Brand is more crucial than banks realise
As the battle for both winning and retaining accounts in private banking intensifies, the role of the brand is becoming central to strategy.
Recent work for Merrill Lynch Investment Managers (MLIM) by Scorpio Partnership showed 69 per cent of wealthy investors surveyed deemed brand a key determinant when selecting a wealth manager.
Not only are these high net worth individuals (HNWIs) brand-aware, but they also believe there is little to separate many firms when it comes to the products they offer. Hence, when it comes to a choice, strength of brand may often tip the balance. If strategists consider the proposition from the client perspective, branding must be pushed up the agenda.
Ideal world
The critical factor is to determine whether any wealth management institutions currently place as much importance in terms of resources and strategic planning on the issue of brand. In an ideal world, all should rate it as highly as their clients. If this was the case, their approach would match client expectations. The clear answer from the market is, however, that institutions do not.
This imbalance has important strategic consequences. It is vital to determine why private bankers think their clients come to their institution and why they stay.
Separate primary research undertaken by Scorpio with alliance partner Maslinski & Co has indicated an overwhelming number of bankers still believe clients select banks for their product range. In addition, they think their products are differentiated from the competition.
In fact, research clearly shows the perspective of HNWIs is more often the reverse. When selecting an investment manager, many of those we have surveyed on a range of assignments indicated they select firms based on both the strength of the team that presents a solution and the corporate brand that backs them. Many have indicated that the products on offer are undifferentiated among institutions.
Paradigm shift
In an overpopulated market, HNWIs respond to brands demonstrating trust, commitment, modernity and customer-centricity. However, only a few firms are responding to this paradigm shift in strategic positioning. US houses are at the forefront although UBS and HSBC Republic deserve merit. Firms emphasising the customer-led approach are winning the plaudits among HNWIs, and in turn, maybe they are also seizing market share.
Sebastian Dovey is managing partner at wealth management strategy think-tank, Scorpio Partnership
