There is a dichotomy that has developed between the advertising spend on investment products and the rate of returns investors are earning. Based on the numbers, clients are not the ones benefiting by their fund managers utilizing collected fees on advertising spend.
Investments Advertising Spend up 9.9%:
Spending on advertising is up in 2010 as asset managers like Fidelity Investments, Franklin Resources Inc and Janus Capital Group try to lure back investors. According to Lipper data, through July 2010 the average diversified U.S. equity fund was down 6 percent over three years, and was essentially flat over five years.
In contrast, New York researcher Competitrack Inc. estimated that all advertising pertaining to investment products totaled $1.4 billion in 2007 and 2008, then fell 35 percent in 2009 to around $910 million. So far in 2010, investment product advertising spend is on track to rebound to just over $1 billion this year or an increase of 9.9%.
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