Successful brand messaging in financial services takes more than just focusing on the investing process
Before institutional investors turn over millions — and sometimes billions — of dollars to an asset manager, they want to know how their money is going to be invested. It’s not a question of which equities or bonds or alternatives the manager prefers. That’s easy enough to determine by looking at their current portfolios. What’s important to know is the manager’s process (sometimes referred to as approach or philosophy) – the guiding principles that underpin all investing decisions.
Process Does Rank High
In our brand strategy work for asset management companies, we’re often asked to create a brand around our client’s process. The general feeling behind the request is that a manager’s investing process is what differentiates it from others in its category. And there’s no doubt that investors want to understand this. In a research study we conducted on the role of brand in asset management, we learned that institutional investors rank process as the most important decision criteria – ahead of team stability and even performance track record! This makes sense: a firm’s process endures (or should endure) even as its employees come and go, and it can sustain a firm when performance lags, as it inevitably will.
Building on a Higher Sense of Brand Purpose and Belief
But process is really a building block of a brand, not the brand itself. It’s a support point for something bigger. Consider the $27 billion (AUM) asset manager we rebranded a few years back. The firm’s founder and CEO had a very distinct investment philosophy based on the concept of shareholder yield (vs. traditional accounting-based measures of value); he’d even written a widely read book on the subject. But his philosophy wasn’t the brand. In fact, employees of the firm struggled to articulate the philosophy in a way that resonated with prospective investors. It wasn’t just a question of finding a pithy way to summarize a book-length argument; it was about demonstrating what the philosophy laddered up to, a higher sense of brand purpose and belief.
Following extensive research with clients, we captured this higher purpose in three simple but powerful words: Vision to Value. The brand drives home the idea the firm has more than a unique process; it has a unique vision on how to value equities that inspires everyone at the firm and informs every decision they make. Activated on the firm’s website and in pitch books and content, the brand helped propel significant growth in AUM in the two years following launch.
Audience-based Messaging is Critical
To be sure, while process isn’t synonymous with a brand, it should play a starring role in a firm’s messaging. One of the important findings from the research study cited earlier was that asset managers significantly overrate their success in communicating a differentiated process or philosophy. Messaging is an opportunity to support the brand with specific points about the process – and to tailor them to specific audiences.
While a manager may have one fixed process, the interests and needs of audiences can vary significantly, and brand messaging needs to be adjusted appropriately. And for asset managers with multiples strategies, each with its own distinct process, messaging is a way to make the overarching brand relevant to specific offerings.
We recently rebranded a global natural resources asset manager with two distinct target investor groups: those focused exclusively on total return, and those with a keen interest in sustainable, responsible investing. Our client’s investment process, as reflected in its brand, is constant across all communications and all audiences. But its messaging, which devolves directly from the brand, explicitly addresses the interests and concerns of these two specific audiences.
Even traditional equity investors can be segmented in ways that impact how a brand should be messaged. Depending on the specific interests of an investor, messaging can dial up risk management, team tenure, reporting policies, technology or even values like transparency and trust. The key is developing a message “map” that makes the brand relevant to each audience and their interests.
An asset manager’s process isn’t its brand. But it’s almost always a strong pillar of the brand, supporting a higher purpose, a bigger idea. The proper channel for communicating process is in messaging, those strong, audience-targeted statements that cascade down from an overarching brand.
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