In late September, the Investment Adviser Association’s (IAA) Active Managers Council Thought Leadership Task Force hosted an insightful in-person meeting to discuss how to effectively advocate for active management in today’s investment landscape. The two-hour meeting brought to light a variety of key themes that highlight both the challenges and opportunities facing active managers. Below are the core takeaways from the meeting:

One of the primary themes identified was the need for continued education on the value of active management. With the rise of passive investing, it’s crucial for active managers to make their case through clear, accessible education. The media often leans heavily towards passive investing, thereby potentially skewing public perception. As such, it’s vital for active managers to serve as neutrality advocates, demonstrating how active strategies work together with passive investments to help investors reach their goals.

Active managers must work to amplify their message. Amplification through media channels, investor outreach, and communication platforms is key to staying competitive.

Providing thought leadership drawing from academic research can provide credibility to the case for active management. By leveraging studies and research conducted by experts in the field, active managers can back up their claims with data and insights.

The meeting also highlighted key trends, such as growing individualization of portfolios. As investors seek more personalized strategies tailored to their specific needs and risk profiles, active managers have an opportunity to provide customized solutions. Additionally, alternatives, such as private equity or hedge funds, are becoming more popular, offering another avenue where active management can demonstrate its value.

There is also a need for more basic education around the difference between the investment vehicle (mutual fund, ETF, private fund, etc.) and the strategy (active or passive). Helping investors understand the distinctions between the structure of an investment and the underlying approach will be crucial for active managers going forward.

Many participants noting the ongoing perpetuation of the myth that passive carries little risk or less risk than active.  The Council should continue to educate the public that all investing involves risk.  Risk management remains a key differentiator for active managers, especially in an unpredictable market environment.

Attendees were highly engaged, emphasizing the need to champion investor choice. With opportunities in education, amplified messaging, and thought leadership, combined with the growing demand for personalization and long-term focus, today’s active managers are perfectly positioned to advocate for their strategies and make a lasting impact.