Most investment trust marketing is built on a reasonable-sounding assumption: give investors clear information about strategy, performance, fees, and governance, and they will make rational decisions.
The assumption is wrong.
Not because investors are irrational, but because of how human decision-making actually works. The behavioural science is not new. Daniel Kahneman’s research, distilled in Thinking Fast and Slow, describes two systems of thought. System 2 is conscious, analytic, slow, and deliberate. System 1 is intuitive, automatic, rapid, and effortless. System 1 dominates in over 90% of all human decisions, including, according to Kahneman, decisions where System 2 thinking would seem more appropriate. Decisions are made in System 1 and justified in System 2. The justification comes after the decision, not before.
Investment trust communications are almost entirely designed for System 2. The consequence is that the rational case for a fund is being made to the part of the brain that isn’t driving the outcome.
Blueprint Session #2, held in November 2025, addressed what this means in practice: for how investment trusts communicate with retail investors, how PR shapes the environment in which investment decisions are made, and how the culture of an asset manager is becoming both a governance requirement and a communications asset.
The Science Behind the Behaviour
Hub’s session introduced behavioural science not as a theoretical framework but as a practical design toolkit. Four biases are directly relevant to how retail investors make investment decisions, and each one points to a specific change in how investment trusts should communicate.
Social proof is the first. When decisions are complex or unfamiliar, people copy the behaviour of others they trust. Investing is high-stakes and uncertain. Retail investors are looking for signals that a fund is trusted, used, or endorsed by people like them. The nudge that follows from this is specific: use credibility cues that show momentum and adoption. Long-term shareholder perspectives as authentic reassurance. Simple proof points like years of consistent dividend growth. Faces in advertising, not just logos and charts. When Aperol became ubiquitous in UK bars, it wasn’t because of a rational campaign about ingredients. It was because seeing everyone else order one made ordering one feel like the obvious, easy choice.
Loss aversion is the second. People feel losses roughly twice as strongly as equivalent gains. The fear of losing money has more impact than the potential to make money. Most investment marketing leads with return potential. Behavioural science suggests the more powerful frame is the cost of inaction: what staying in cash during inflation actually costs over five years, what missing a decade of dividend compounding means in income terms. The Got Milk campaign is the reference point here. Rather than communicating how good life is with milk, it focused on how frustrating, how specifically annoying, life is without it. Loss-framed messaging consistently drives stronger engagement than performance-led campaigns alone.
The Von Restorff Effect is the third. People remember what stands out, not what blends in. When options look similar, the brain defaults to the easiest to remember. Investment trust marketing is, by any honest assessment, largely homogenous: similar colour palettes anchored to financial services blues, similar performance charts, similar language about long-term growth and experienced management teams. Distinctiveness reduces cognitive effort and increases recall at the moment of choice. One organising idea. Consistent colours, shapes, and phrases across every touchpoint. A brand identity that makes the trust recognisable without a logo.
The Pratfall Effect is the fourth. People trust organisations more when they admit a controlled flaw. Imperfection signals honesty and reduces scepticism. Financial services communications almost universally lead with strengths, which produces communications that feel polished, complete, and not entirely believable. The Guinness Surfer campaign was built on exactly this principle: the brief said never to mention the slow pour because it might put lager drinkers off. The creative team disagreed and wrote “Good things come to those who wait.” The campaign produced a 12% increase in UK sales and is widely cited as one of the most effective TV advertising campaigns ever made. For investment trusts, the Pratfall Effect means chair’s letters that acknowledge difficult periods, honest commentary on what went wrong and why, and the recognition that a trust is not right for everyone. Honesty increases credibility. It makes the strengths that follow more believable, not less.
The practical framework that follows from all four runs in five steps. Make clarity the default: plain English on strategy, gearing, dividends, and portfolio decisions. Build distinctiveness with discipline: a clear value proposition, memorable brand assets, and consistent memory structures protected by the board over years. Use transparency to build trust: honest commentary, especially in tough periods. Shift to an always-on content system: not just campaigns but continuous nudges across the year that build familiarity, and familiarity builds trust, and trust drives inflows. Design behavioural journeys, not just campaigns: a clear first step, frictionless flow, timely prompts, and proof at each stage.
The opportunity is not to push harder. It’s to design better.
Culture as a Governance Asset
City Hive’s session introduced the ACT Corporate Culture Standard, and the argument it made for investment trust boards was direct: culture is no longer a soft story that asset managers tell to round out their credentials. It is becoming a hard governance requirement.
The context is specific. The UK Corporate Governance Code (2024), the AIC Code (2024), and FCA Consumer Duty all now expect boards to demonstrate cultural awareness as part of effective oversight. Institutional investors are going beyond product-level assessment to consider the entire company ecosystem. Culture and diversity have become a standalone pillar of client due diligence, alongside other ESG factors. For boards operating at the intersection of governance, stewardship, and accountability, understanding the culture of the asset manager they delegate shareholder capital to is now part of the role.
ACT is a disclosure framework developed with and for the investment industry. It provides a standardised way for investment companies to understand, create, and progress cultural change, and to communicate that progress effectively. The framework operates across three pillars: purpose, vision, and values; accountability and disclosure; and investing in and valuing people. Within each pillar, the structure moves through Action, which sets out the firm’s intentions and commitments; Challenge, which provides a framework to assess delivery against those objectives and identify gaps between intent and output; and Transparency, which covers the mechanisms to demonstrate achievements and progress to the right people.
The adoption numbers from the session put scale behind the argument. 220 or more asset managers have now been requested to report against ACT by professional fund investors. 36 public signatories are in the framework. 13 ACT signatory firms manage 49 investment trusts totalling £30 billion in assets. The ACT Stewardship Council, whose members collectively manage over £2 trillion, includes CIOs, Heads of Manager Research, and fund gatekeepers from Cazenove, Evelyn Partners, Hargreaves Lansdown, Omnis Investments, Rathbones, Square Mile, and St James’s Place.
For investment trust boards, the practical implication is straightforward: understanding the culture of your asset manager is increasingly both a regulatory expectation and a risk management tool. Boards that can demonstrate cultural oversight are better placed with investors, regulators, and the market. Those that cannot face a question they will be asked more often and more formally as the framework matures.
PR Is How Discounts Narrow
Quill’s session opened with a structural argument that the room found difficult to dismiss. Investment trusts’ closed-ended structure makes them uniquely vulnerable to perception-driven discount volatility. The discount to NAV is not just a function of performance or interest rates. It is a function of how well understood, how trusted, and how well communicated the trust is across every part of its potential investor base. Strategic PR is therefore not an optional communications exercise. It is a direct input to discount management, stakeholder confidence, capital raise capability, and competitive differentiation.
The challenges the sector faces are not new but have converged in a specific way. The rate reset has altered investor psychology by making cash a viable alternative for the first time in over a decade. Distribution consolidation has produced centralised model portfolios tilted towards scale and liquidity, leaving specialist closed-ended funds outside many templates. Platform intermediation has created crowded shelves where trusts without active promotion risk invisibility. Regulatory disclosures under MiFID II and PRIIPs made trusts appear more expensive than they truly are, discouraging intermediaries. And the awareness gap remains structural: retail investors at the pub with friends, as Quill put it directly in the session, have largely never heard of investment trusts. That is a fundamental issue.
Good strategic PR addresses this across four areas. Building awareness and understanding: explaining what the trust is, how it works, and why the closed-ended structure creates specific advantages, in language that reduces rather than compounds complexity. Investor relations and stakeholder communication: regular, clear communication to shareholders, platforms, and advisers that builds loyalty, reduces volatility driven by rumour or surprise, and encourages long-term holding. Crisis management: coherent, timely, transparent messaging when there is adverse performance, regulatory issues, or external shocks, to prevent reputation damage and maintain confidence. Trust and credibility: transparency around performance and decisions, third-party validation through awards, analyst coverage, and media presence, and the kind of proactive engagement that reduces information asymmetry and improves market sentiment.
The before-and-after contrast is stark. Before sustained PR activity: low mainstream visibility, complex concepts that intimidate retail investors, costs that appear high due to regulatory disclosure framing, and weak brand presence. After: media coverage and thought leadership, clear and relatable messaging, costs contextualised, and strong storytelling across digital and traditional channels. The distance between those two positions is largely a communications problem. And communications problems have communications solutions.
Three Questions Worth Asking
The three sessions converged on a practical framing. Before a trust can claim to be communicating effectively with the full range of investors it needs to reach, three questions need honest answers.
Are you designing communications for the brain that actually makes investment decisions? Most investment trust marketing addresses the rational mind. System 1, the intuitive, emotional, fast-thinking part of the brain that determines familiarity, trust, and recall, is largely left to chance. What signals are you sending, deliberately, to that part of the investor’s mind?
Is your board treating culture as a governance asset? Culture assessments, ACT disclosure, and the ability to demonstrate how the firm managing shareholder capital is built to operate with integrity and resilience are becoming part of what institutional investors, platforms, and regulators expect to see. What evidence can you produce?
Is your PR strategy working on discount management, not just communications? Consistent, proactive media presence, expert commentary, and investor relations activity across retail and institutional audiences are what separate trusts that manage perception from those that are managed by it. Which side of that line are you on?
The investment trust sector has genuine structural advantages. Permanent capital, independent boards, the ability to hold illiquid assets, dividend reserves: these are real differentiators. The sector’s challenge is not its product. It is the distance between what investment trusts are and what most of the retail market understands them to be. That distance is closed not by performance alone, but by sustained, well-designed communication.
This session builds on Session #1’s case for storytelling: Investment Trust Storytelling: Why the Sector Needs a Better Narrative. Session #3 continues the thread by tracing where these dynamics play out across the investor journey: The Investor Journey Investment Trusts Are Getting Wrong. And the Von Restorff effect covered above, remembering what stands out, is explored further in Session #4: Attention Is the Investment Trust Sector’s Most Undervalued Asset, which applies the Ehrenberg-Bass Institute’s work on distinctive brand assets to the sector.
The Blueprint Sessions bring together investment trust marketing and communications professionals to work through these questions properly.
If you’d like to be considered for an invitation to the next session, please contact us.
