With such an intangible product, it can be hard for asset managers to communicate what they do. Having personality and connecting with customer aspirations may be the key, our branding roundtable hears.
Simon Hildrey (chief marketing officer, Liontrust)
Christian Barnes (brand strategy consultant, MackayWilliams)
Courtney Waterman (head of Emea marketing, Schroders)
Funds Europe: Is ‘digital’ a game-changing tool in terms of customer engagement and marketing? How is your digital programme evolving?
Courtney Waterman, Schroders: Digital is definitely a game-changing tool. It’s changed how people find information, how they learn about things and fundamentally how they make buying decisions. At Schroders, our digital programme is deliberately simple – it’s based upon a few key principles.
First of all is making sure our content is most relevant; the second is finding the smartest delivery; and the third is that ability to constantly assess what’s working and how you can continue to tweak and refine it. This last point is something that you really get from digital.
Content needs to be clear, well written, timely and interesting to the client. We know so much about our audiences when they come on to the site and so we can make sure that we give them content they are interested in based on what they’ve looked at before. This gives them a very personal experience where they get content that might be related to what they’ve been looking at in the past – it’s the ‘Amazon effect’.
Simon Hildrey, Liontrust: Personalisation is really important and it is what I would emphasise. We’re now in a world where people expect bespoke, personalised content and communication, and that’s where we need to get to as an industry, particularly on the B2B side.
When digital works well, you can reach specific clients and you can see how they respond to the content you send them. What’s more, you can adapt and target them with the right kind of communication format because they might have a preference for video over text, or vice versa.
Content does have to be very strong. In some ways you’re better off doing less but doing it better, because people are inundated with emails and communication.
However, digital is not just about engagement, reach and data, but also about workflow systems and automation – basically making our lives as efficient, scalable and cost-effective as possible in terms of how we deliver. The production of literature and some day-to-day tasks, by utilising digital it makes the whole production process more efficient.
None of this detracts from traditional marketing, though. Advertising and sponsorship are still powerful.
Christian Barnes, Mackay- Williams: My firm is not an asset manager, but what I see is digital inverting planning models. We’ve moved from one-to-many sales or comms funnels to cones, where it is possible in some instances to start with one-to-one and build that out to a new community over time. So it’s nearer to how the best content development works – trying to pique people’s interest with something and then get them more engaged with the deeper content.
However, we do need to be cautious with digital. At the consumer end, there are the independent, lone investors, who do not want you to know so much about them right away. They want to find out more about you first.
Of course, in any industry there’s the desire to find out as much as possible about the customer, but firms need to wait a bit until the prospect customer feels what they’re doing is on their own terms, otherwise there can be a real sense of invasion.
Within digital is fintech. Investment flow, according to the recent Simmons & Simmons Hyperfinance Report, seems to be coming from outside the sector – for start-ups, say, or as development capital – and I would say that’s a warning for the asset management industry.
Waterman: From my experience over the last year, I think the pace of change has really increased. People realise that digital marketing offers the opportunity to do continual refinement and tweaks. So instead of doing a big ‘waterfall’ project where you spend 18 months working on something and find it’s a bit obsolete by the time you release it because priorities have shifted, with an agile approach to digital you can refine much more fluidly and regularly.
Barnes: Yes, though it brings to mind ‘growth hacking’ where the whole marketing rulebook gets torn up and start-ups charge about finding where the next quarter-of-an-hour’s growth is coming from.
Overall, though, increasing agility is a good thing as long as people stick to an overall strategic idea or framework.
Waterman: Otherwise it’s too scattergun. There absolutely needs to be a framework and then within that framework you can be far more creative and responsive to what’s of interest to clients.
Funds Europe: Apart from your own, which marketing and/or branding exercise have you most admired over the past year within fund management and financial services?
Hildrey: Television advertising from the banks seems to be much more aspirational than it used to be. Aspiration is very important for us; this is an industry about long-term investing and how that can benefit people. Sometimes in the industry we can get caught up on transaction and product. Consumer marketing needs to be more about aspiration.
Barnes: NatWest and Nationwide are good examples of banks or building societies that are out there talking about the character of the business and why they believe in what they do. The realisation is that reputational trust is actually much more important than transactional trust. Transactional trust now is almost a given and so values-oriented advertising in communications is becoming stronger and stronger.
One of my favourite examples in asset management at the moment is the advertising for J O Hambro Capital Management’s Global Opportunities Fund. It is ostensibly a product campaign, but I think what’s interesting about it is it’s not talking about performance or portfolio construction or fund composition or anything like that, it’s actually talking about the values of the brand of J O Hambro Capital Management – as evidenced by the fund itself.
It uses the Amundsen-Scott South Pole story, which gives it some character, some personality, and actually you warm to the brand as much as you warm to the idea of the product, and therefore you warm to the managers; ultimately the managers are who you’re going to have the faith and trust in.
People see through big global glitzy stuff quite quickly; J O Hambro Capital Management have realised that.
Waterman: My favourite is ClearScore. Their advertising and their whole business model was based on the simple idea that your credit score should be free, and with ClearScore, it is.
It was incredibly disruptive.
The people who at the time were selling credit scores and credit reports suddenly had to completely change their business approach.
The reason why I liked it so much is it was very human and it used humour to make it engaging. It’s polarising, though, as it was mentioned on the website called ‘Adverts That Make You Want to Smash Your TV Set’.
But part of its charm is that when it does appeal to you, you really get it. It made my daughter think, ‘Well, what’s a credit score and why is it important?’ There’s a hook, and then you want to know more.
When you then go to their website the user experience matches their words. Search them and the first thing it does is talk about being ‘Forever hassle-free’ and to anyone who’s busy at the moment, this is so enticing.
And there’s video, not too polished, one with the CEO speaking naturally and not overly rehearsed, so again it’s quite human. A series of advertisements leaves you wondering what’s going to happen next, and it’s all on YouTube and very entertaining.
We try to show that human approach too. For example, our 60-second videos at Schroders. We can see how often they’re viewed and they are really popular – quick, to the point, and not scripted. If people have made a slight mistake, that’s fine, they just keep going.
Hildrey: A challenge for the industry, I think, is that we don’t have a tangible product, and brand is becoming more important.
Barnes: Yes, it absolutely is. Every year in our FB50 report, brand preference marginally moves around the top two or three most important attributes for fund selectors in Europe. Product attributes are becoming less and less important and things like likeability, brand preference, client-oriented thinking are right up there at the top now.
Not having a tangible form to the product is a good point. It’s not helpful for us to look outside asset management for ideas to the car industry for example, where the tangible form of the thing people buy can effectively
carry the brand’s attributes and often initiates and perpetuates the engagement.
But a fertile area for asset management is cause and purpose, as in the case of IBM. That company is no longer about churning out grey boxes, it’s about the ‘Internet of Things’. It has a cause and a purpose, which inspired the whole ‘smarter planet’ idea, and that has transformed IBM from being a churner-out of business machines into a business driven by this quite cerebral cause for the good of humanity. And they weren’t trying to be everything to everyone, either. They knew there’d be a section of the population that would be motivated by this, and that businesses need to be seen to be, because it’s ‘the right thing to do’.
Hildrey: And where our industry can follow that is with the whole notion that financial advice, wealth management and asset management provide a benefit for people who want to achieve a certain lifestyle. Again, it’s about aspiration.
Funds Europe: How do you wish professional and retail fund buyers to perceive your own firm’s brand?
Hildrey: It goes back to my point about a tangible product. Liontrust wants to be distinct in a market where it’s not as easy as distinguishing one car from another.
The lion image is important to us, suggesting courage, pride and power. And we talk about independence and consistency.
We also talk about our culture, investment process, consistency and transparency. A lot of groups do, but then it’s about actually delivering it. It’s quite hard to say you’ve got something that’s completely unique. People use the word ‘unique’ too often; very rarely is something unique.
With our new website, we’ve particularly considered tone of language. The tone is ‘We, You, Us’, so we are accessible and we’ve moved away from the corporate ‘Liontrust is this’ approach. This is reinforced by the fact that we don’t ask people what type of investor they are when they visit our website, apart from for a very small number of pages that are only available to intermediaries and institutional investors.
Waterman: I completely agree that there is a challenge with ‘unique’, and people use that word a lot.
Fundamentally, the distinction is between a ‘distinct’ brand and a ‘different’ brand.
For us, we’re very clear on what we want the brand to bring to life. We want it to show that we’re relevant to our clients, that we already understand their challenges and that we can help them. And, as they change, we can respond to those needs.
We want to show that we are trusted and forward-looking, so when they realise what their challenges are, we‘ve probably already been helping other clients with them as well.
Barnes: The ‘barbell’ myth that said an asset manager either had to be large, or small and specialised, else fail in the middle ground, was predicated on commercial factors of cost, economies of scale and regulation. It absolutely missed the issues of engagement, personality and emotion that we know are massive drivers. There are businesses all over the world that are based on sentiment-driven investment.
Look at how some brands have risen up the ranks over the last few years, particularly this year. They shouldn’t be here according to the ‘squeezed middle’ theory, but they are some of the fastest risers and that’s because of what they’ve done to make themselves distinct from others, if not unique.
Candriam are really interesting, for example. The spirit of independence that came out of the post-Dexia rebrand gave them a feeling of new energy. They worked everything out to align their values with their infrastructure and product range.
Nordea has built a business around the concept of stability. This is shot through the firm as well as their entire product range, not just their Stable Return fund, which has been hugely successful over the last year.
And Robeco is another really good example where, since 1929, they’ve been seen as ‘cautious pioneers’. They’ve always been at the forefront of innovation, but they’ve done it with absolutely methodical discipline all the way through to today. In the last few years, they’ve gone from about 22nd to tenth in our brand rankings. This wasn’t just because their advertising says “cautious pioneers”, they actually do behave like that; it’s their collective personality.
Your question was about how asset managers might want professional retail fund buyers to perceive their brands. If I was an asset manager, I’d just want them to perceive it for what it honestly is. Then you can’t fall over.
Funds Europe: What is your approach to millennials?
Waterman: We tested our rebrand across the total population. Everyone talks about millennials, but the first wealth transfer is actually going to be from the baby-boomer men to women, so we wanted to be talking to a really broad range
of people.
With millennials, we need to know what it is they want to learn about and what is the best way to deliver it to them. Previously a lot of education would be face-to-face, meaning client relationship managers would go out and would provide that education. Is education now going to be better on digital? Would it be best to give a programme to an adviser to use with their clients? Should the education be on our site?
A big point about millennials is they are more comfortable providing information about themselves. Hesitation is less of a consideration with them than it would for other generations, which allows a more personalised approach.
Hildrey: It’s very difficult to group people together and assume which are the best ways of communicating with them. Even millennials will be a disparate group. Some have already inherited wealth, while some are still trying to save. I think it’s much more about personalisation going forward rather than producing something for the 25-to-35-year-old market.
Funds Europe: Has the barrage of criticism aimed at active management in recent years damaged the fund management industry on a brand level? Is passive winning ground with consumers and institutions as a result?
Waterman: It has had an impact. The headline criticism appears to cover the whole industry. The criticisms make no distinction between geographies, asset classes, market cap or styles; it’s so overwhelmingly critical of all active management. The active-passive debate has been around since the 1970s, but the current conversation seems more unbalanced.
Asset management is presented as a binary choice, active or passive, yet blending should be considered much more.
Only a few years ago iShares, the largest ETF provider, actually did a huge marketing and thought-leadership piece talking about blending and how to blend active and passive.
Schroders uses our own beta products. We’re not against indexing, but equally we are active investors as well, and I think as an industry, rather than criticising active or passive, we should be talking about showing all the different financial instruments and approaches that are available. We should bring it down to helping clients meet their needs and delivering performance.
When an investor is too nervous to move out of cash, the active or passive conversation isn’t helpful. When investors are unsure how to fund their retirement, that binary debate isn’t helping them make a decision.
Hildrey: Yes, and I would add that asset management is about value for money rather than cost. The debate should be more about value for money, it’s about what you achieve net of fees, and as part of that it’s about education, it’s about transparency, the industry being as transparent as possible so people understand the costs.
Instead of the passive/active debate, there should be more focus on combining these. It shouldn’t be about whether you should pay less for a fourth-quartile fund, it’s about what you want to achieve over the long term and what’s the best way to do it as cost-effectively as possible.
Barnes: Our research is clear: for European fund selectors, active or passive is a purely commercial call. More broadly, though, the debate and the anti-active brickbats (‘rip-off fees’ etc) from the passive camp may contribute to the perennial bottom-of-the-table ranking of the financial services industry in terms of global consumer trust.
Waterman: The discussion takes in luck versus skill. People are using statistics to show that skill is real. There are lots of technical tools to help show the value that active is providing above the benchmark returns. We need to keep it simple and about what customers actually get for their money, asking if they are going to be better prepared for the future.
Funds Europe: Why do fund managers not advertise on television? Does highly visible advertising correlate with higher fund flows?
Waterman: Cost is part of it, but also the lack of targeting within the audience, though today you can target better.
Also, TV advertising would be compliance-heavy and so you would really lose the impact of the message.
From a cost point of view, it’s not something we are exploring at the moment. I did at a previous firm where TV advertising was done in the US, though not in Europe or the UK. There was a lot of discussion about the compliance aspect. It really detracted from the message that you were trying to have. I’m sure we’ve all watched the ads where the only thing you remember is someone reading some wording very, very quickly and it didn’t seem to make sense.
Hildrey: I think everyone’s a consumer. I think whether we’re marketing to an institution or intermediary, everyone’s a consumer, so I’m a big fan of consumer marketing.
Certainly one of the challenges with any consumer marketing is the disclaimers, the risk warnings, but obviously if we’re talking about the whole idea of aspiration, we’re talking about the human element, then you would go more down that line anyway.
There’s lots of different media, it’s not just TV. For example, radio is doing very well and is an avenue that groups could look at. For me, it’s another consumer media, but already we are using other aspects, whether that’s traditional newspaper advertising, sponsorship, social media, there’s lots of consumer avenues.
Liontrust has sponsorships and one of the challenges that we’re trying to deal with is how we explain what we do. There are companies that I’m aware of that might have high public awareness, but people don’t actually understand what they do and therefore why they should use them.
So as well as sponsorships, we use other marketing activities to support our growing profile and explain what we do and why they might engage with us. By taking such an integrated approach, we find that people really begin to understand who we are. People have said to us that they see Liontrust everywhere, showing us that as long as you’re using all these routes to market, you can have an impact.
Barnes: Paid-for media, including television and other broadscale advertising channels, is so much more fragmented now. Although it is more cost-effective to advertise on television these days and you can even target by postcode, the argument’s already been lost.
As well as the media spend, it costs a lot of money to make proper films and decent posters. And it is hard to get a board to agree that advertising through all kinds of disparate channels will work, when there is no clear correlation between spend and sales as our data shows.
M&G, year on year, are number one in total advertising recall and yet they’re the tenth-most used group. I know that’s not a direct match for ‘visible advertising’ and ‘higher fund flows’ and there is some consistency in BlackRock and Fidelity’s rankings on ad recall and usage, but it’s not clear-cut, so it is not surprising people avoid television advertising.
Waterman: We have found that where we have highly visible advertising, it correlates with brand recognition and a favourable attitude. There’s a halo effect. We found that advertising lasts in people’s memories.
Brand awareness is not always about bringing in new money, it’s also about ensuring that your clients are still happy with the choice they made when they invested with you. This may
mean that they leave their investments with you for longer. Increasing this longevity has a positive impact on the commercial side.
For any of us it’s difficult to isolate one tactic such as advertising and show the impact it has on fund flows.
Hildrey: Our research shows that advertising is effective in conjunction with other elements of the marketing mix. There are activities that are more measurable than ever before, but it’s hard to isolate one thing and say how effective it has really been on its own. It is the integration that matters and marketing activities working in conjunction with each other.
Waterman: Yes, and on the digital side you can attribute to certain tactics more importance than to others. So if you can see the total journey of your client to buying point, and you know that they started by clicking on a digital ad, and ultimately you find that downloading a fact sheet is a buying trigger, you can look back and see which tactic was the most important in influencing the transaction.
Funds Europe: Over the past year, what have you learnt that has most informed your thinking about asset management branding?
Hildrey: For me, it is personalisation. This is what’s coming through more powerfully. It’s also about the service delivery, giving people what they want and expect and when they want to receive it. It is vital for us to deliver on that and not deliver what customers don’t want or aren’t interested in.
Waterman: The past year for us has been about the rebrand and we were clear that we needed to define our value proposition and communicate it clearly, avoiding jargon and using plain English. It was a steep learning curve. We wanted to communicate our heritage and stability but ensure the brand was digital first, forward-looking and engaging.
It feels like the traditional campaigns have lost their impact. We needed to balance the old and new. It is the client that decides what’s important.
Barnes: For me, it’s the increasing evidence that shows the commercial importance of your brand being liked – and the surprisingly weaker correlation between brand preference, or likeability, and aspects such as pricing and cost.
And I am further convinced that it is the personality and character of a firm – what it believes in and sets out to do – expressed through day-to-day behaviour and relationships as well as through marketing and comms, that differentiates a firm and determines how liked it is.
©2017 funds europe
