Asset Management: The Least Client-Centric Brands in Financial Services?

A study from strategy consultants Gulland Padfield looks at the poor state of branding and messaging in the Institutional Asset Management industry and the opportunity leading brands now have to align their proposition to the needs of their clients and customers.
“For years, many Asset Management firms have wrestled unsuccessfully with the issue of brand definition”, says James Phillips, partner at Gulland Padfield and co-author of the report. “There are two main reasons for this. Firstly, many large Asset Management firms are in fact three businesses: a retail franchise, a wholesale business and an asset manager to institutions. From the start these businesses struggle to describe and align what they do to three related but different markets with often conflicting needs. It’s a huge challenge. Secondly, others firms are almost completely un-branded with no message. They tend to rely instead on promoting a series of facts and statistics, usually about their organization or its investment performance. There’s a huge opportunity for institutions to address both these challenges and strengthen customer loyalty and client acquisition as a result. In our study, we see a growing divide between firms which are getting ‘brand’ right and those which clearly are not.”
What’s the challenge?
Gulland Padfield’s report focuses on a number of the leading asset management firms. Many have weakly-defined and even un-client centric brands and market messaging. Why is this? The Report identifies six possible reasons:
1. The wrong message focus. There is a very strongly held view inside the Asset Management sector that ‘it’s all about investment performance’ and that ‘the numbers speak for themselves’. As a result, brand and messaging has been an area largely underappreciated by many AM firms. While it’s true to say that no asset management firm lasts long if it consistently underperforms, building a brand around ‘beating the market’ in a world where doing so is increasingly difficult and where promises to do so are treated with increasing scepticism by clients, means that you are building your brand on weak foundations if you focus your brand message mainly on investment performance.
2. They emphasise capabilities over the benefits and impact. Our study shows that many firms continue to focus their positioning around their capabilities, products, solutions or size. Others place a particular emphasis on the depth of their investment talent and collaborative approach to managing portfolios. Great. But the majority failed to answer the clearest question in every client’s mind, namely, ‘What is the positive impact that delivers for me?’ A better brand strategy will help to articulate the benefits not just the features of the AM firm or its performance.
3. An under-appreciation of what brand and market messaging can do in the bad times. By creating a stronger attachment to the institutional brand, AM firms can help protect the value of their own business during periods of under-performance and uncertainty.
4. Lack of client data and insights on which to build a brand message. Any brand is only as strong as the understanding it has of the needs of its clients. Many Asset Management firms usually have a very poor understanding of Institutional or high net worth relationships, and do an imperfect job of asking client the right questions which can help them shape a brand and market message strategy supportive of the franchise.
5. Complex route-to-market channels. Unlike those financial services brands which are exclusively focused on retail customers, Asset Management firms have to interface in a much more complex environment. Sometimes their relationships are direct with the end investor. At other times, they are indirect through investment consultants on behalf of an institutional investor or through wholesale channels to financial advisors. This diverse focus makes brand strategy very challenging.
6. AM brands have been too dependent on individual star managers. Recent departures of high profile individuals from leading firms, only continue to illustrate the challenges firms face in balancing an individual’s importance to the franchise, with the value of the institutional brand. Getting that balance right is a chronically unresolved challenge for the industry. A stronger institutional brand helps smooth the impact of star managers arriving or leaving the firm.
How are the best performing brands building their market profile and recognition?
To read more and view some of the strategies identifies in the Report, please download the PDF document.