While some of the largest names in wealth management, such as Barclays Wealth and UBS have spent large sums on branding, getting the business of branding right is more than just about spending power.

In an industry where many firms have traditionally prized discretion over adopting a high profile, the gulf in spending on brand between small and large firms has at times raised concerns that smaller firms’ brands would be eclipsed by their larger rivals’ greater spending power.

However, the impact of the credit crisis has clearly demonstrated that brand is about more than simply advertising spend and some of the industry’s biggest players have suffered the greatest collateral damage to their brands as a result.

While logos, visual identity and advertising are an important part of the equation, brand is about a firm’s personality overall. “This is more important than profile generated by ad campaigns or any visual summary of the brand,”Stephen Cheliotis, chief executive of The Centre for Brand Analysis, which conducts independent research to identify the UK’s leading brands on behalf of the Superbrands organisation, told WealthBriefing recently.

What a company actually does has as much impact on brand and reputation as marketing initiatives, according to Mr Cheliotis. “If the management team do something stupid, the weight of negative publicity around brands will outweigh successful marketing initiatives,” he said.

The effect of recent events in the financial industry on brand has therefore been severe. In its Business Superbrands poll published at the end of February, which establishes the

UK’s strongest business brands, the top ranked retail banking brands were HSBC at 60^th and Barclays at 107^th - falling respectively by 21 and 33 places from a year before - with RBS third at 131^st.

As the fieldwork for this study was carried out last autumn, some of the worst excess of the credit crisis had not yet struck, making it likely that banks will see further slippage in next year’s study.

Even before the credit crisis, financial brands were not “pushing at the top of the summit”. “They have gone from a dire position to one that is a lot worse,” Mr Cheliotis said.

According to Brand Finance’s Top 500 Banking Brands survey for 2009, the disappearance of some brands and the reputational damage done to others has seen them lose one-third of their value - equivalent to $218.1 billion - in the last twelve months.

Despite this, Sebastian Dovey from the consultancy Scorpio Partnership says that the investment made by larger firms in their brands will not have been in vain.

"The big household brands will have a longer shelf life and momentum than the minnows. Although it is clear many of the household names are either totally wiped out or have been banished to the back yard. They will all need to work on their brands to get back into the house," he said.

Mr Cheliotis also notes a flight to quality towards strong brands: “It has also been proven that those firms that continue to invest in marketing will suffer less and recover much quicker during an economic slowdown than those that do not.”

Brand value impacted

Pre-credit crunch, UBS’s brand was generally considered to be in a league of its own. Mr Dovey says that its You & Us campaign was “an outstanding achievement” as clients echoed back the core message and could identify with it - the mark of a truly successful wealth management brand. However, UBS’s brand has clearly been dented by the fallout from the credit crunch. According to Brand Finance, UBS lost a third of its brand value, calculated at $3.7 billion, and its ranking fell from 12^th to 15^th.

UBS shares an issue common to many top-tier wealth management firms in that their brand positioning as “one bank” now means that private banking businesses appear inextricably linked with troubled investment banking arms. As Brand Finance points out, "unification of the brand and its position has arguably been to the detriment of UBS, because it meant that no part of the bank’s operations can be divorced from terrible headlines, job losses and law suits in the minds of its clients and employees.”

James Lawson at Ledbury Research agrees that the brand is only as strong as its weakest link and therefore difficulties in the investment bank, such as sub-prime exposure, are recognised by the wealthy consumer.

“These are manifestations of an overstretched brand,” he said, observing that those firms with very focused, niche brands are more likely to be able to avoid some of these issues.

If overstretched is one issue, the second is oversold. Ledbury's client engagement projects around the world show increasing concern about overselling. “However, we have found that overselling is the symptom, the causes are twofold: underperformance and the client relationship,” said Mr Lawson.

Natasha McMillan fromPricewaterhouseCoopers told WealthBriefing recently that there has been a retrenchment towards a more conservative approach and focus on delivery of product and service. “More than a flight to safety, the last eight months have been a flight to advice,” Ms McMillan said.

PwC observes that in the

UK particularly, mid-size players have done well from the crisis and their brands have not been dented as much as the larger firms. The individual private banks that have done well in this environment are those that are able to guide prospective clients about what to do and where to put their money, rather than those booking clients’ assets. “Clients don’t know where to put their money and are questioning how safe various institutions are, as well as questioning big fees,” said Ms McMillan.

Scorpio Partners' Mr Dovey agrees that a true advisory offering is important in the post-credit crunch environment. "The new brand world for wealth management that we are now in is going to separate the real businesses that manage wealthy clients from those that are basically product brokers in expensive business centres," he said.

Brand Finance notes that emerging market brands have gained considerable ground from a brand perspective in the last twelve months, with two Chinese banks now in the Top 10 for the first time. In addition, Ledbury says that over the past decade developing regions have been attracting the large international wealth managers to meet an appetite for these glo
bal brands from the emerging wealthy, who have more international experience and education than previous generations.

“However, in

India the financial crisis has damaged many of these large brands, making their smaller domestic rivals, and those in the public sector, more attractive,” said Mr Lawson who sees this pattern being replicated in other developing markets.

The fact that a number of private banks are now majority state owned is also a branding issue. This is already raising questions from some clients on the control of information that the authorities have access to, but Ms McMillan sees a possibility that firms could in time turn government ownership to their advantage as some of the safest places for money to rest. “If organisations can overcome client apprehension on the access to information, the banks could be in a prime position to pick up clients using the safe house angle,” she said.

Investment in brand vital to rebuild trust

As well known organisations are damaged or disappear, brand has never been more important. However, it is unlikely that the wealth management industry will see high profile campaigns in the near future due to severe cost pressures. “Firms are focusing on other issues and concentrating on getting their house in order internally and reassuring existing clients. Others will use the restructuring of the industry as an opportunity,” said Ms McMillan.

"The knee jerk reaction of financial institutions in other market downturns has always been to slash investment in brand,” said Scorpio’s Mr Dovey. “However, the rules of this market downturn are entirely different. If banks - collectively or individually - want to regain market share they will have to invest in their brand as a priority. Banks that do not do this will lose," he said.

HSBC Private Bank has taken this advice on board. The world’s most valuable financial brand, according to Brand Finance, HSBC has nevertheless seen its brand value fall by some $10 billion in the last twelve months to $25 billion. The private bank has taken the opportunity to implement a rebranding as “The world’s private bank”.  “Many of our competitors are not so strong, so it's a good time to go out there and tell the world we are open for business,” said Chris Meares, chief executive of HSBC Private Bank.

Ledbury’s Mr Lawson says the most critical action for those brands that have been impacted by issues related to sub prime is to engage with their clients. He cites UBS's current Swiss campaign which features actual clients and their frank opinions about the bank. “The tone recognises the importance of the partnership element in banking relationships and is refreshingly open; there's also no better way of building the business than through the client base.”

This push in its domestic markets appears to be working. Global brand consultancy Interbrand’s ranking of the top forty most valuable Swiss brands published in February puts UBS second only to Nestle. Credit Suisse was ranked in fourth place, Julius Baer, 11^th and Vontobel at 19^th.

Client engagement

PwC’s Ms McMillan notes that whereas larger firms have seen dramatic falls “they might also pick up quicker if they educate clients, provide them with the full story and communicate their independence from the investment bank. Really rebuilding brand is down to client communications and you cannot rebuild a brand if clients are not engaged.”

Clients have rightly become more demanding as bad times have highlighted bad investment decisions, which in the good times may have been hidden. Now, more than ever, they are questioning their private banking relationships.

According to Mr Dovey, brand is often a selection factor above performance and fees. “Why then are private banks not investing in sharpening their act? It is either ignorance in understanding the changed landscape or arrogance in assuming the old ways will always work,” he said.

A successful brand requires, among other things, creating engagement and establishing an emotional connection in order to achieve advocacy. Whilst Financial Services is not traditionally a particularly "sexy" area, Mr Cheliotis from the TCBA notes that some firms are starting to get savvy and personalise things, instilling their brands with a bit of personality through creativity marketing campaigns. “At the moment they also need to be focusing on reassuring and developing trust in the ethics and credibility of their bank,” he said.  

Mr Dovey agrees that clients are hunting for substance at the core of the business and that brand is a central aspect of this. “All firms that think it is a lick of paint and a new logo are finished," he said.

Wealth management firms can learn from luxury brands. Mr Lawson believes that keeping close to their clients by building an open conversation with them and reacting quickly to what they're saying is essential. “With a concerned and confused audience, brands that work well are those that efficiently communicate and differentiate an organisation's values,” said Mr Lawson.

In Scorpio’s view, no one firm in wealth management has yet managed to get to the level of customer loyalty that is experienced in other market sectors. “One of the best examples is Apple, where typically when you become a client you are unlikely to shift loyalty and you are very likely to promote the brand to your associates. In our view, there is a similar opportunity in wealth,” Mr Dovey concluded.

The credit crisis has highlighted that brand is not always in control of the firm and while it can take years to build a successful brand, it can be damaged or destroyed in an instant. However, this is no excuse not to try and firms that develop, clearly communicate and, more importantly, live up to strong brand values that their clients identify with, will have the edge.