Financial services get glammed up

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Financial services firms have long been a laughing stock among the broader business community when it comes to their image-building efforts, but this could be about to change.

“Successful businesses need successful brands and what is behind them is a strong sense of self,” says Jim Prior, chief executive of The Partners, the consultancy who has worked to boost the image of names including Ford, Nike and UBS.

“But financial services brand names do not carry a lot of weight and offer little or no proposition,” he says.

The approach to branding varies according to size, history and distribution channel. But few asset and wealth managers have considered how best to portray themselves to customers. Most have stumbled when it comes to defining values and showing empathy with their clients.

Ask them what they are and finance houses will generally tell you what they are not. “We are not a cheap supermarket where you have to buy what we are selling today,” says the chief executive of a London firm with around £5bn under management. Working out what you actually do believe – and how to communicate it to clients – takes a bit more vision and guts.

But the bigger organisations are increasingly being forced to define themselves. Global wealth managers such as UBS, HSBC, Credit Suisse and Citi all practice the “one bank” approach. This means that if there are problems in the investment bank due to poorly thought-out trades, fraud or lack of risk management, there is a strong possibility of brand “contamination” into the private-banking channel.

Wealthy clients – most of whom divide their faith between three or four private-banking providers – can be quick to switch to safer names until the dust settles. UBS clients, for instance, withdrew billions soon after the crisis started in 2008.

Citi is enjoying improved fortunes, with a “major uptick” in client acquisition over the past six months, according to Luigi Pigorini, its private banking chief executive. Branding has played a big part, with the US group emphasising stability, the ability to conduct global research, and availability of institutional-style solutions for private clients.

“Clients have been uncomfortable with some of the names out there, regarding stability issues,” says Mr Pigorini. Five years ago, Citi was at the receiving end of similar bad publicity, after having to ask the US authorities for a humiliating bailout. “Now we are at the opposite end and it feels very good.”

Key to the branding issue is recognising the problem and knowing how to react. The recent era of heightened market volatility, for example, has left sales staff at most large asset houses edgy and made them lose sight of the bigger picture.

“Two years ago, I had to sit my team down and tell them to stop worrying about the market going down,” recalls Alex Hoctor-Duncan, head of European retail business at BlackRock.

“I told them to concentrate on the long-term conversation with clients, not on which products you can shift today.”

Imposing a brand, he realised, was not about a short-term tussle with benchmarks, but about clear communication with clients about the consistency of returns that can be achieved.

Veteran consultant Diana Mackay is left totally exasperated with the industry she serves. Year after year, she makes an impassioned address on branding to the annual Fund Forum in Monaco. But despite long ovations, behaviour is changing only slowly. “Fund managers are nearly all inclined to see themselves in terms of products,” sighs Ms Mackay. “Few think about what they can actually deliver to the client.”

But a small coterie of wealth managers is beginning to improve the client experience through branding. Quirky UK wealth manager 7IM, which recently clocked up £5bn in client assets, is busy exploring the “gamification” of financial services communication. It has even brought in the team behind big-selling computer games Donkey Kong and Goldeneye to jazz up its web portal with the type of interactive graphics not usually associated with the staid financial industry.

Among such mavericks there is a disdain for old-school houses that rely on traditional branding around ancient dates and crests.

But traditional, family-led private banks such as Neuflize in France, which traces its origins back to 1667 and C. Hoare & Co, based in London’s Fleet Street and founded in 1672, are just beginning to raise their heads above the parapet and communicate their brands to the broader community.

Both report clients defecting from modern, big-brand groups, in search of traditional, personal service and a more flexible approach to investments.

Asked to define the brand of her employer, Annamaria Koerling, Hoare’s head of wealth management, summarises the old-fashioned boutique’s appeal in a single sentence: “Hoare & Co looks a bit like the bank from Mary Poppins, but with modern service.”


Yuri Bender is editor-in-chief of Professional Wealth Management

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