only stylebox managers, while not yet an endangered species, are struggling. More and more are turning to alternative products or prepackaged solutions. In fact, it's not clear that the industry's shift in the 1990s and 2000s toward "institutional-style" investing, focused on relative rather than absolute returns, was ever a good fit for individual investors with real-world needs and goals.

Will today's new investment products provide better answers? Only time will tell, but at least the industry appears to be asking the right questions.

According to Casey Quirk's analysis, an asset manager's investing brand is as important as its performance in attracting investors. Specifically, firms with high perceived performance but low actual performance grew just as quickly as firms with high actual performance but low perceived performance.

Of course, those firms whose brand and performance were both strong did best of all. Not even close. 

Sometimes you just have to laugh at the Orwellian language dreamed up by bureaucrats. Here's my new favorite.

Currently, the SEC and CFTC are locking horns over managed futures mutual funds. The SEC regulates mutual funds and the CFTC regulates commodity trading advisors. The CFTC has been trying for years to extend its dominion over funds that invest in futures. The fund industry isn't exactly thrilled.

"Harmonization" is the word they've chosen to describe their effort at aligning the two regulatory regimes. To me, it looks more like a couple of rutting bull elk fighting over a cow. 

Is this record-breaking stock market a new market bubble?

We’re not market prognosticators at Wechsler, but we’ve been through a few up and down markets and have picked up a pretty good sense of how they feel.

Believe me, this is not what euphoria feels like.

From where we sit, the American public still seems scared of the stock market. They’re only now dipping their toes back in the water. The market itself feels pretty cautious, too, rising steadily in small fits and starts rather than through wild volatility.

The public chatter is still pretty tentative. Google quickly turns up a bucket-load of headlines on the order of, Is a stock market bubble brewing? Are we in a market bubble? Euphoria and the stock market. Dow at record as dollar hits multi-year highs - What gives? A new bull market - or a bubble?

Anyone who remembers the wild investments of the dot-com era, or the real estate madness of a few years ago, can tell you what a real bubble feels like. When people stop wondering whether it’s a bubble is when you should really get worried.

Disclaimer: This is not a prediction. The stock market will go up and down whenever the hell it likes. But if this bull market does come crashing to a halt, it won't be because we're going through some kind of wild stock-feeding frenzy.

In the latest sign of the apocalypse for active management, the largest pension fund in the United States is mulling a move to an all-passive portfolio.

The California Public Employees Retirement System's investment committee is evaluating whether the fees it pays its active managers are worth it or if paying less fees for passive management will lead to better long-term results....

“There's no room for closet indexers in an active-management shop anymore,” Art Steinmetz, OppenheimerFunds' chief investment officer said this month. “We're required to demonstrate we're worth the fees we charge every day.”

That nails it exactly. No one wants to pay active-management fees for style-box investing when they can buy the index itself for practically nothing. So how do they beat the market while they're investing in index funds? Alternatives.

The investment world is going bipolar. Passive investments are replacing active at the same time alternative investments are replacing traditional. Investors are building core portfolios from passive index funds and ETFs, while they seek their added value from non-benchmark-driven sources like hedge funds and other alternatives.

They used to call it core-and-explore. Today they call it beta-and-alpha. I call it a whole new world for investment marketers to make the most of.

So, how is the investment industry responding?  As always, there are a lot of opinions and commentary out there, but are we making it easy for investors to:

1. Find 
2. Read/Watch
3. Understand 
4. Decide

In most cases, investment companies aren’t hitting even one or two of these items let alone all four.  

#1 Make it easy to find.  I don’t want to pick on or praise anyone in particular, but of the 10 largest asset managers in the world, only half of them provide a link or article on their public homepage that begins to answer this question (I won't even get into finding information about investment philosophy and process, that's even harder to track down).  For most I had to navigate at least one or two levels to find some investment perspective and often it's buried in an area like “Resource Center,” “News and Insights” or I had to pretend to be a financial advisor.  Sorry, but this is not the first thing my mom (sorry mom, no offense) will click on. 

#2 Make it easy to consume. When I found commentary or perspective about the current environment, there aren’t many firms that present information in a way that makes me want to read it or watch it.  Unfortunately, most falls into one or more of the following content traps: 1) large blocks of copy 2) no visual elements (I just fell into this one myself) 3) weak or nonexistent headlines and 4) not another talking head!

#3 Make it easy to understand. This is closely related to #2, because if I can’t understand something I’m not going to want to read or watch it, but it’s still worth mentioning as a separate item because a lot of investment firms fall into the trap of writing long and complex commentary that often doesn’t take a stand. It may sound obvious, but most of your audience doesn't have an MBA, so whenever possible it's good to avoid industry jargon. With regard to not taking a stand, if investors are only looking for a recap of how the markets are performing they’ll go to the Wall Street Journal, Bloomberg or the hundred or so other choices they have. 

#4 Make it easy to make a decision. Again, the marks are low.  I couldn’t find one that made it clear what investors should do today other than to buy another product.  Does your chief economist or investment officer think we should sit tight or make a change to our asset allocations?  If you’ve already told the same story a hundred times, please forgive us, we need to hear it again.  I know it can be scary, but let your compliance dept. do the worrying, take a stand and be persuasive.  Investors want to be educated and convinced.

While every investment firms has a viewpoint and it exists somewhere, we pay enough fees to expect that it will be easy to find, consume, understand and make a decision about what to do with our money. 

So we went on a 12-city, 27-brand "listening tour" of the investment industry. 

As we crisscrossed the country interviewing 60 senior marketing professionals at some of the most highly regarded U.S. investments companies, we covered a lot of ground, but more importantly, we learned a lot.

Here’s a taste of what we heard: 

Tour insight #2: “Brand” is changing before our eyes.  Investment firms have long resisted the idea that they are brands.  Today, they not only embrace the notion but are grappling with new conceptions of brand brought on by the Internet era.

“We’re moving away from the idea of brand-as-promotion to the idea of brand as a set of touchpoints and experiences.”

See all 10

The world of investment marketing lives by its own rules. Whether you’re selling mutual funds or institutional strategies, retirement advice or asset allocation, the tried-and-true techniques of other marketing categories don’t necessarily apply. Investment brands don’t behave like consumer brands—or like business-to-business brands. Here’s the first reason why:

A hybrid audience of professionals and consumers

Investment brands don’t behave like typical consumer brands. By and large, they’re not marketed directly to consumers. But they don’t behave like business-to-business brands, either.

The investment business has a unique brand model. Their audience is a hybrid of professional buyers and end-consumers. Professional buyers are generally intermediaries of one sort or another, such as financial advisors or plan sponsors. End-consumers range from retail investors to plan participants to high net worth clients.

The needs and desires of each segment vary wildly. Professional buyers are swayed primarily by intellectual argument and information. But consumer brands are built by creating an emotional connection between the brand and the consumer.

Investment brands must appeal to one and all. They must deliver the facts and figures demanded by professionals, who are the primary decision-makers. (They must also deliver this information to consumers, in a lighter form.) But equally important is giving the end-consumer a feeling of confidence and trust. Investors must believe in the people with whom they are entrusting their money.

That’s the blend of intellect and emotion that drives successful investment brands.

Continue reading or download the paper.

Here’s a short list: 

“Let’s Get Visual: Marketing in a post-text world”

“People Don’t Read Anymore”

“Cisco: By 2013 Video Will Be 90 Percent of All Consumer IP Traffic and 64 Percent of Mobile”

“Steve Jobs: ‘People Don’t Read Anymore’”

And my favorite from The Onion: 

“National Essay Writing Contest Now Accepting Video Submissions”

You get the sense from these stories that not only is the written word in decline, but it will be extinct by 2030. 

Given the topic, I’m not going to drone on about the decline of the written word or give reasons for hope and optimism about the future of prose.

Instead, I just want to make a simple observation.  All of these authors don’t seem to recognize the inherent challenges, inefficiencies and sometimes ineffectiveness of a purely visual approach to producing certain types of content for different audiences.  I can appreciate an author’s naiveté or unwillingness to look beyond his or her own businesses, markets or expertise.  I do the same thing.  Given the amount of recent focus on the topic, however, I feel compelled to respond.

Also, I’m not talking about isolated industries or topics, such as investments (my bias).  I can think of a number of industries or topics where it’s not recommended and, most likely, ineffective to create a video, animation of other multimedia experience.  A few examples:

• “Animating synthetic dyadic conversation with variations based on context and agent attributes.” (From the Journal of Visualization and Computer Animation – I couldn’t find a video version of the paper.)

• “Currency Returns and Hedging Decisions”

• “Understanding Low Volatility Strategies: Minimum Variance”

• “Compliance Issues Affecting Structured Products”

I love these:

• “LIM Protein Direct Brainstem Axon Trajectories”

• “The Relation of Diagonal Ear Lobe Crease to the Presence, Extent and Severity of Coronary Artery Disease…”  The title continues, but you get the point.

I guess the question comes down to this, if you’re the type of person who's interested in these topics, would you rather watch the video?  Maybe, but more importantly, if you’re in charge of marketing this content, what makes the most sense from a business and strategic standpoint?  I’d be reluctant to recommend a video or other visual elements, beyond the graphics needed to illustrate the data for this type of content.

Maybe I’m preaching to the choir here, but hopefully you see my point.  The written word is never going away, at least not in our lifetime.  Markets may continue to fragment in a way that we can’t conceive of today.  And while this means the mass market for in-depth, academic insight and research may diminish, there will always be a need for concise, clear, humorous, articulate, etc. prose.  Without it, it’s tough to write the script.  Unless, of course, you’re watching YouTube (script optional).

“People don’t ask for facts in making up their minds.  They would rather have one good, soul-satisfying emotion than a dozen facts.”  – Robert Keith Leavitt

Money and investing come with all kinds of emotional baggage and people’s attitudes toward money can be highly emotional.  This may be less so among institutional and professional buyers (at least that’s what we’re supposed to believe) but for the consumer, hitting the right emotional notes can be critical.

A lot of ink and pixels have been spilled on the topic of investor psychology, so I’m not going to go there.  Instead, I want to talk about hitting the right emotional notes when writing to the average investor and professional buyers alike.

Bill Gross of PIMCO does this very well. Although he can be a bit long-winded. His market commentary and books almost always tell a story and are written to evoke emotion.

An example from his most recent investment outlook:

“About six months ago, I only half in jest told Mohamed that my tombstone would read, “Bill Gross, RIP, He didn’t own ‘Treasuries’.” Now, of course, the days are getting longer and as they say in golf, it is better to be above – as opposed to below – the grass. And it is better as well, to be delivering alpha as opposed to delevering in the bond market or global economy. The best way to visualize successful delivering is to recognize that investors are locked up in a financially repressive environment that reduces future returns for all financial assets. Breaking out of that “jail” is what I call the Great Escape, and what I hope to explain in the next few pages.”

Of course, this isn’t for everyone, and maybe I’m a bit of an investment geek, but I don't think you need to be a CFA to want to continue reading.

While his storytelling does a good job of attracting and engaging readers, his writing also has the potential to elicit a number of different emotional responses (all of which are better than boredom, of course):

• Anger and annoyance
• Fear and paralysis
• Shock
• Acceptance and hope

Perhaps more importantly, Bill understands the potential emotions his writing can evoke and he addresses the first three with the following techniques.

First, he prepares his audience for potential anger, annoyance, fear or shock by letting them know he’s about to tell them something they may not want to hear or agree with.

Second, after he drops a bomb, he let’s readers know that there’s hope – that his research shows there is a way out of this mess.  He offers tips and insight to allay fears, annoyance or potential shock.

Finally, he keeps it real.  He acknowledges the real challenges we face as investors and lets readers know that he appreciates the complexities, assumptions and undertones of the situations we face.  He doesn’t come across as if he has all the answers, but he does come across as someone who understands them and that give us confidence.  It helps us get to acceptance and hope.

As I dug a bit deeper on the topic of “lessons from the financial crisis,” which only returned about 40 million results, the idea of rebuilding trust came up more than a few times.  I then stumbled upon a presentation that I think offers some interesting perspectives on the topic.

Titled simply “Trust,” the author, Justin Basini, argues that trust building begins with managing risk and clearly communicating them as opposed to marketing products and services benefits.

It sounds simple enough, but it’s actually a fairly radical idea given the investment industry’s historical focus on product benefits, as opposed to managing risks, expectations and discovery of clients’ needs and objectives. 

To clarify, Justin is not saying that the industry shouldn’t discuss benefits.  He’s simply saying that there needs to be a more balanced approach to communicating benefits, as well as risks and expectations in a clear and simple way.

Unfortunately, this tendency to focus on benefits, as opposed to risks, was amplified during the recent economic crisis. 

Most crises’ start with a mistake, and either move into the social conscience as a conspiracy or incompetence.  For the entire investment industry, public perception moved directly from crisis to incompetence due to the complexity of the issue and the belief that business leaders simply didn’t manage risk appropriately or didn’t realize what they were getting into.

Top-down communications don’t work right now

The question then becomes, how do you deal with it?  Many firms continue to apply a “top-down” approach to communications.  Meaning, the CEO or spokesperson comes out with the corporate approved message.  The age of top-down communications, however, is dead (at least for the time being).  Messages now flow through numerous and sometimes unexpected channels.  As a result, marketing and corporate communications need to adapt.

You must empower and arm your entire company with the right messages for partners and consumers.  This is critical because society doesn’t trust the face of corporate America – the CEO.  They’re more likely, however, to trust their peers. 

What this also means is that for the time being, the trust challenge is not solved by differentiation but rather by whom and how your message is delivered. 

Making a difference and finding what you truly believe

Companies and the entire industry also need to prove to distribution partners and investors that they’re worthy of trust.  One of the ways you can do this is by recognizing and communicating what your role is in the global economy and what your responsibility is to your community and to people’s lives. 

In other words, how do you make a difference as opposed to how are you better or different?

It sounds risky, especially given the negative market environment we’ve just experienced, and finding that right message can be difficult, but in reading another interesting post by Steve Gardner, President of Gardner Nelson + Partners it’s clear that the companies that are willing to communicate what they really believe, no matter what the market environment, will be rewarded in the long run.

P.S. As this post was publishing I received an email about John Hancock’s new “Trust” campaign.  The ads are aimed at stressing the importance of trusted advisors with one boasting, “People don’t trust the market.  People don’t trust the economy.  People don’t trust the government. But you, they trust.” 

Seems we were thinking along the same lines.

Competitrack listed the top 30 companies using QR codes in their print advertising: OppenheimerFunds ranked number one (85%); State Street, number four (61%); Aetna, number eight (33%); American Express, number 13 (21%); and Chase, number 18 (15%).1 According to Competitrack, more than three out of every five print ads run by OppenheimerFunds and State Street in 2011 featured QR codes.

Martha Willis, CMO, OppenheimerFunds, said that the QR codes drive people to GlobalizeYourThinking.com, a site that delivers “snackable” content to advisors who can then send it to their clients, including white papers, investment ideas and multimedia. So instead of handing out brochures, advisors can “share these little streaming infomercials.”[2]

With this program, OppenheimerFunds received the kind of exposure—20,000 video downloads overall, QR code directly responsible for 1,000 views in 2½ months—that “would have taken [them] 20 years using the in-person model.”2

Willis draws attention to the fact that by embracing new technologies, advisors and asset managers project an image of being on the cutting edge. Using outdated modes of communication can be harmful to a brand. Asset managers should make confident use of technology and trends. 

Another example of incorporating QR codes into a marketing strategy is Emerald’s QRConnect program. Emerald is a company that provides financial advisors with turnkey seminar systems, websites, newsletters and other marketing materials. For its newsletter and website clients, a QR code is placed on the front of each newsletter. When the end clients scan it, they are brought to additional content hosted on the participating advisor’s website.[3] This encourages the client to visit the entire advisor site and provides a touch point, efficiently and cheaply.

The recent study from Competitrack and Emerald’s early adoption suggest a shift in the industry’s historically skeptical view of new technology and nontraditional marketing approaches.

[1] Competitrack, “Black White, and Read All Over,” 2012. (http://www.competitrack.com/nhpub/2dcodes/index.html)

[2] B2B, “Close-Up with Martha Willis, CMO, OppenheimerFunds,” March 30, 2011. 

[3] www.emeraldconnect.com/qr

You can use Twitter as a micro-broadcasting medium.

It doesn't need to sound like a perky, helpful friend.

It doesn't need to be a conversation.

Most social media "experts" are contemplating retail brands and individuals, not the compliance-rich, institutional, intermediary-sale world that most of us inhabit. Do you really think an institutional consultant would mind the simple tweets "Q4 performance for our Small Cap fund is now posted" or "Joanne Smith thinks Latam is overlooked and undervalued", each with a link to the website? 

I hear a lot of trepidation from asset and wealth managers about getting into Twitter. But I don't think it needs to be that complicated. Of course it'd be nice to have great company personalities tweeting from company-related individual accounts, but simply posting announcements when you can is better than a void. It provides clients with another way of getting the information they need, increases your SEO, and starts giving you the experience you need to hone a strategy that makes sense for your company.

I just don't understand why so many asset managers think they need a separate logo for each line of business. One for institutional. One for the fund family. One for their high net worth accounts. One for each foreign subsidiary. Sometimes even one for each investment vehicle! No wonder they suffer from unclear, muddled brands.

I think it must be because asset managers hire more lawyers than marketing professionals. The lawyers tell them they need to do business under a variety of legal names. So they think that means each name should be its own brand — and there's no one around to explain otherwise.

In fact, the exact opposite is true.

Over and over again, we find ourselves simplifying a client's brand architecture by consolidating logos into a single brand that's consistent across all businesses and product lines. Take Matthews Asia. It called itself Matthews Asian Funds in the retail market. For institutional investors, it was Matthews International Capital Management LLC. Each name had its own logo treatment. (Yes, it even put "LLC" in the logo — a not uncommon mistake.) And sometimes it was just Matthews.

Our recommendation was to consolidate around a single brand name. Why Matthews Asia? Because "Matthews" has the brand equity, and "Asia' is the simplest possible way of defining its unique value proposition. Dropping the "n" from Matthews Asian Funds was a subtle change that made a big difference. Now Matthews uses "Asia" consistently in its publications, new products and other ways it communicates.

A more common approach is to add the word "Investments" to make your brand broad enough to encompass all your different products, markets and lines of business. Think Fidelity Investments. Or Putnam Investments. That was the direction Ariel chose when it consolidated Ariel Capital Management and Ariel Mutual Funds into Ariel Investments. Some variations on that approach are to use the words "Investors," "Capital" or other broad words that don't align with any existing products or subsidiaries.

Or if you're really feeling brave, you can drop all your descriptors and just use your "real" name. That's what Oaktree did. It came to us as Oaktree Capital Management LLC (in the United States). But in Japan, it was Oaktree Japan. It was Oaktree Capital Management Limited in the U.K. And it used other names for its investment funds.

We suggested that it consolidate and streamline its brand. We gave it two choices: Oaktree Capital or just plain Oaktree. Most companies would have chosen the former. But Howard Marks & company took the plunge and went all the way to Oaktree. The risk? That most people wouldn't know what business it was in. But Oaktree didn't care about most people. It only cared about specific target audiences that already knew very well who it was.

Pretty gutsy, in my book.

The subject was "what advisors do online," based on new research by kasina. In my presentation, I supplemented the kasina research with some tips for asset managers in making the shift from a "dot.com-centric world" to the "content-centric world" we're in now, where users no longer reach your content only through your home page but access it directly from a constantly changing landscape of search engines, email links, blogs, social media, RSS readers, mobile apps, content aggregators and more. I also used our new AAM site (which just happened to launch that morning) as an example of how asset managers can make their content one of the main pillars of their value proposition.

You can see the whole webcast below (it lasts about an hour). I also plan to discuss this idea of the content-centric world some more in a future post.

Unlike the headline, the article itself is well-reported and inoffensive:

The just-signed Dodd-Frank law has turned out to have a little-noticed provision that sets up mutual fund whistleblowers for a payday. The provision protects any fund firm insiders from employer retaliation and offers rewards of up to 30% of Securities and Exchange Commission sanctions to employees who report wrongdoing by their firms. Observers note that Dodd-Frank does what Sarbanes-Oxley failed to do—puts funds squarely in the cross-hairs of beefed up whistleblower provisions and incentivizes whistleblowers to act.

The success of the mutual fund industry rests almost entirely on the trust of investors, built over decades of effective regulation. In recent years, an environment of lax regulation has led to occasional scandals and financial practices (like "pay to play") that threaten to undermine that trust, but it's still there.

Investment management professionals don't talk, think or act like mafia dons. In my experience, they have the highest ethical standards in the financial industry. I would assume that most of them are glad (if disappointed in their colleagues) when shoddy practices are exposed to the light of day, even if it means paying whistleblowers to do so. I doubt very much that many mutual fund executives think of such people as "snitches."

Last weekend, the lead story in Personal Finance was "Congress Overhauls Your Portfolio." This alarming headline was followed by a blurb sure to attract the attention of those who may already be wary of the Obama administration's regulatory efforts:

Overlooked amid the thousands of pages that comprise the Dodd-Frank bill are major changes affecting mutual funds, retirement plans, single-stock investments and other holdings.

So what are these "major changes"? Do they really justify these scary alarums? Let's take a look inside...

Next come retirement plans. What does the article find? Well, it seems that the bill asks regulators to study whether stable value wrap contracts should be subject to the new rules governing derivatives. If so, that might raise the costs of stable value funds and maybe make them harder to find. If, that is, the regulators decide that way. And they have 15 months to make up their minds.

Hedge funds? Well, now they have to register with the SEC if they have $150 million in assets. That will raise some costs for smaller funds. It might make it harder for new funds to get started. And investors can no longer count the value of their primary residence toward the $1 million in net worth that makes them "accredited investors" able to invest in these funds.

Then the Journal tackles individual stocks. What do they find? A few nods toward shareholder activism, which even the author concedes are unlikely to have any practical impact, particularly on small investors.

Derivatives? "The bill should help cut risks in funds holding derivatives." That sounds pretty good to me. But to pay for this benefit, there may be some "incremental drag" on the performance of funds and ETFs using these instruments.

For brokerage accounts, the bill gives the SEC the authority to impose the same fiduciary standard on brokers as they do on financial advisors. This is one area where the bill could potentially have a major impact on your portfolio. But it doesn't...yet. First the SEC has to study the issue and report to Congress.

And the article finds a few other provisions that could affect individual investors. The SEC has the right to prohibit mandatory arbitration in brokerage disputes. (But again, the bill itself doesn't do that.) It raises the amount of FDIC deposit insurance. It makes it harder to issue phony mortgages. And it establishes new agencies to regulate consumer financial fraud and the insurance industry.

That's it? That's all the Journal could come up with? That's what they mean by "Congress overhauls your portfolio"?

Give us a break, Rupert.

It does makes you wonder, though. Could the new Murdoch-era Journal have a broader agenda? Are the political views of its editorial page starting to affect the objectivity of its news coverage? Is the fabled wall between the Journal's opinions and news beginning to crumble?

That could be the biggest news of all in this article.

Financial marketing is often neither pure B2B nor pure B2C. Sure, there are certain segments that fit cleanly on one side or the other. Retail banking and brokerage are straight consumer categories. Institutional asset management is classic business-to-business.

But most financial services — investments in particular — are delivered to consumers through intermediaries. The sales process is multi-tiered. First, a manufacturer needs to persuade an intermediary to distribute the product. Then the distributor sells it to a consumer. The end-consumer may be an influencer in the process, but rarely the decider.

We think of it as business-to-business-to-consumer, or B2B2C.

So who's the target audience? That's the tricky part. The message is usually aimed at the intermediary, who tends to be the "real" decider. But most intermediaries don't want materials they can't use with their clients. So you have to deliver messages to intermediaries in client-approved sales materials.

Sometimes it's even more complex. Take the investment-only 401(k) business. There, the sales process goes from an investment manager ("manufacturer") through a plan provider ("recordkeeper") to an employer ("plan sponsor") before it is ultimately purchased by an employee ("participant"). That makes it B2B2B2C.

Having fun yet?

The more you know about your beverage, the better it tastes. That’s why so many wineries put so much effort into wine tours and that’s why you’re much more likely to enjoy your bottle of pinot noir if it has been preceded by a short explanation from the sommelier of who the winemaker is, where they’re from and what exactly they’re doing. There’s really no way of telling how or whether any particular part of the story affects the taste, but the simple telling of the story makes an enormous difference.

Felix was talking about the incredible details you get nowadays from coffee roasters and winemakers. Not just where the grapes or coffee beans were grown, but what temperature they were picked or roasted at, how they were processed and even what they were stored in.

I guess you know where I'm heading with this. The same is true with asset management and other sophisticated products and services. How an analyst goes the extra mile to pick up a golden nugget of information. How a portfolio manager sifts through thousands of companies to find a stock that will beat the benchmark. How a chief risk officer scrutinizes every portfolio to protect investors' hard-earned savings.

Are these stories really relevant? Who knows. But they create a comfort level for the investor or advisor, and build an emotional connection between product and purchaser that forms the basis of a successful brand. As Felix says, "The more you know, the better it tastes."

Surprise. Asset managers are not only attracting a number of fans “likes” — 2,198 people “like” PIMCO on Facebook — but actual conversations are emerging.

Now I see that, when done right, any company can insert itself almost seamlessly into your Facebook flow.

From there, it’s not too hard to picture an asset manager on the retail end of things getting some conversations started…

But institutional die-hards PIMCO?

I salute their vision. Who knew that enough people on Facebook would want to think about something greater than matching pop icons to their yearbook quotes? It makes me like Facebook more — not only as a marketer, but as a user. It might still be bar conversation but the establishment just got a little more upscale.

Enter the doppelganger.

The new “community” pages on Facebook are created by an algorithm that searches for “topics and experiences” being discussed on Facebook. Yoga has a page. Wichita, Kansas has a page but it’s not as popular as yoga. Even Satan has a page but he’s not as popular as yoga or Wichita.

The algorithm is pretty smart. It will pull an image (an aerial shot of Wichita, a nice headshot of Kurt Vonnegut), a description from Wikipedia, and comments from Facebook about the subject. The geek in me loves this data reef organically emerging. But if I were Putnam Investments I might not be so enthusiastic.

When I started my survey of asset managers on social networks in March, Putnam’s Facebook page came up quickly in a Facebook search.

Obviously they had put some work into it.

But in May, a Facebook search yielded this result:

Which leads to this:

Putnam’s neatly planned and manicured Facebook page still exists, but a slightly woolier and certainly less predictable cousin has leaped in front of anyone who doesn’t already officially “like” Putnam. Not a very nice “thank you for shopping Facebook, Corporate America,” if you ask me.

I predict that Facebook will fix this and at least turn the roadsigns back in the logical direction of the most-liked pages. Then the early adopters can regain control of their Facebook conversation. But what about those companies who are hesitating to jump into the social media pool? Just take a look at the default Goldman Sachs’ page.

The conversation’s been going on for a while. Except now there’s a nice, branded room to have it in. What’s a company to do? I think that for the moment, there’s no fighting the tide. It might be time to jump in and swim.