View more on these topics

IFAs must join brand band

What have fizzy drinks, light bulbs, hamburgers and expensive cars all got in common? They all use branding to sell more of their products at higher prices. This simple fact of commercial life has important implications for IFAs.

A recent survey by brand consultant Inter-brand and JP Morgan concluded that the top three brands in the world are CocaCola, Microsoft and IBM, which are valued at $69.6bn, $64.1bn and $51.2bn respectively.

These businesses routinely spend millions of dollars to ensure that their brands are alive and well in the minds of their target markets. While this makes fascinating reading to marketing degree students, you are probably asking what this has to do with IFAs.

The answer is survival. Without an appreciation of the value of a brand (and what it can do for your business), you are less likely to be around three years from now – particularly when faced with competition from the big brand product distributors offering consumers something that looks and feels like independent advice.

Talk about how not to manage a brand and the IFA industry makes a good case study. Pension misselling, high commission and Coronation Street&#39s “killer IFA” Richard Hillman are just a few of the images that spring to mind when you mention the words financial adviser to your average focus group.

What has gone wrong with the IFA brand and what can IFA firms, with small marketing budgets, do to redress the balance and create a more positive image for themselves?

First, let us consider branding, how it works and why businesses are taking the issue more seriously. In simple terms, brands work by creating a shorthand for businesses to use to stimulate images, feelings or thoughts in the consumers&#39 minds. Coke means youth, fun and good times, BMW means efficient, stylish and highly engineered and Gucci means exclusive, sophisticated and sexy.

By using a constant stream of advertising, public relations, sponsorship and other marketing activities, big companies seek to create a recognisable, high-profile brand personality associated with their name, logo and products.

What, you might ask, has all this got to do with an IFA firm keeping its head above water in the wake of Sandler, CP121 and CP166? A lot, I would say. The marketplace for financial services is changing quickly. The power of the institutions looks set to increase as they seek to maintain profits by gaining more control over their distribution channels.

But the idea that IFAs will be left to become the Tescos or Asda of the financial services sector is fanciful. We might like to think we are well placed to compete head-on with the distributors of 1 per cent products in the post-Sandler world but we need to take a reality check.

Frankly, the reputation of IFAs is at best unclear and, at worst, downright shoddy. The reality is probably somewhere in between the two. Once the industry at large faces up to this problem, it can begin to consider the options.

I do not claim to have a single, simple answer to the problems faced by the IFA sector. It does not take a genius to see a simple fact that seems to have been overlooked so far – in all the talk about standards, Sandler and CP121, the consumer seems to have been left out.

IFAs need to realise that the definition of winners and losers in the industry will be based on the quality of their relationships with clients and to what degree they can add value to the service they provide. This perception of quality will be the central differentiator between success and failure for IFAs in the brand new world of financial services. IFAs need to become more “customer-centric” and concentrate on their relationship with their clients, as opposed to becoming obsessed with the regulators and the changes that their proposals will bring.

Clearly, IFAs will have to work differently to survive in a more crowded, competitive marketplace.

They need to work together to promote the benefits of quality and independent advice to consumers, who will be increasingly confused by the rise of tied and multi-tied agents posing as independent service providers.

Pooling marketing resources to create a national brand for all IFAs will not be easy, as there is a natural reluctance for IFA firms to work together. However, this co-operation is crucial if we are to ensure that we appeal to customers in the future. Together, IFAs must take the high ground. We may not offer off-the-shelf 1 per cent products for almost every investment need, but we will demonstrate our value through clear savings, sound advice, better value investments and the reassurance that we never sell just for the sake of it.


Life offices say waiver would let them buy equities again

Norwich Union and Standard Life are claiming that applications for solvency waivers from the FSA would give them the flexibility to start buying equities again.There is speculation that the regulator is concerned about the drag of life companies on the stockmarkets and it believes that relaxing the rules will help a recovery in the markets […]

Inter-Alliance joins ScotProv loan club

Abbey National has signed a deal with Inter-Alliance which will see its Scottish Provident mortgage club made available to the IFA&#39s 400 mortgage advisers. Inter-Alliance advisers will now have access to The Mortgage Alliance&#39s 21 lenders, including Abbey National, Bristol & West, Halifax and Woolwich. They will also be provided with free access to the […]

Hanover Life RE appoints new managing director

Reinsurer Hanover Life Re has announced the appointment of David Brand as its new managing director effective from this week. Brand has been a member of senior management of the reinsurer for a decade most recently as deputy managing director. He takes over from Peter Savill, who has been MD since 1983 and is retiring […]

Furore at MVAs on deferred pensions

Life companies have been blasted by IFAs for imposing hefty market value adjusters of up to 27 per cent on the pension pots of people deferring or taking partial retirement.IFAs claim that Friends Provident, Clerical Medical, Norwich Union and Scottish Widows are all guilty of imposing penalties on with-profits pension planholders who choose either to […]

Artemis Monthly Distribution Fund: positioning and outlook

Managers James Foster and Jacob de Tusch-Lec outline the fund’s investment approach and discuss current investment themes and outlook for the bond and equity markets. As James and Jacob confirm, the Artemis Monthly Distribution Fund’s aim is to generate an income from both equities and bonds. They explain their investment approach in each asset class, the sectors where they are […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm