Tuesday, July 21, 2020 Stamford, CT USA — At a time of social upheaval and heightened market volatility, institutional investors are turning to asset managers with the most trusted brand names.
New data from Greenwich Associates shows that manager brands are rapidly gaining influence as part of institutional investors’ hiring decisions. As recently as 2015, only quarter of the investors said brand strength was an “important” or “very important” criterion in their manager selection process. That share climbed to 40% by 2019 and has likely increased further with the onset of the COVID-19 crisis and related scrutiny over corporate actions and social responsibility.
A new Greenwich Report, Purpose-Driven Branding: What Crises Teach Us About the Power of Finding Your Authentic Voice, analyzes the increasing importance of brand, and examines key building blocks and techniques that leading firms employ to enhance their brands. “Best-in-class managers are using content marketing and other intellectual property to position their firms as trusted sources of advice on investment policy and strategy while simultaneously showcasing purpose-driven, authentic leadership that sets them apart in times of uncertainty,” says Greenwich Associates Managing Director Andrew McCollum.
Why Purpose-Driven Branding is the New Standard
The COVID-19 crisis and continued tension regarding racial injustice around the world has significantly increased the importance of brand purpose, brand authenticity, and strength as part of institutions’ decisions about forming or maintaining commercial relationships with asset managers and other suppliers. This trend is amplified by the evolving digital ecosystem that enables clients and potential clients to learn a great deal about an organization independently.
“Institutional investors today are exposed to vast amounts of information that color their perceptions of individual asset managers—even if they have never had a sales call,” says Andrew McCollum. “With pandemic restrictions limiting investors’ ability to hold face-to-face meetings and otherwise conduct due diligence, institutions are less likely to hire an unfamiliar firm – or a firm whose values and guiding principles do not align with their own ideals.”
For this reason, asset management organizations lacking a ‘North Star’ vision – a relevant, client-focused, and actionable reason for being – will struggle to stand out as industry leaders and the recipients of new asset flows in the days, months, and years ahead.
Building Trust and Loyalty with Content
Best-in-class managers are using strategies and tools to build and curate trustworthy brands – a characteristic that Greenwich data shows to be positively correlated with both overall relationship quality and perceptions of excellence across several important service and investment attributes. One of the most tangible ways that firms have worked to accelerate the process of building trust is through the development and distribution of high-quality, unique and value-added thought leadership. In addition to building brand awareness, good content marketing establishes a voice and a perspective that is viewed as authentic and differentiated. Over time, clients, potential clients and consultants will begin to think about the best thought leaders as trusted advisors, as opposed to providers.
“With trust comes a brand reputation that commands attention and loyalty over the long term,” says Andrew McCollum. “And with a strong, trustworthy brand, the world is your oyster.”