Branding in Asset Management

I’m not sure what prompted it but I recently spent an enjoyable hour discussing how branding of asset managers has evolved over the course of my career. And I thought it was sufficiently interesting to consider it a bit further.

It seems to me that companies spent more on overt branding – billboards, media copy, marketing events – fifteen years ago than they do today. I can barely remember the last time I saw an asset manager advertisement on the underground. Why is that? Consider that an asset manager generally needs to appeal to different constituencies: retail customers (the ‘end’ clients); wholesale businesses (from one-person IFAs to multi-disciplinary wealth managers); and traditional institutions (particularly pension and sovereign wealth funds).

I would suggest that, in today’s environment, retail customers are generally less attracted to a brand name as they have become more reliant on the ‘guidance’ provided by the platform (and, where appropriate, their adviser) through which they own their funds. At the opposite end of the scale, institutional investors have become more professional.  So there is a lessening requirement for brand name recognition. Let me be clear: I think this is a good thing. I tend to inwardly wince when a fund manager representative describes the substantial marketing budget they have been awarded to improve the name recognition of their company. Indeed if I conducted research outside of the principal locations for asset managers, I suspect 99% of individuals could not name any of the three largest asset managers in the world. I fondly recall an colleague at my former employer Fidelity informing me that people were more likely to associate the company with hi-fi than investments.

Hi-Fi – now I am really showing my age!

At the same time, asset managers have become more focused on better communication of culture, ethics and philosophy. That is a different and, in my opinion, more effective form of brand development. Some continue to rely on strategy performance to create initial engagement as if it can simply be repeated going forward. Thus when a manager underperforms (as they are sure to do over an investment cycle), it is harder to re-position the brand message than if the philosophy, etc was simply set out in the first instance.

But I would observe – and I consider this is definitely a positive – that in broad terms, there is more attention paid to client-centricity, which makes engagement more fulfilling and worthwhile. I find more managers better able to talk about the books they read, they people whose opinions they respect and the manner in which they validate and re-test their ideas. When that is accompanied by transparency, hunger and humility, my ears prick up. The Signal as opposed to the Noise.

The investment industry will always evolve and that is one of its continuing attractions. So long as that evolution is even better focused on the client, then brand development as a part of its future-proofing is assured.