2003, markets are turning much tougher. There has never been a
better time to win client trust and confidence through a strong
global wealth brand.
The wealth management industry is increasingly becoming aware of
the need to establish a strong brand image with clients. That
represents a sea-change for much of the industry, which has long
relied upon inheritors of family wealth continuing to use their
services through the generations; meaning more traditional
marketing has been neglected in favour of word-of-mouth and
personal recommendations.
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Indeed, traditionally wealth managers have prided themselves on
discretion and maintaining a low profile. Once it was sufficient to
simply offer secrecy and security, but as the majority of wealth is
now self-made and internationally mobile, new approaches are
required.
And competitive overlap also argues for the creation of a stand-out
brand. Lack of distinction between private banks, asset managers,
hedge funds, financial advisers, insurers and others as they move
into each other’s space compounds the issue and creates a further
marketing challenge.
In addition, there continues to be huge fragmentation in the
industry with the largest firms retaining only 3 or 4 percent of
total assets under management. An added complication in gaining
market share is that for reasons of security and privacy,
ultra-high net worth individuals are often multi-banked and might
have substantial funds with each of a number of different private
banks and wealth managers.
As competition for clients grows, many industry players have begun
using new marketing techniques in order to raise awareness of their
existence and communicate the benefits of their services to a new
audience, particularly among those building global franchises which
often involve the emerging economies of Asia, according to a new
research report.*
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By GlobalDataFrom 2005 to 2007 the amount spent on branding by private banks
grew, with over 29 percent of the organisations surveyed by
PricewaterhouseCoopers in its biennial Global Private
Banking/Wealth Management Survey spending more than $1
million.
Private banking chief executives surveyed in the survey regarded
brand value as “the most important differentiator for their
organisations”; 93 percent of those surveyed saw brand value as
either an important or very important tool in attracting new
clients placing it above personal relationships and the quality of
professional advice in order of priority.
But despite growing brand investment, there is still all to play
for. For this rising expenditure has yet to effectively crystallise
“breakaway brands”.
Investment in branding and corporate image is still relatively poor
compared to other businesses and attempts to leverage its power,
largely unsuccessful. And as the subprime crisis may be teaching
us, while building a trusted brand often takes many years, not all
of the factors that contribute to a successful brand are completely
within a firm’s control.
While a powerful brand might draw clients towards a firm, rather
than require them to be singled out and targeted by more specific
marketing, a firm’s image and brand can also be shaken by factors
outside its immediate control.
“Clients’ opinions can be damaged by factors that are completely
outside the control of anyone within the private bank itself, such
as mistakes by a separate credit card division or by an external
custodian,” says Alison Petit, marketing director at Rothschilds.
“Nevertheless, a professional private bank needs to recognise it is
accountable for these mistakes, as they will influence the client’s
perception of the brand.”
Branding today is a complex, sometimes intangible phenomenon and
certainly more than just logos and visual identity. A successful
brand is inextricably tied up with reputation and whereas a strong
and powerful brand can take years to build, it can quickly be
destroyed.
As major private banks in the US and Europe deal with the taint to
their brands and reputation caused by the billions of dollars of
exposure to US subprime mortgage obligations written off, the need
to preserve brand at all costs is no doubt going to prove a
hard-won lesson. <
* Creating a Private Banking Superbrand, published by VRL
KnowledgeBank. Visit http://www.vrl-financial-news.com/ to
order a copy.
