Why does brand
matter for investment
managers?

Posted in Brand, Reporting on 3 September 2014 By Philip Franklin, Client Services Director

That “brand” thing

As someone who has been on both sides of the agency-client fence, it’s my experience that talking about “brand” with investment management groups of different shapes and sizes more often than not incites a rapid furrowing of brows or glazing of the eyes…sometimes just an awkward silence.

This is usually followed by an overwhelming sense we need to move the conversation on from this ineffable ‘thing’ called “brand” and start talking about the designs we’re going to produce and what they want them to look like. Generally speaking, these companies are much more comfortable talking about solid, practical outputs rather than the hard-to-grasp concept of “brand” and most especially “brand strategy”.

Of course I’m exaggerating for effect here but perhaps not quite as much as you might imagine! I’ve attended far too many meetings where the assumption is that brand equals logo, equals visual representation of the firm, equals advertising, equals marketing, which equals cost rather than value. In other words, branding is perceived to be a broadly cosmetic exercise; a necessity with no discernible return in a sector where “return” is everything.

...with brands, as with so many things in life, it's the experience that counts.

I find it a little alarming that in 2014, some six years after staring-down a virtual financial apocalypse, quite so many firms still seem unable or unwilling to connect their brand to their strategy, their performance and, indeed, to their clients. Too many firms are still failing to appreciate fully that their brand is their business which is ultimately everything important about them. It’s the lens through which their clients, competitors, the media and marketplace view them. Brand creates value and drives profit. It’s just as much a business tool for the investment management sector as for any other.

Any colour, so long as it’s blue

So how do I know that brand is not highly valued by investment managers? Well it’s partly anecdotal based on meetings and my own experiences as a senior manager in a number of asset management firms. It’s also based on looking both objectively and holistically at the brand landscape for investment managers and seeing…well, actually not seeing much difference or distinctiveness at all. Every investment management group I have ever worked for or met believes that they have an absolutely unique proposition and something that is truly differentiated from their peers and competitors. How is the uniqueness and difference communicated to their stakeholders? Most often through clichéd messaging that highlights obvious attributes such as: commitment; integrity; transparency; experience; bespoke solutions; performance. These are not differentiating factors, just the shared qualities and values of the sector. No-one will invest with a manager that does not have all or most of these features. They don’t differentiate - they associate. They don’t define - they confuse. And the clichés continue into visual languages which so often lack real presence, creativity and depth (and, yes, blue is the dominant colour but that’s another story…).

immersion, insight and discovery

Let’s take “performance” as an example. Investment managers understand performance; it’s what the business is about after all. But would they want to be judged solely on performance? Would they want investors to make decisions solely based on the latest performance ranking tables? Would they actually want their products, the result of huge amounts of research, analysis and intellectual firepower to be commoditised? Of course not, they want to build long-term relationships with their investors. They want their investors to understand the decisions they make, why they make them and why, sometimes, they may have a negative impact on performance.

Performance matters but it’s not the only thing that matters. Reputation, trust, philosophy and vision, matter just as much. As my colleague, David Hunt, said so appositely in another article “…with brands, as with so many things in life, it’s the experience that counts”. These and other attributes are most effectively communicated through a strong coherent brand. Beyond the numbers and the clichés, investment managers need to build emotional relationships with their clients. This is, after all, how most firms got started, partnering with stakeholders who truly believed in what they were doing and were emotionally attached. This is how it still works at a micro level, key people building relationships with institutions and individuals based on much more than just data. At this level, the brand is communicated intimately and effectively - the real values and personality of the firm, the authentically unique characteristics. This face-to-face communication needs to be supported by a top level brand strategy that provides consistency, clarity and true differentiation.

Risk – what risk?

Of course it’s not always easy to get to the real heart of a business; it takes time and effort to understand what’s really going on, what are the drivers, where is the innovation, what sets it apart? In our Brand Thinking Programme we talk about “immersion, insight and discovery”. This is the foundation on which everything authentically creative will be built. Through a structured and logical process it’s possible to get beyond subjectivity and start to draw out the characteristics of those face-to-face relationships, experiences and interactions to inform, create and drive a brand that does stand out, that speaks to its clients and, most critically, impels performance.

risk comes from not knowing what you're doing

Without the rigour that such a process brings, creative work is fraught with risk and uncertainty - two concepts investment managers understand particularly well! Warren Buffet points out in his typically laconic style that “risk comes from not knowing what you’re doing”, the same rules apply to your brand as to your business. High quality research and analysis should inform every stage of a brand process, so it must always be strong, substantive and sustainable. There has to be clear line of sight from the final creative work (whatever form it takes) back to initial “discoveries”. To be valid and valuable, the process must include both internal and external stakeholders. More often than not, an understanding of true difference comes from the outside - so limiting your audiences to just internal participants will mean missing valuable insights.


Being different

The only way to ensure that more firms don’t keep repeating bland, undifferentiated messages and a “me too” visual language is to understand, as well as respect, the importance and role of brand in providing a rich and diverse platform for communication. Financial services and investment management in particular is a fiercely competitive environment. If 2008 proved nothing else, it certainly demonstrated the case for avoiding the “herd instinct”. That’s as true for creating powerful and effective brands as it is for creating successful long-term investments.

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