1.
The Importance of Brand in the Asset Management Industry
Presentation prepared for Financial Services Forum.London, 25th June 2015.
The importance of Customer Experience in driving Brand Value 2.
How Brands drive business value
3.
How Brands drive Business Value
Brand Value
Brand Contribution
Branded BusinessBranded Business
Value of a single branded business operating under the subject brand/trademark
Brand Contribution Total economic benefit derived by a business from its brand
Brand Value Proportion of brand contribution which can be legally transferred via sale or licensing, i.e. the trademark (value in league tables).
What are we measuring?
4.
Brand Investment
Brand Investment
Brand Equity Brand Equity
Brand Performance
Brand Performance
BusinessPerformance
Brand Equity
CustomerBehaviour
• Investment rating
• Charging basis
• Marketing spend
• Service quality
• Distribution profile
Brand Drivers
BrandedCustomerExperience
$
• Functional(quality, price)
• Emotional(image, trust)
• Net cash flow
• Assets under management
• Fees
• Invest
• Hold
• Recommend
• Loyalty
• Awareness
• Preference
How Brands drive Business Value Managing the linkages across the brand value chain
5.
7.8
7.0
8.2
8.3
7.0
7.9
8.1
7.2
+ 0.4
+ 0.8
+ 0.4
0 5 10
Relationship
Loyalty
Quality Service
Brand
Price
CSR
Offer
Products 21%
Driver Importance
Brand investment expected to influence drivers in the following way
Driver Performance
20%
16%
13%
10%
9%
9%
3%
PotentialUplift
Brand Equity Statistical Relationship Business Value
R² = 0.8524
Market share
Brand equityCurrent Business Value
Uplift from Brand Investment
Cost of Brand Investment
Potential Business Value
For illustrative purposes only
How Brands drive Business ValueStrong brands drive market share and value
The importance of Customer Experience in driving Brand Value 6.
Brand Finance League Table results
7.
The strongest brands have the strongest business performance
0.5
1.0
1.5
2.0
2008 2009 2011 2012 2014
Brand Finance - Top 10Brand Finance - Top 100Brand Finance - Top 500S&P 500
8.
Banking Brand Values 2015 (US$bn)
2015 2014 BV% BV $m
Retail 407 388 +5% +19
Commercial 202 166 +22% +36
Investment 95 103 -8% -9
Wealth/Asset Management 66 68 -4% -3
Wholesale 61 64 -4% -3
Credit Cards 58 52 +11% +6
Other 19 18 +6% +1
Mortgages 12 15 -18% -3
9.
Brand Value
BV % change
Brand Rating
1 UBS 8,068 27% AA+
2 Deutsche Bank 4,781 -5% AA
3 Morgan Stanley 4,684 7% AA
4 Credit Suisse 4,445 -11% AA
5 Wells Fargo 4,361 24% AAA-
6 Merrill Lynch 3,606 -5% AA-
7 J.P. Morgan 2,870 28% AA
8 Royal Bank Of Canada 1,938 24% AA
9 Goldman Sachs 1,502 -48% AA+
10 Scotiabank 1,315 AA+
Wealth / Asset management BVs in Banks
10.
Asset Managers by AUM 2015 (US$bn)
AUM 2015
1 BlackRock 4,770
2 Vanguard Group 3,149
3 State Street Global Advisors 2,440
4 Fidelity 2,025
5 Allianz Asset Management 1,949
6 J.P. Morgan Asset Management 1,760
7 BNY Mellon Investment Management 1,740
8 PIMCO 1,590
9 Credit Suisse Group 1,420
10 AXA Group 1,383
Source: http://www.relbanks.com/rankings/largest-asset-managers
11.
Relationship between Brand Value and AUM
12.
13.
Natixis
Toronto DominionSchroders
Royal Bank of Canada
T. Rowe Price
Commonwealth Bank Of Australia
Resona Bank
NordeaInvescoBlackRock
BNP Paribas
SEB
Banco Sabadell
Morgan Stanley
The Bank Of New York Mellon
Wells Fargo
Macquarie
JP Morgan Ameriprise FinancialFranklin Templeton Investments
HSBC
State Street
Northern Trust
Janus
Deutsche BankDeutsche Bank
Lazard
Goldman SachsBBVA
Credit Suisse
UBS
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
-4.00% -2.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00%
AU
M Y
oY G
row
th
BSI YoY Growth
• Seed sowers: Raising brand awareness and strength to capitalize on the rebound
• Despite market appreciation, their AUM did not grow due to low existing brand strength
• Brand strength and AUM growth go hand -in-hand
• Positive brand awareness is a crucial component in brand strength
• Greater brand strength will bring in new inflows
• Further investment in brand strength required to maintain AUM growth
• Market appreciation and high existing brand strength have contributed to AUM increase despite decrease in BSI
Brand strength and AUM growth go hand-in-handThose who invest in the brand will reap new inflows
The importance of Customer Experience in driving Brand Value 14.
Brands in Asset Management
15.
Market experience since the Global Financial CrisisNet new flow has been low but is gradually rising
• Market appreciation has been the biggest contributor to AUM increase• Net new flow has been low – investor confidence has been weak• However, as the financial market recovers, investor confidence is returning• But how much will your brand reap?
16.
• Brand > Product & Performance• When a potential client receives a sales call from an Asset Management Company,
brand recognition is essential• There needs to be a pre-established association between the Asset Management
brand in the client’s mind before even receiving the call
Hi, this is ABC Asset Management Company. Would you be interested in hearing about our products?
Brand awareness firstThe key to the first gate
Yes, let’s have a meeting and hear what you have
to offer
Client has existing positive brand
awareness
No, thank you.
Client does not have any brand awareness
17.
Business relationships crucial to brand value growthIn the retail business, intermediaries hold the key
• The purchasing of a mutual fund by an individual retail client is broken down thus1. Retail client visits an intermediary to purchase fund product2. Intermediary recommends the ‘hottest’ funds in the current market, reinforcing positive brand
associations in the client’s mind
• The ‘hotness’ of a fund is made up of more than just asset allocation and investment track record• The business relationship between the intermediary and the Asset Management Comnpany is as
important to the ‘hotness’ indicator of the fund• i.e. Quality of promotional/educational seminar sessions, business outings, etc.
What the client already thinks of the brand
What the intermediary thinks of the brand
Net client brand awareness
18.
• 20 years ago, ‘Asset Management’ did not exist in Korean Finance
• Fidelity was the first to invest in expanding its brand and industry awareness
• After 3 years, the Korean market came to know the brand and the industry
• Since then Fidelity has emerged as the top asset manager brand in Korea
Case Study: FidelityPioneer in the Korean Asset Management Market
19.
Growing strong Asset Management brands as the market recoversCapturing organic growth
• The global economy is rapidly recovering, with investor confidence steadily returning, particularly in the UK post-election honeymoon
• As spring returns to the industry, asset managers should begin investing in their brand strength in order to capitalize on the recovery in confidence
• Returning investors will turn to the ‘top-of-the-mind’ brands
The importance of Customer Experience in driving Brand Value 20.
Setting marketing budgets?
21.
21
Time
Sale
s
1. Short Term, “New”, Advertising Sales (from current and recent advertising)
2. Medium Term Repeat Purchases (“Secondary” Ad Sales)
Long Term “Conversion”
Advertising Measured by Brand Preference
What Drives and Sustains the Long Term “Conversion” Effect?Brand Finance’s approach to marketing ROI seeks to address and understand the short, medium and long term impact of brand building and advertising
22.
22
0%
10%
20%
PUSH: Operating Factors
+
Underlying Consumer Brand Preference and understanding the health of the brand in the long term is typically measured using drivers research.
Price, promotion and distribution effects in the short term are typically measured using marketing mix modelling techniques.
PULL: Consumer Demand
Overall Sales (e.g. number of accounts,
funds on deposit)
Sales Performance is the product of short & long term drivers
23.
23
TACTICAL
Geared to supportinglong term brand values:image, awareness
Longer term payback (typically 3 years)
Gives REASON to buy your brand
“BRAND PULL” activities
Targeted to stimulateimmediate Sales: Promotions, Distribution Drives
Should be expected to pay back within 12 months
Gives INCENTIVEto buy your brand
“BRAND PUSH” activities
STRATEGIC
Strategic v Tactical Marketing SpendMarketing spend can be divided into strategic (“Brand Pull”) and tactical (“Brand Push”) activities:
24.
24Segmented analysis allows for improved Resource Allocation and Strategy
Brand Segment Market Attractiveness
Brand Strength
IndexMarket Share A&P Brand Value ($)
A 1 76 55%
A 2 65 15%
A 3 48 12%
B 1 37 5%
B 2 43 5%
B 3 33 8%
Illustrative example
25.
Contact usDavid HaighChief Executive
Brand Finance, London
E: [email protected]: +44 788 515 3725
3 Birchin Lane,London,EC3V 9BW
Brand Finance is the leading brand valuation and strategy firm, helping companies to manage their brands for improved business results.
www.brandfinance.com