View more on these topics

Laying the foundation for an IFA brand

IFAs can take on the banks by developing a strong brand image of their own, says SPS M&C director Simon Parker.

Brands are becoming increasingly important as competition soars and new alternatives arrive on the market daily. Why? Because people feel better protected with products that carry a well recognised brand name and, after all, the parent com-panies of these brands have spent millions positioning their particular trade marque away from all the others in the crowded marketplace.

Take Virgin, for example. While its trains reportedly do not always run on time, the company enjoys one of the highest brand loyalty standings in the UK. The gulf between reality and the projected image can be vast, so it is easy to understand why so much time, effort and money is pumped into devising a brand strategy to keep the brand’s integrity, recognition and chosen values.

As intermediaries, IFAs have always been behind other financial institutions and organisations, which have developed defined core values and brands that the consumer has bought into. Shaun McIlrath, creative director of advertising agency Heresy, says: “For many consumers, perception is reality. Especially when you are dealing with a product that is phy-sically intangible.

“Brand advertising plays a huge role in creating a sense of security, authority and reliability. But the physical experience may, ultimately, be an intermediary-experience and intermediaries are not yet a brand – they are a collective of organisations, bound in the consumer’s mind by a vague notion of ‘independence’ but contradicted by a legacy of years of bad press.”

Martin Roll Associates director Martin Roll made the following comments in a recent article: “The corporate brand is the overall umbrella for the corporations’ activities and encapsulates its vision, values, personality, positioning and image among many other dimensions.

“Think of HSBC, which has successfully implemented a stringent corporate branding strategy. It employs the same common expression throughout the globe with a simple advertising strategy based on the slogan, The World’s Local Bank. This creative platform enables the company to bridge many cultural differences and to portray many faces of the same strategy.”

The public can be swayed into believing that financial institutions deliver well researched and well thought out financial advice. Yet, as McIlrath suggests, research has shown that the image of the IFAs is far removed from the sleek, projected brand imagery of the leading banks and institutions that form their main competition. One IFA said that starting in the industry was a massive uphill struggle: “Most people are sceptical, at first, at even listening to an independent financial adviser, let alone actually heeding their advice and letting them make investments on their behalf. There is just a general doubtfulness about the whole industry, mainly because it does not have the sanctity of a recognisable brand image.”

McIlrath believes that the industry’s often self-created complexity is a huge problem. He says: “Consumers believe that if someone is confusing you, they are trying to rip you off. The industry needs to unlearn its own jargon. Banks perform complex tasks but they have learned not to confuse consumers with them – instead they show consumers a nice black horse galloping across a field and they feel safe. It is not rocket science. In the last year, I have seen some great new initiatives – The Naked Adviser was excellent, from a consumer’s point of view.

“Compliance and regulation are here to stay, you can moan about it or you can embrace it and turn it to your advantage. It is about making consumers feel safe and, from everyone’s point of view, that is a good thing.”

What can the IFAs do to be perceived as real competition and a credible alternative to the banks? Jacqui Lennon, director of advertising agency WAA in Birmingham, suggests that IFAs need to create a real point of difference between themselves and the banks. She says: “They need to display a set of criteria that elevates them to a higher plain. It may be that their advice is independent, that their knowledge is greater, that their return on investment better. These are all good quality indicators of a better service.

“However, the consumer likes to be bound up in cottonwool and feel mothered. Thus the overall brand would need to be one of comfort and security – a position that banks have capitalised on well themselves.”

The banks have realised too, although it has taken them an eternity to get there, that the customer relationship is critical. Director of ICLP (International Customer Loyalty Programmes) Tony Clarke says IFAs have a mountain to climb to try and persuade the consumer to switch their allegiance away from banks to independent advisers, not, as he points out, on the quality of advice but because their customer retention is still, on the whole, founded on inertia and a reluctance to change the bank relationship, avoiding the typical inconvenience of change.

But he does believe that the tide is turning slightly and that consumers are now showing a willingness to trust new entrants to the market. Clarke says: “The internet banks have managed to steal market share, as have retailers such as M&S and supermarkets Sainsbury’s and Tesco. However, these companies already have very strong reputable brands, once again emphasising the need for the industry to develop a strong one of their own.”

Perhaps, now is the right time for the IFAs to stand together and collectively develop a brand that is universally recognised and respected.

McIlrath says: “The time is most definitely right for the IFAs to build a brand. A well respected brand will open a lot more doors for them. But don’t play the same game as the institutions – you need to stand out, not blend in. There is currently no big brand in the marketplace that actively represents the consumer – that champions the consumer’s point of view, that fights on their behalf . That would be a good place to start. After all, when you think about it, that turf is the industry’s birthright.”

Recommended

L&G offers protection

Legal & General has established the protected capital and growth plan 2, a FTSE 100 linked guaranteed equity bond that provides a full capital return plus s minimum level of growth after six years.

Amex signs up four more IFAs

American Express Financial Services Europe has signed up four new IFAs for its wrap service.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com