The investment trust industry is having something of an existential crisis. Once the dignified stalwarts of the City of London — steady, conservative, quietly compounding wealth for generations — trusts are now watching their capital seep away while their investors scroll through TikTok tutorials on how to buy Bitcoin or trade ETFs.
At a recent panel hosted at the London Stock Exchange, aptly titled The Missing Lever, industry leaders warned that the sector’s long-favoured marketing approach — polite brochures and PowerPoint decks for intermediaries — is no longer fit for purpose. Eight more trusts have disappeared in recent months through mergers or wind-ups. Buybacks are eating into fee income, assets are shrinking, and the competition for investor attention has never been fiercer.
“We’ve seen huge amounts of buybacks, ongoing consolidation, and the sector shrinking,” said Joe Winkley, head of investment trusts at Winterflood Securities. “Since filming of a recent industry documentary just months ago, we’ve already lost eight trusts. That tells you everything about the pace of change.”
The invisible end of the investment industry
The problem, as Winkley and others pointed out, is visibility. Investment trusts barely exist in the digital spaces where younger investors live. “I searched for ‘investment trust’ on TikTok and found literally nothing relevant to our sector,” Winkley said, a statement that ought to haunt every boardroom in the City.
By contrast, newer players are exploiting these channels with ruthless efficiency. F&C Investment Trust [LON:FCIT] has begun experimenting with TikTok, Instagram, and even influencer collaborations, alongside its television campaigns. These early adopters, the panel suggested, are quietly building a long-term advantage over their more reserved peers.
Rita Dhut, FTSE 250 chair and non-executive director, argued that marketing must now be “always on” and integrated throughout the organisation. “The portfolio managers are actively engaged in helping us think about hooks for stories,” she said. “Everyone is engaged in building trust through consistent messaging.”
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Lessons for investment trusts from consumer brands
If the industry needs inspiration, it should look beyond financial services. The panellists pointed to Revolut’s data-driven customer acquisition and the National Trust’s success in winning over younger members through emotional connection and clear values. “I’m a big believer in stealing good ideas from other people,” Dhut said cheerfully. “We don’t have to reinvent the wheel; we have successful examples elsewhere.”
Transparency, too, is part of the modern playbook. Lucy Walker, chair of Aurora UK Alpha, warned against going quiet when performance dips: “The worst thing you can do is reduce communication when things get tough. Be extremely transparent — maybe even more so — because investment mistakes happen.”
A recurring question was whether individual marketing efforts are enough, or if the industry needs a coordinated campaign to revive its collective brand. While large firms might gain most from sector-wide promotion, Winkley insisted that everyone would benefit: “We have a really good product that stacks up well against open-ended funds. We shouldn’t be defensive about it.”
Practical advice followed: identify your target market through data, conduct a “digital audit” (“Put your trust into ChatGPT and see what comes out,” Dhut quipped), and be clear about positioning before spending a penny on campaigns.
Retail flows, the panel noted, are showing tentative signs of recovery. But momentum is fragile. The trusts that embrace modern, data-driven marketing, and learn to speak the language of the digital investor, could emerge stronger. Those that don’t may quietly fade away, remembered only by their discount charts.
For an industry built on patience and prudence, the hardest lesson may be this: in the age of algorithms, modesty is no longer a virtue.
