Gulland Padfield analysis: Which Asset Management firms are sharpening their proposition to clients and how?
In the follow up to its 2015 study of the market positioning and brand message of the world’s leading Asset Management firms, Gulland Padfield, the specialist client experience consultancy to the Asset Management industry, concludes that there has been considerable movement in market messaging and client strategy by some of the of the major brands – with implications for the others who failing to keep up.
In our first report in 2015, we clearly identified how far the majority of Asset Management firms needed to go to catch up with the strong focus in other parts of the financial service sector to improve client experience and develop a much sharper client strategy. For years, many Asset Management firms had wrestled unsuccessfully with the issue of brand definition. Our 2016 updated analysis shows that some still do., says James Edsberg, partner at Gulland Padfield and co-author of both the 2015 and 2016 reports
But things appear to be changing. We called our first report ‘Brandshock in the Asset Management world’ because, frankly, it was surprising that so many large groups were missing the opportunity to highlight and strengthen the proposition to the Institutional Asset Market. We called our second report ‘Who leads the Asset Management brand race?’ Why? Because when we revisited our analysis earlier this year, we saw considerable, if asymmetric changes among the global leading pack. What was before a largely unbranded, under-communicated and only quietly competitive sector now has some firms which are obviously making considerable efforts to sharpen client focus and compete assertively. In fact, we conclude that the sector has jump-started into a race between some of its leading players as they strengthen their proposition and go-to-market strategy in 2016 – 2017.
James Edsberg continues, We still believe that there is a huge opportunity for institutions to strengthen client loyalty and acquisition through improvements to the proposition. And in our new 2016 study, we see a growing divide between firms which are getting this right and those which are failing to tackle the challenge.
Gulland Padfield’s study looks at the market positioning and brand messages of leading Asset Management (‘AM’) firms. In this review of the conclusions, we discuss some of the main observations from Gulland Padfield’s analysis and suggests how Asset Management firms can define their place in the market better and strengthen their brand strategy through a profoundly client centric approach.
Gulland Padfield’s Report looks at how the client proposition of the leading asset management firms is positioned. Many continue to have poorly-defined and un-client centric brands and market messaging. But what has happened over the last 18 months in this area of client strategy?
Last year’s report emphasised that the most effective Asset Management brands were those that attempted to articulate the benefits that their capabilities have on clients. What we are seeing now is other Asset Management firms following this viewpoint and evolving their positioning by creating a more client-centric and clearly defined set of messages.
1. Alignment of message focus to the client relationship. The strongly held view inside the Asset Management sector is that investment performance and operational statistics are the principal ways to acquire and keep client. But that appears to be rapidly changing – as both clients and managers recognize that ‘performance differentiation’ is (i) exceptionally difficult to sustain and (ii) risky to communicate in current volatile and complex market conditions. Instead what we now see is an increasing number of firms actively putting strong client relationships at the centre of their business strategy and directly emphasising how they will seek to provide meaningful and long term impact and benefit to client institutions – in good times and bad; a much more sustainable message.
In our latest report, we see that over 1/3 of the advisory companies which had previously focused on core capabilities as a central differentiator, are now emphasizing the impact their service has on clients as the central message of their proposition. This powerful shift includes a new emphasis on tailoring service offerings around institutions’ needs. It appears that the way firms interact and collaborate with institutional clients is finally now recognized by leading Asset Managers as a clear differentiator when it comes to the selection of a firm by clients.#
2. A residual reliance on capabilities. However, our study also found that about 1/3 of firms still had ‘core capabilities’ as their primary message. Further to this, an emphasis on core capabilities still ranked as a first or second priority for every Asset Management firm we reviewed. A number of firms therefore remain heavily reliant on detailing and emphasising their capabilities and see their products, solutions and history as having strong appeal.
3. Poor evidencing of the Institutional Am proposition persists. Where the top Asset Management firms are now standing out in our report’s ranking of the leading firms, is in their willingness to justify and evidence the impressive breadth and depth of their capabilities by describing how these capabilities have an impact on the client. The firms that came out top in our study were the ones that had a succinct, clearly-defined, prominent but above all evidenced client-centric proposition.
4. Consistency of message – the strategic advantage. Another element which those firms leading the sector have in common, is consistency and discipline across their platforms, channels and campaigns. Clients - even institutional clients - are targeted with huge quantities of information about competing services. The implication is that consistency and message discipline by an institution’s client-facing staff as well as all business development, sales, marketing and communications activities is vital to achieving ‘cut-through’.
5. Style and people; the overlooked differentiators: In our study, the ‘style’ in which the company would work with the client and the quality of ‘people’ within the firm are fundamentally overlooked. None of the Asset Management firms emphasised the ‘style’ in which they worked as a first or second priority and only one firm focused on the quality of its ‘people’ within the organisation - and that was as a secondary priority to their central proposition message. There is a clear opportunity for firms to differentiate themselves by emphasising, and subsequently justifying, how their style and their people within the organisation will impact the client.
For those firms who still haven’t addressed these issues, the observations we made in our 2015 report still largely apply. We continue to identify several elements which hold them back from an emerging leading pack including the following three challenges in particular:
1. Lack of client data and insights on which to build a proposition. Any brand is only as strong as the understanding it has of the needs of its clients. Many Asset Management firms continue to rely on a combination of industry-wide surveys which don’t give sufficiently granular insights into their own client base and anecdotal feedback from client facing staff who may not always ask the right questions to help the business shape and strengthen the best message to supportive the business.
2. Complex route-to-market channels. Unlike those financial services brands which are exclusively focused on retail customers, Asset Management firms have to interface in a much more complex environment. Sometimes their relationships are direct with the end investor. At other times, they are indirect through investment consultants on behalf of an institutional investor or through wholesale channels to financial advisors. This diverse focus akes brand strategy very challenging.
3. Asset Management brands remain too dependent on individual star managers. Departures of high profile individuals from leading firms, only continue to illustrate the challenges firms face in balancing an individual’s importance to the franchise with the value of the institutional brand. Getting that balance right is an on-going challenge for the industry. A stronger institutional brand helps smooth the impact of star managers arriving or leaving the firm.
For these reasons and others, many leading asset management firms are not getting it right.
About the Report
Gulland Padfield’s report reviews the brand and marketing positioning of 20 leading global asset managers. It assesses the publicly-available information on company web sites and in other marketing and communications materials and in the public pronouncements of management teams on this topic. The Report also benchmarks Asset Management brands against Gulland Padfield’s model for advisory and financial brands, which identifies 5 routes that most advisory brands take and the degree of client focus of each. The Report maps where leading brands sit relative to each other. It provides a useful starting point for any AM firm to assess how it should strengthen its reputation, communication and differentiation in a highly competitive and complex market.
Are you looking to sharpen and relaunch your proposition to Institutions?
Would you like to influence intermediaries by using sharper messaging? Do you need an up-to-date picture of what leading firms and your competitors are doing in this area?
Are you about to re-brand your firm and are looking for a perspective on how best to position yourself in the market?
If so, start a conversation with us today. Contact James Edsberg on +44 (0) 203 051 2295 to find out more about the report and to discuss how its findings could help an organisation like yours.