Branding: Easy Fix for the Investment Industry

Investment management brand creation follows a distinct formula: talk about trust, talk about experience, talk about risk controls, and most importantly, show a conference room table with two old White guys, a young Asian woman, a middle-aged Black man with glasses, and a scattering excel print-outs.

Think about every large asset management brand you can, theri names and logos, what’s the differentiation? What’s unique about their relative expertise? Why, other than name recognition or habit, do you trust these firms with your money? As someone who has been investing for over 20 years, and working in the financial services industry for over 14, I can’t discern any truly established brands amongst major players within the asset management industry. The problem with financial services, and the investment management industry in particular, is that there is no differentiation, no perceived values, and no emotional connection amongst firms. As a result, the entire industry is lumped together into a quagmire of confusion and perpetual mistrust.

So given that investment managers can’t brand themselves, what do the successful companies and industries do? How do they establish a truly differentiated brand identity? The simple answer is that they aim to communicate something far greater than the products that they offer. The iconic companies, with true staying power, stand for something. They have broadly articulated values and beliefs. They have a known, though unquantifiable expertise, that is built over years of carefully articulated communication. The great companies don’t tell you how great they are, they market themselves in such a way that forces you to come that conclusion on your own. They do this through educating you with content and strengthening themselves through association.

Today, the availability of vertically integrated networks makes it easier than ever for messages to be articulated in a more scalable and effective fashion. This is what Houzz accomplished for a highly fragmented home design industry and what Harvest is doing for the asset management industry. That said, an easier means of communication does not make branding any easier, and this is something that the investment management community is learning, the hard way. The good news is, it doesn’t have to be that way.

There are currently 3 main ways in which an investment firm markets:

Traditional — Think about the differences between T. Rowe Price and Fidelity. Did anything strike you? Did anything create any response other than the reciting of some facts -“well, Fidelity has branches?” While all of these companies have a message to convey, the problem is that it’s all the same message, and they’re telling us, not showing us.

Content Marketing — 100+ years ago John Deere began publishing a magazine, Furrow, highlighting revolutions in farming and equipment. John Deere is now an iconic brand and consistently associated with expertise in farming equipment. The good news is that many asset managers are now building brand through sharing their expertise. The bad news is that they don’t always think about the goals in publishing content. Truly effective content marketing serves to educate and benefit the reader, building equity for the content producer in the process. The two main problems with content marketing material published by large asset managers is that it’s not appropriately disseminated to a targeted audience, and the topics are typically so stale that they are of little interest to any in-market reader. The creativity needs to expand, both in terms of getting the content in the appropriate hands, and in writing content that will result in an established expertise. Ben Hunt of Salient Partners, Kyle Bass of Hayman Capital Management and Catherine Wood of ARK Investment Management are some of best in the industry. All three are brilliant investors, and all three share their expertise in a manner that establishes brand for themselves and thier firms.

Privately — This is old-fashioned blocking and tackling, and it’s still the most prevalent means of marketing for the asset management industry. Managers have in-house marketing teams, third party marketing entities, and capital markets services. It’s all necessary, but it’s expensive and the tools available limit the ability to scale these efforts. Asset management firms are very focused on their ideal customer, the large financial advisor, the multi-billion dollar endowment, or the blue-chip single family office, however, these are the blue marlins, and not everyone can hook one. And even if they do, consistently engaging and servicing the client is the other half of the battle. While in-house, and even third party marketing serves an important role, there is no way that these units can effectively reach and communicate with the total addressable market, as well as existing clients, in a scalable manner without more effective communication tools and platforms. As a result, significant money is being left on the table. Furthermore, hooking those blue marlins would be a little easier, or at least a little more efficient, if these firms had more of an established brand association when the dialogue started.

In order to market most effectively, asset management firms must employ content marketing, private marketing, and if budget allows, traditional marketing. Ideally, these three methods should work in harmony with the private marketing team pushing for the desire to establish brand in order to make them more effective. The content published by a firm should be timely and should serve as a true differentiating example of the manager’s investment strategy and expertise. The more that this content can be humanized and tell a story, the better. Finally, the traditional marketing needs to convey emotion. It needs to identify a problem and show you the manager’s expertise solves that problem. This builds brand, it builds trust, and makes the job of the marketing professional far easier.

The asset management industry has a long way to go, but getting there is a necessity. The need for scalable and efficient branded communication is only going accelerating as access to information increases, and the means by which we access that information becomes more frictionless.