Mike
Moodie, head of RBC Wealth Management UK, discusses how being Canadian
has helped the firm – and its peers – gain valuable brand traction.

As they jostle to stand out from their peers in an increasingly
crowded marketplace in developed markets and break into new, emerging
ones, wealth management firms are becoming ever more aware of the
importance of having a strong, trusted brand. Recent years have however
caused a big shake-up in the brand stakes, and it may surprise some
readers to know that Canadian firms are a standout group which are
rocketing up the rankings.

A key measure of the winners and losers in terms of banking brands is
the BrandFinance Banking 500, which compares and ranks the world’s
biggest institutions in terms of their brands’ values (BrandFinance
uses the “royalty relief” method to calculate how much a bank would
have to pay to lease their brand if they did not already own it.)

The headline from this year’s ranking was that Bank of America had fallen off its pedestal as the world’s most valuable banking brand to be supplanted by HSBC.
The other big news, however, was the ascendancy of brands from China
and Canada, with the performance of banks from these countries standing
in stark contrast to their European counterparts. Driven in large part
by the economic woes of the eurozone, European banking brands saw their
halos slip to the extent to which banking brands from the BRIC countries
(Brazil, Russia, India and China) now outnumber their European
counterparts among the top 20 banking brands, and 16 out of the 20
“fallers” in the table were European brands.

Big wins for Canada

While Canadian banks in general stood out as winners in the 2012 Banking 500
rankings, by far the biggest success story was a bank which is
increasingly on the radar of high net worth clients all around the
globe: Royal Bank of Canada. And its wealth management business is
wasting no time in hammering home its advantage in numerous markets as
it expands, says Mike Moodie, head of RBC Wealth Management UK. In one
huge expansionary move, earlier this month the firm announced that it
was to acquire the Latin American, Caribbean and African private banking
business of Coutts, the wealth management arm of Royal Bank of Scotland
Group.

Having embarked on its first global advertising campaign aimed at the HNW and their advisors last autumn,RBC Wealth Management will no doubt be delighted that this year its parent bank was the biggest climber in the Banking 500
rankings, rising from twenty-eighth place in 2011 to just nudge into
the top 20 for the first time. For Moodie, RBC’s entrance into the top
twenty biggest-hitting brands is no surprise, forming as it does, part
of a global raising of awareness about Canada’s banks.

"The BrandFinance results definitely reflect what we're hearing in
the market at the moment: that potential clients and employees alike are
attracted by our strong brand. An important part of this attraction is
due to our Canadian heritage, which I'm sure explains why the other
Canadian banks also fared so well in the report,” said Moodie.

The issue of valuing brands is of course a complex one, but one part
of the puzzle is the brand strength of a financial services
institution’s home country.

RBC Wealth Management’s new multi-year global ad campaign is “very
much about building awareness of RBC as a top-ten wealth firm,” Mark
Fell, head of strategy, brand and marketing at RBC Wealth Management,
has previously told WealthBriefing. (The firm was ranked sixth globally in Scorpio Partners’ KPI Benchmark Report for
2011.) But while this is an important accolade and foundational to the
campaign, it is mainly a “broad awareness campaign playing up the
strength and stability of both Canada and RBC in these uncertain times",
Fell said.

It is these perceptions of strength and stability which are
doubtlessly what is behind the ascendancy of Canadian banking brands in
this year’s Banking 500 rankings: Canadian banks were some of
the best performing, with four of the five brands gaining the most value
being Canadian. In fact, Canadian financial institutions are now
generally very well-regarded internationally due to the strength of the
country’s financial sector, which thanks to prudent regulation and
conservative investment practices weathered the crisis markedly better
than those of the US and Europe.

Moodie highlights two examples of the global recognition of the
country's stability, citing how Canada has been rated top for the
soundness of its banking system for four years in a row by the World
Economic Forum, and pointing to the appointment last year of Mark
Carney, Governor of the Bank of Canada, as Chairman of the G20's
Financial Stability Board.

Expansionary moves

The producers of the Banking 500 said in their report that
RBC has been provided with a good opportunity to take its brand overseas
and capitalize on a “cautious approach to banking which is a very
strong selling point of any brand when trust in banks is low.” But it
would seem that the bank’s wealth division is, as they say, well ahead
of them here.

In recent months Moodie has really been clocking up the air miles to
promote RBC Wealth Management in international markets, with the Middle
East being a particular focus. And when it comes to the Canadian banking
story, and RBC Wealth Management, clients both in the ME and elsewhere
are “all ears”, says Moodie.

Moodie says that many of the clients and prospects who he met in the
Middle East had never heard of RBC before, but ironically this is
actually a good thing, as it “means that they hadn’t been hearing bad
things” (referring, of course, to the government bailouts and scandals
to have hit many of the world’s biggest banking names in the past few
years).

For Moodie, now is a great time to make sure that high net worth individuals in new
markets like the Middle East have heard about RBC. For him, it’s natural
that wealthy clients should be looking at the strength of a wealth
manager’s parent bank, and its domestic banking system when considering
where to park their money. “People are certainly taking note of parents’
credit ratings”, he said, adding that “money will certainly move from
where it feels insecure to where it’s secure.”

Like its main Canadian competitors, Toronto Dominion, Scotiabank and
Bank of Montreal, RBC could be said to be reveling in a reputation for
conservatism, although pre-crisis this approach was met with a certain
degree of scorn by some. Hindsight has proven Canada’s banks right to
have avoided some of the “racier” investments which US and European
banks fell foul of during the crisis, but there was a time that RBC came
under scrutiny for not taking advantage of some of the (seemingly)
lucrative opportunities which were out there, he explains.

However, there is more than just the enviable strength of Canada’s
banking system behind the buoyant mood at RBC Wealth Management,
explains Moodie. “We believe that we have the greatest opportunity to
take advantage of this international recognition thanks to our position
as Canada's largest financial institution, and as the only major
Canadian bank with a global wealth management division,” he said.

The wealth management push

Conservative RBC may have been, but shy about its intentions to
expand internationally it is not. Along with its capital markets and
asset management divisions, “the bank has been very public about getting
behind wealth management”, says Moodie, adding that “the growing
strength of the RBC brand outside of North America is a fantastic asset
to have as we look to expand our wealth management business in
competitive markets including the UK."

RBC Wealth Management’s expansionary drive in the UK has been
particularly marked in the past year or so: a few months back the firm
moved to plush new London headquarters at Riverbank House. In fact, the
UK has become a stand-alone area of focus at the firm next to Canada,
the US and emerging markets, and the firm plans to triple its number of
relationship managers in the UK to 100 by 2015.

Although RBC is clearly going after a diverse client base, it may be
surmised that the firm is snapping up expat US citizens who may be
disillusioned with the Wall Street giants, but who also need a wealth
manager which is on good terms with the SEC and is not “running scared”
from the somewhat draconian measures coming in under FATCA.

In fact, RBC Wealth Management views FATCA as an opportunity rather
than a threat since it already has the expertise in place to deal with
the legislation while many firms are withdrawing services for US
citizens rather than deal with the added compliance headache they bring
with them. The fact that US expats may become “homeless” due to FATCA
has been discussed at length by this publication, and it is certainly
refreshing to hear a firm talking about FATCA as an opportunity for
growth rather than a cause for hand-wringing.

With regards US clients, RBC Wealth Management is in many ways in an
enviable position of being “at one” with US compliance, but without the
slightly tarnished reputation of some big US firms, so many of whom
played fast and loose with the US housing market and came off the worse
for it. We should also consider the “US brand”, which despite still
being the world’s number one nation brand in BrandFinance’s rankings has
been on the wane. In brand terms the US had a very bad year in 2011,
losing over half a trillion dollars in value and being downgraded from a
brand value of AA to AA-.

Significantly, the US now has a nation brand rating lower than Canada
– yet another fillip to Canadian institutions which are looking to snap
up market share. The Wall Street giants may not like to hear it, but
RBC’s brand is riding high off the back of being North American, but not American.