A panel of fund management brand experts discusses social media, the relationship between brand and fund flows, and the challenges of covering multiple client bases in different markets. Chaired by Nick Fitzpatrick.
Alain Berry, Global head communications and brand, Amundi
James Cardew, Global head of marketing, Schroders
Diana Mackay, Chief executive, Fund Buyer Focus
Joseph Pinto, Global chief operating officer, AXA Investment Managers
Rob Sanders, Head of group marketing, Aberdeen Asset Management
Neville Vyas, Director, head of UK marketing, Allianz Global Investors
Funds Europe: Fund management companies have to target two investor bases, institutional and retail; how does this affect the branding exercise? Does it make it inherently more complicated?
Alain Berry, Amundi: When Amundi was established four years ago, we chose a neutral name without associating the names of our shareholders. The objective was to serve all clients, both institutional and retail networks with the values and the engagement of the brand running through both segments.
The impact for us in marketing and communications has been to adapt the communication tools to the needs of our different clients. It works well though the documents are very different when talking about either retail clients or institutional.
Rob Sanders, Aberdeen: We find different marketing approaches are needed for different client segments but the importance of brand to our clients is the same. We want clients – whether wholesale clients or pension funds – to understand what Aberdeen stands for.
Our brand is a safety net for all clients; they know we are here to stay, they understand our business and how we operate. The marketing approach may change, but the brand is of exactly the same level importance.
Joseph Pinto, Axa IM: Probably the most complex exercise is to take into account your legacy, where you come from, the brand of your mother company, and the historical brands that you may have encompassed through various acquisitions. Then, there is the question of where you want to go. As far as AXA IM is concerned, our ambition is to become a global player, present in all continents. In our case, we need to make sure that the values of our brand in our home markets can be exported in other continents.
Neville Vyas, Allianz Global Investors: The core branding message should not change. Great brands start with great businesses, which are built on great people; you want to tell that story across both client bases. For it to resonate, sometimes the tone of voice should change, sometimes so should the marketing vehicle, but the brand message should stay the same.
James Cardew, Schroders: It is difficult because in the business of asset management you may have a core logo or brand, but also recognise that sometimes the values of your brand might be more skewed towards certain parts of the market. Historically, ours has been slightly more skewed towards the discretionary and institutional market base and that’s the point raised about the history of the business.
There is a challenge presented by this between whether your brand is a service-led brand in an institutional discretionary channel, through to where your brand is a promotional-led brand in the consumer and advisory channels. Sometimes it’s a balancing act and difficult to get right. It can also be that your success in a given channel starts precluding your ability to be successful in other channels. Fidelity had a struggle institutionally in Europe, yet had a phenomenal time with end-consumers on the Funds Network and through mass advisory channels.
Fund managers can overestimate the ability to stretch brand across client bases. A really successful fund manager would have a brand stretching all the way from end-consumers in the high street through to sovereign wealth funds – but that’s a challenge.
Pinto: The ability to be successful across channels may not necessarily relate to the brand, but more to the customer experience. Being good at serving one client segment does not mean you can be good at another segment.
Cardew: Yes. A wealth manager or a top-end private bank will say they are able to tailor the service to individual family needs. That becomes their brand and it would be difficult to adapt that to the mass high street market. There might have to be a trade-off between industrialisation on one hand, and the face proposition.
Sanders: However, it is the brand awareness that will bleed quite easily from the retail market into the institutional market and there are also products that lead from one to the other as well. An institutional product can get a lot of uptake on the retail side.
But, yes, being very concentrated and focussed on one channel can present a challenge to shift quickly.
Pinto: Professional buyers and intermediaries recognise who the best brands are. Asset managers need to start speaking more and more to end-investors in order to raise their profile.
Diana Mackay, Fund Buyer Focus: Yes, this is becoming a key issue now with more and more distributors saying they want asset managers to take more action to persuade investors of their value in order to drive the whole business. This is a call that is now common regardless of distribution channel.
Pinto: Absolutely. And this is the case in the context of the RDR [retail distribution review] and other changes. And it doesn’t even mean that we’ll want to sell directly to retail investors; it’s more a case of making retail investors aware that your offering is inside another’s offering, just as Intel made computer buyers aware that its chips were powering computers – and why would a computer buyer want to buy anything else.
Sanders: There is a lot of pressure on asset managers to make consumers not just aware of your brand to help drive sales, but there is regulatory pressure to make customers understand what you’re about and for them to understand your business.
More and more materials we produce for distribution partners are used also by the end-client because the distributor uses them to give some sort of messaging to their clients, whether about the product or the company. Materials, therefore, are becoming more retail in orientation and it does not matter now whether brand and affinity are built through the distribution channel or in the open market.
Cardew: From 2000 onwards, regulatory pressure in the UK and to an increasing extent in Europe served to make fund managers careful about promoting themselves to end-consumers.
We had to be really robust in what we said so that it could not be misinterpreted.
Then, since 2008, an environment in which our products are sold or advised by intermediaries started to dominate. But as we come out of that phase, the investment and regulatory environment has become about risk-based products, which will push asset managers to move towards building better capabilities and building end-consumer brands. I’ve got no doubt at all that in three to five years, we’ll be back in the sort of situation we had in the late 1990s with quite a few relatively well known asset management brands.
Mackay: Asset managers are not traditionally very good at producing marketing messages that the end-consumer can understand. This is partly down to compliance issues but also because historically they have only needed to deliver business-to-business messages. Moving on from this approach to produce marketing literature that’s meaningful is going to be a big step for many to take.
Five or ten years ago, if many groups tried to create end-client marketing messages, their distributors would feel threatened that they were after direct business. Now they are actively asking for help with selling products. Distributors want clients to come to them and say “I want this fund”.
Funds Europe: How do you physically and practically approach brand building and what role does advertising and PR play? Has the online world, including social media and online transaction environments, presented challenges for branding?
Pinto: Social media is a huge opportunity for branding. We all agree we need to communicate more and more with the end-investor. As fund managers, we lack local branches, so one way to convey messages is through social media.
However, fund managers have to be careful about where they position themselves versus potential distributors. For example, retirement could be a topic for any distributor, insurance company, or asset manager; but possibly the kind of messages that those three big types of player will want to communicate around retirement will not be the same.
Cardew: Online is at various stages of development in different countries. About 80% of financial advisers in the US now use LinkedIn for business development. There are certain tools that work for certain sectors. The challenge as a marketing team is to competently handle these tools, which also change quite quickly.
Sales and client service staff need to be trained to use different networks and platforms. For example, a client at a discretionary client event was tweeting throughout the entire event about what our presenters were saying on-stage. Companies need to have a handle on that.
Berry: The most important value of a brand is its reputation. I believe that the biggest challenge in social media is to preserve your brand reputation. This means following what is written and said about your company all around the world, and to be able to react very quickly.
Pinto: All means – advertising, PR, social media, events – should be used to build brand. At Axa IM we communicate through all these routes. What you have to consider, though, is the frequency of communication.
For example, portfolio managers can express themselves about market reaction on a blog perhaps weekly or fortnightly. This is an appropriate frequency of communication. We also organise, once a year, a thought leadership event, where we gather our largest clients and make them think around the economic environment and its implications towards relevant investment themes. While both exercises are of a different nature, they contribute to brand building.
Mackay: Technology facilitates and allows asset managers to almost personalise the experience that everybody has of the information on websites by allowing people to pull down what they want. This means distributors will not complain so much about getting too much information. The more that goes online and the more that they are guided to what they want, the easier it gets to communicate the right messages to the right people. But getting navigation right, and making sure core documents are up to date,
Cardew: There’s a challenge about what we can do as fund managers with online advertising. Digital advertising has got genuinely terrible effectiveness statistics and, generally, online display advertising hasn’t really worked. The advertising model is quite challenged by social media, where messages can be thrown out there and a certain portion comes back to you as people choose the messages they want to engage with.
Having said that, if your service model is increasingly online as well, especially for direct-transaction business, it seems to me that the end-consumer also needs to see something that reassures them a physical building exists behind your name. This means pure brand building, the type that builds confidence in people that you are a substantial and long-standing organisation, has still got a really strong role in the press. However, I think product advertising will be online in three to five years.
Funds Europe: What has been the impact of regulatory change in recent years on fund management marketing? Has pressure on marketing departments from regulators increased since the crisis or is the level of scrutiny the same?
Vyas: Marketing departments perhaps haven’t been affected as much as some other departments in fund management firms. This is partly because, if you’ve got a strong brand, with your clients at the heart of it, then the TCF [treating customers fairly] element, should already be ingrained, so the level of scrutiny you are under shouldn’t make that much of a difference.
That said, there is a lot of work that goes into the production of key investor information documents [KIIDS]. Across Europe, we produce 18,000 KIID documents in 16 languages – and that’s a challenge. At Allianz GI, we have the resource to handle that, but I imagine for smaller firms it may be an issue.
Pinto: The real challenge regulation has given to large players is of organisational order. As a firm present in various countries, we aim at providing the same marketing supports to all clients. At present, we still tend to multiply the number of marketing documents for a given product in order to adapt to the various local regulatory requirements. More homogenised rules would help.
Berry: Yes, I agree. On the positive side, successive regulatory developments have highlighted the inherent risks and put the client back at the centre of asset managers’ concerns. On the negative side, the messages have become more confusing – for advertisement with the disclaimers, costs have increased and there might also be a risk of less responsiveness.
Funds Europe: Are there any concept brands that are relevant to fund management – the “pensions problem” for example – that can be leveraged for market positioning?
Sanders: Outcome-oriented investment seems to be firming up a bit more. There are different outcomes for different types of people; more reliable outcomes or at least presented as such. You can see asset managers are looking at different stages in a person’s life and not only about maximising pension pots any more. This is how people are starting to build their products, and with different levels of risk.
Mackay: The industry has been focussed on retirement as the solution, yet there’re so many other steps along the way and it’s to do with the messages that come out. It is very difficult for asset managers with a traditional business model adopt a new approach because they have been reliant on their distributors to come up with solutions of that nature for the end investor. For most asset managers the focus is on providing the components for somebody else’s concept.
Cardew: Asset managers intuitively want to diversify themselves in what they stand for by channel and product. They have had more success at being thematic investors, but even thematic investors have more traditional products in other areas. If you are a recognised emerging markets brand you’re in a great place for three years out of five, but there’s nothing in the other two. We are also seeing stewardship develop as a brand in the UK. This is growing.
Firms such as the ones around this table are trying to diversify their business flows and what they stand for, to create longevity in their core brand.
Sanders: When we refreshed Aberdeen’s brand, we went through a whole process to ask what we could stand for as a group, which was not just product related or related to investment capability. This is because between different investment processes and products you might stand for something which is slightly different.
Aberdeen has a very broad business and the challenge – like for all of us around the table – is to spread awareness so people understand us as a group, not just for one product in which they think you do well.
In our case, the brand is about the culture of the business, who we are and what we imply: transparency, longevity, stability and straight talking. Around the world, my colleagues at Aberdeen all live this culture, so that was a strong message for us that we managed to communicate.
Vyas: Concept brands can certainly be helpful if you’re talking about the pensions gap, the savings gap or that type of broad theme. They encourage discussion and they help people to focus on real challenges. But I’m not sure they’re necessarily something that individual asset managers should be bringing to the table. They feel more like something that governments do.
Pinto: Concept brands are a big opportunity for our industry as long as we can deliver the promise we make, be it in the retirement space, the financial protection or any other territory we decide to take. They are a way for us to help end-investors better understand who we are and what we do. In the past, we have probably been perceived somehow as sub-contractors of distributors, but now we probably need to speak up more.
Mackay: One of the best concept brands in the past was Save & Prosper, a brand owned by Fleming and then JP Morgan – it’s now all subsumed into the JP Morgan business. Save & Prosper had real resonance in its day.
Funds Europe: How can marketing teams absorb the need by sales departments to shift their focus from product to product in line with their sales targets?
Vyas: Modern sales and marketing teams are very joined up. It’s not always been the case, but modern sales teams will go out and really listen to clients and engage with them.
Sanders: Marketing’s gone from little ‘m’ to big ‘M’ in some ways. Marketing is a bit more strategic than it used to be.
It used to be about just producing brochures and support tasks for sales.
But now its value is recognised. Marketing’s job is to build a benign climate for our sales teams to interact with their clients and now there is recognition there from sales teams that they need a strong brand to help them and that we’re the people who build that.
Cardew: There’s quite a lot of specialisation going on in sales teams at the moment and they are looking for more support from marketing teams to make the process easier.
Funds Europe: Giant fund managers, such as BlackRock and Fidelity, are said to have brand power, which attracts large flows; is there a correlation between size, flows and brand?
Mackay: No. There is absolutely no correlation between brand power and sales volumes. Size and scale in the form of brand power can do two things: limit outflows in a negative cycle and bring flows back quicker when the cycle turns.
The biggest problem for large brands is they will always also have the biggest legacy pool of assets, so when the markets crash or they get hit by a bad period of performance they are the ones that will be hit the hardest by redemptions.
This means that small boutiques will very often survive bear market cycles much better. They have small pools of assets and are working with sophisticated clients. You can never draw a parallel with the flows and the brand, except when the markets are very bullish and then you can see a fairly direct link between the top selling groups and top brands.
Vyas: Size helps in terms of resources but we need to be careful not to confuse brand quality with logo recognition; they’re two different things.
It does help to have your logo recognised – though research that we’ve done shows that investors are more inclined to invest with companies where they simply recognise the logo.
Berry: The success of an asset manager is multi-factor – size but also fund performance, quality of the sales teams and client service, pricing competitiveness, stability of the asset management team, etc.
The power of the brand is at the same time a result of these criteria while being considered as a major component.
Sanders: Sometimes your brand can convey that you’re the right sort of partner to be able to service your clients, who are often global themselves.
Cardew: Once you get to a certain scale that gives you the ability to diversify your channel and your products, which in turn gives you the ability to invest in your product teams, your service infrastructure and the robustness of your overall proposition.
But the other thing scale brings is you get trusted to innovate a bit more than a boutique.
Funds Europe: Does marketing communicate the values that your company stands for and what are the most important key components?
Pinto: Branding is a strategic decision, this is why we have recently embarked on a branding architecture review of Axa IM. It aims at defining what we want our corporate brand to stand for and identifying the most important key elements of our brand that we want to carry across all the continents, in the context of our growth ambitions.
Berry: Last year, Amundi adopted the concept based on “confidence must be earned”.
This a good example of a concept adopted in a post-crisis context, amid defiant public opinion with regard to financial institutions, a call for transparency and for the product to deliver “what it says on the tin”. The concept has been rolled out across the different client sectors.
Vyas: At Allianz GI it’s very simple. We have a two-word philosophy – “understand, act” – and it underpins everything that we do. It’s about combining a detailed understanding of our clients’ needs and then acting decisively to deliver on our company’s promises.
Sanders: We are starting a kind of return to simplicity and we do communicate that quite well in all of Aberdeen’s marketing and communications.
Cardew: We are guardians of a significant part of the brand and hopefully it does communicate the values of the firm, which centre on the fact that we would not succeed in the very long term unless the clients do.
Mackay: The asset management industry as a whole should commit some of their marketing budgets to promote the brand of funds and not just their own corporate brand.
Some efforts are being made in some countries, for example Austria, which recently launched its second World Fund Day, but generally we’re seriously lacking a commitment to promoting the brand of funds.
©2014 funds europe