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Investing in brands pays off when attracting advisers

Tupperware is my nightmare. Ok, that and my trolley suitcase, as I am often reminded by a friend who once enjoyed a violent (pathetic) outburst as I wrestled unsuccessfully with its narrow wheel base.

But my luggage comes second to the horrors that lurk behind one particular swivel cupboard in my kitchen. A dystopian mountain of mismatched lids and discoloured plastic pots. No lid fits any container and the ones that are supposed to belong to one another no longer click. It is a graveyard of failed marriages and, worse, first dates. I shudder. Yes, it is irrational – but so is much about business.

As much as our latest research into provider support for advisers points clearly to the positive impact investing in the hard stuff (the combinations of business and technical support that is scarce but valued) has, it would be churlish to suggest that marketing is not still a powerful driver. It is.

This is underlined by the number of brands advisers spontaneously associate with excellence in delivering adviser support, in spite of the fact that, when getting down to the nitty gritty, they do not perform anywhere near as strongly.

Therein lies the power of the brand which is both a blessing and a curse. Yes, the halo effect can sustain you through troughs in service delivery but there are inherent dangers. High expectations met with poor delivery can have a profoundly damaging impact. And quickly. It is well documented how instantly great reputations can be ravaged versus the time it takes to polish them back up. But brands remain at sixes and sevens.

What is remarkable when we take stock of our brand equity scores is how unremarkable most players are in the eyes of advisers.

The proportion of advisers scoring providers and platforms at six or seven out of 10 highlights an undeniable collective “meh”.

Two things are clear. First there really is little to separate most in the market, reflected in the small points of difference between at least two thirds of providers. Second, very few stand out; certainly positively.

This tacit safety-first doctrine  acts as a big, warm security blanket that allows brands to be average and survive. A luxury afforded to very few industries. But it is a dangerous assumption to rely on a collective malaise that could (however unlikely) be disturbed.

Phil Wickenden is managing director at Cicero Research

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