The Power of Branding for Financial Advice Firms: Making Your Mark in a Competitive Landscape

When you think of leading brand names, which companies spring to mind? Apple, McDonald’s, Amazon, Google? When you think about it, leading brands prompt us to think of the company instead of the sector, which can be important for reputation and consumer awareness. 

The situation is different when it comes to financial services (well, especially in the UK!). Countries like the US fare better with financial service provider brands, recognised global brands such as JPMorgan, Morgan Stanley, Goldman Sachs and Citigroup standing out. These are instantly recognisable, but UK financial firms rarely feature in international brand awareness league tables.

The article highlights the importance of branding for building trust, credibility, and a unique identity, especially in an industry that often lacks a strong brand presence. It outlines the potential risks and rewards of branding, citing real-world examples and case studies of financial service providers. The article discusses how effective branding can be a game-changer in the financial services sector.

Branding and Marketing: Are They Optional?

This brings us on to the common misconception that branding and marketing are optional for financial services firms in the UK (even more so for small to medium-size companies) – why would they be?

Ad spending is now eclipsed by customer opinion, giving you the chance to leverage your reputation as part of your branding. The Internet (in particular social media) has levelled the marketing playing field therefore you don’t need a huge budget. Environment, Social and Corporate Governance (ESG) are also a crucial part of modern-day branding. An appreciation of your role in the wider world encourages customer trust and loyalty.

You might be a small to medium sized financial services company, specialising in particular products, locations or looking for broader appeal, but don’t forget, online promotion and word-of-mouth are powerful marketing/branding tools. The benefits can be long-lasting, lucrative and help to cement a place in the hearts and minds of clients.

For some reason we overlook financial service provider brands – it doesn’t make sense!

Breaking the Stereotype: Why Branding Matters

The common perception is that branding and marketing are only relevant to consumer-orientated businesses. This is the kind of misunderstanding which could cost your company dearly in the future. For example, research by PwC shows that companies with a strong identity outperform their competitors by 25%. So where does this leave the financial services industry?

You could argue that branding is MORE important for the financial services industry after the publication of a recent survey by YouGov. In the “Who’s Got the Best Reputation?” survey, the financial industry scored a shocking last place out of 26 sectors. Yep, the sector even managed to outdo gambling – you know, that thrilling game of chance where you’re never quite sure if your lucky rabbit’s foot will do the trick.

So, it is not only important but in many ways critical for financial advice firms to create an identity. A recognisable brand that makes them stand out from the wider industry. Branding and marketing go beyond logos and colours, offering the opportunity to establish a unique identity and convey the company’s core values. In the ultra-competitive world of finance, financial advice providers can benefit immensely from a strong brand.

Building Trust and Credibility

Trust and credibility are earned, not bought (mostly!well, not in the normal course of business), based on the inner workings of your company and not a public façade. While both are an essential part of any business reputation, the value of trust is sometimes underplayed.

Building trust

• Humanity – show that you are human (not an AI bot)

• Capability – you don’t just talk the talk; you can walk the walk and even walk whilst you talk 😉

• Transparency – honest and upfront, everything is out in the open

• Reliability – delivering on your promises

• Integrity – the customer’s interests always come first

• Communication – avoid confusion, let your clients know what’s happening

Building credibility

• Demonstrate credibility – make sure you know what you are talking about

• Social acceptance – social media accounts are not for show; give something back to visitors

• Maintain a consistent online/off-line persona – fakes will eventually be found out

• Are you in with the in-crowd? – mixing in similar circles helps to improve your reputation

• Inspire with positive messages – be realistic but avoid negative tones in your messaging

• Build relationships – a conversational style with clients/would-be clients is crucial

• Invite discussion and different views – nobody likes a dictator

• It’s not all about you – take an active interest in those who reach out to you

• Establish your areas of expertise – content is the key

While these are all fundamental ways of building trust and credibility, good old honesty will always shine through. Whether taking a common-sense approach to questions and queries or putting yourself in the place of a customer seeking advice, avoid sales jargon and focus on straight talk – remember, double-dutch is not a language,

A reputation can take years to make, seconds to break – gone in the blink of an eye!

Straying from the company line can be damaging

Coutts Bank’s recent escapades serve as a vivid reminder of the tightrope companies walk in maintaining their image. With a history of catering to the wealthy elite, Coutts chose the shadows over the limelight. But, alas, venturing into the public eye proved risky. What once held an air of mystery now faces the spotlight, highlighting the delicate dance between brand secrecy and reputation management.

The fallout from the spat with Nigel Farage forced the company to discuss clients and operational intricacies in public – shock, horror, unheard of in the bank’s history. Has the veil of secrecy been partially removed? Will this previously private operation be drawn further into the public domain? Are these developments at odds with the company’s reputation and branding – built around privacy?

Time will tell whether the Coutts brand name has been damaged, but this does demonstrate the potential dangers of stepping away from the norm and into the media spotlight. 

Navigating a competitive landscape

The financial sector has never been more competitive, with many historical institutions under pressure from the new kids on the block. The competitive landscape takes numerous forms:-

• • New investment classes, such as digital assets

• • FinTech – combining the latest technology with the world of investment

• • Disruptors slashing costs and targeting established sector leaders

In the current climate, actions speak louder than words, with many FinTech companies providing services we could only dream of just a few years ago. These services, many disruptive and sector-changing, have helped create a brand, rather than vice versa. Consumers are now associating themselves with up-and-coming brands, high-tech solutions, many of which are available on mobile phones and other devices.

Connecting with your target audience

You probably guessed it wouldn’t be too long before Apple would get a mention, the leading “mobile phone” company now dominant in many other areas. If there is a company which knows how to connect with its target audience, it is Apple, knowing when to withdraw and when to feed customer demand. Teasing and creating excitement ahead of product launches and then delivering on their promises, unlike so many other companies.

A perfect example is the recent launch of the Apple Card savings account in tandem with Goldman Sachs. Initially used to deposit rewards from Apple’s daily cash scheme, it is now possible to link bank accounts and add physical deposits. In the first week after going live in April, the company took more than $1 billion in deposits; at the beginning of August, deposits stood at more than $10 billion! 

Buoyed by the success of the savings account, the company now offers credit cards and a “Tap to Pay” service in the UK. This is a perfect example of a company leveraging a trusted brand name, recognised core values and, above all, maximising the reputation as a company which not only talks the talk but does walk the walk. Experts in customer services, whether buying a mobile phone, audio device or the latest company credit card, you know what to expect.

Note: 

While Apple is the best example of a company leveraging its reputation to broaden its range of products and services, it also applies to small to medium-sized companies.

For example, a relatively small trusted pension provider could leverage their existing brand to move into other areas of financial services. This can quickly create momentum, which can open the door to many other opportunities in the future. One note of caution, this type of growth needs to be controlled, protecting the brand and the company’s reputation at all times. Reputations can be fragile, taking years to build but only moments to shatter!

Overcoming marketing hurdles

Historically, many people found their IFA rather than IFAs actively seeking new customers. There was little talk of financial service provider brands, they were just there and introductions tended to be by word of mouth. 

The industry has come a long way since those days; competition has intensified, and companies must now engage in long-term marketing. So where do you start with branding?

Before even considering marketing your existing brand name (or new business branding), you need to confirm your company’s core values. Then there are other issues to look at, such as:-

• • Identify your target audience (client!)

• • Define your brand personality (this is a fun process)

• • Test the reaction of businesses/consumers

• • Launch your new brand

As a new business there are other factors to consider, including:-

• • Creating a list of potential brand names

• • Cutting this down to a shortlist

• • Checking availability

Every pound spent on marketing should focus on your target audience, helping to define your brand with the idea of growing your reputation. You very rarely, if ever, get a chance for a relaunch, so you need to be sure of your core values, target market and brand personality. And, crucially, how you’re going to market yourself – what channels, what spend, what objectives (awareness, new clients, both?).

How do you value a financial services industry brand name?

There are many ways to value a brand name; it depends whether you’re the owner, competitor or somebody looking to buy the company. 

In 2018 the owners of Clydesdale Bank and Yorkshire Bank (CYBG) agreed to buy Virgin Money for £1.7 billion. What seemed a straight-forward deal was anything but, with the brand name effectively held captive by a third-party lol.

While founder Richard Branson (as shrewd as ever!) retained a 13.1% stake in the merged company, he had the best of both worlds! Part of the deal involved an initial £12 million a year licence fee to use the Virgin Money brand name. This increased to £15 million in the fourth year with additional royalties from the fifth year onwards. 

In a demonstration of the power of financial branding, the Clydesdale and Yorkshire brands will disappear in the future, rebranded as Virgin Money.

Case studies: Success stories and financial service provider brands

While there is a temptation to focus on up-and-coming start-ups, there are several established financial services branding success stories.

HSBC

Initially set up in Hong Kong in 1865, Hong Kong Shanghai Bank (now known as HSBC) is a modern-day example of successful branding. Providing everything from investment advice to credit cards, current accounts, insurance products, and more, HSBC has undergone several branding shifts. In recent times the company has taken up numerous positions, including:-

“The world’s leading international bank” 

“Supporting human ambition”

“Together we thrive”

The bank has attempted to, and successfully, switched branding focus in line with changing trends. One of a number of financial service provider brands with longevity, at the heart of the offering is the company’s trustworthiness, clean brand image, professionalism and history. 

Careful expansion saw HSBC acquire an innovative branding/marketing machine with the purchase of First Direct, part of the 1992 merger with Midland Bank. More than 30 years after the company began trading, First Direct is still renowned for its ground-breaking launch advert in 1989. After “hijacking” an Audi TV advert mid-broadcast, the company announced its arrival in a blaze of glory and priceless media headlines! First Direct remains synonymous with great customer service to this day. 

Aberdeen Standard Investments

In the new era of ESG investments, with investors looking for expert guidance in this area, Aberdeen Standard Investments undertook a branding revamp in partnership with the Financial Times. The group campaign was focused on three target audiences:-

• • UK wholesale advisers

• • Institutional investors

• • C-suites of FTSE 350 companies

The company released an “invest today, change tomorrow” campaign, which involved creating and publishing specialist content within an Aberdeen Standard Investments branded environment. The FT was the perfect medium for the advertising campaign, creating brand awareness and informing investors of the company’s core values.

The results were impressive: a 33% increase in awareness, a 45% rise in consideration, and 60% of those who saw the campaign recognised the company as a brand that invested responsibly. Almost 33% of those questioned believed the company was also encouraging others to adopt green policies, placing the company as a sector leader.

This was a lot more successful than the later rebranding of the company name to “Abrdn” (pronounced Aberdeen) – a word to the wise, if you need to educate readers how to pronounce your new company name, it isn’t working.

Conclusion

When it comes to brand awareness, in particular financial service provider brands, it is unlikely that you will get a second chance to make a first impression. You may be able to adapt your core values, to a certain extent, to include modern-day thinking, but moving too far away from your original values can be dangerous. As mentioned above, the financial services industry does not have the best of reputations. Therefore it is vital to differentiate yourself from the masses.

Building a brand and reputation takes time; building trust is not easy, but giving your company a personality in the eyes of potential customers is vital. While the Robinhood investment platform is an extreme example of brand building, robbing from the rich to help the poor, it paid off. The first mass market adventure into the world of commission-free investment, the company has built a very successful business.

If nothing else, this shows the need to stand out, prompting a reaction from those who see your brand name and ultimately placing yourself head and shoulders above the rank and file. Creating a brand with a message and a personality allows small to medium-sized companies to compete with their larger counterparts. The leveraging of existing financial service provider brands has the potential to increase business and create opportunities in other connected areas.

So, financial service company branding (across all business sizes) can make a difference!