Branding is a Strategic Priority for European Asset Managers


Branding is a Strategic Priority for European Asset Managers

 

Managers throughout the region increasingly focus their marketing efforts on promoting their brand identities


December 2019, LONDON—Cerulli Associates' latest report, European Marketing and Sales Organizations 2019: Harnessing Technology to Win Business, shows that branding is becoming a strategic priority for asset managers in Europe. Cerulli has identified the “five Ps” of an asset manager brand: product and services, people, processes, price, and promotion. Together, these five characteristics form the basis of the definition and perception of a manager’s brand. They are the main factors that fund selectors consider when deciding which managers to work with.


Product proliferation and asset managers’ increasing specialization have led to a decrease in the competitive advantage that firms have enjoyed based just on their products, their performance, and their investment teams. Managers have therefore started to focus on strengthening their brands. They are seeking to promote their vision of the industry and their solutions to the current challenges facing the sector; they want to be seen as experts that can solve complex investment problems. Firms are allocating an increasing level of marketing resources to fostering brand awareness among investors and intermediaries.


“Brand perception is entrenched in fund selectors’ decision-making, but asset managers can make progress if they emphasize the competitive differentiators of their value proposition when building their brand,” says Fabrizio Zumbo, associate director in Cerulli’s European retail research team and lead author of the report. “They should also focus on boosting less tangible values such as client service excellence, which are becoming important brand differentiators in Europe.”


Developing a client-centric culture is a key strand of European asset managers’ brand building exercises. This effort encompasses various facets of an asset manager’s internal operational structure. In fact, whereas client service has traditionally been the preserve of client service executives, managers are gradually integrating it throughout their distribution and marketing frameworks.


Having a strong brand also allows managers to remain attractive long after their funds begin to underperform. When a fund from a manager that is not very well known underperforms and falls out of the first quartile, fund selectors will tend to give it a handful of months at best before excluding it from their portfolios. In contrast, they are more patient with funds from managers with strong brands.


Cerulli believes that managers increasingly need to identify their core values and develop a culture based on client-centricity. These factors are becoming key differentiators and communicating them to both external and internal audiences is a vital part of building a recognizable and effective brand. “Branding is not just an exercise in ticking marketing boxes,” adds Zumbo. “It should be an ongoing, culture-driven effort that runs from the front to the back office with the aim of creating and distributing recognizable and differentiating messages about the company’s core values, culture, and investment expertise.”


Cerulli has computed the scores that fund selectors gave to each asset management firm according to the five Ps listed above and created the ranking of the top-20 brand leaders in Europe. To view the rankings, click here.

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NOTES TO EDITORS:
These findings and more are from The Cerulli Report―European Marketing and Sales Organizations 2019: Harnessing Technology to Win Business, the sixth iteration of this thematic publication.


Cerulli Associates has conducted substantial quantitative and qualitative analysis to provide information and opinion on the European asset management industry and suggest strategies that can enhance firms’ penetration. Marketing and sales strategies and organizations are central to asset managers’ success and firms seeking to enhance and extend the reach of their promotional activities will find much of value and interest in the report.

INTERVIEWS AND SURVEYS:

Cerulli’s analysis is based on proprietary research, including 35 interviews with large, well established international asset managers’ sales teams, as well as request for proposal (RFP) and marketing specialists in Europe. Cerulli also conducted four surveys:

  • A total of 50 asset managers representing €7.6 trillion (US$8.6 trillion) of European mutual fund assets under management (AUM) as of August 2019 completed a survey on the number of salespeople, sales support people, and product specialists they field in selected European countries.
  • A total of 50 asset managers representing €5.1 trillion of European mutual fund AUM as of August 2019 completed a survey on their marketing and social media strategies.
  • A total of 100 third-party fund selectors working at private and retail banks, independent wealth managers and financial advisors, and asset management firms across 12 European countries completed a survey on their perception of selected asset managers’ brands.
  • A total of 23 global asset managers with average AUM of more than US$333 billion across small, mid-sized, and large firms completed a survey on their approach to RFPs.

 

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