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> Marc Erzberger, Egon Zehnder International, Geneva

Rebuilding Trust in Asset & Wealth Management

The importance of strategic marketing in reviving the brand and client connection
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Kathy Krone
> Kathy Krone, Egon Zehnder International, New York
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The major upheavals that have recently shaken global financial markets are unlike anything experienced in decades. While short-term measures have focused on bringing stability and confidence in the overall financial system, it will take time and an unrelenting client-centric approach for firms to rebuild trust with their clients. As asset & wealth management firms go about rebuilding that trust they could benefit from adopting an approach that has been a key to success in customer-centric industries like consumer goods and services. That approach: strategic marketing.

Now is the time to start the shift from short-term reactive measures to longer-term capability building. In particular, CEOs need to rethink strategic marketing to enable their organizations to thrive in the continuously turbulent environment of the future. Forward-thinking firms that make carefully-selected investments in strategic marketing have the opportunity to re-position themselves and make substantial gains.

The Drivers of Strategic Marketing

Strategic marketing is a comprehensive approach that entails specific capabilities that when consciously developed and integrated help create and maintain a powerful connection to clients. To get a clear view of those capabilities, Egon Zehnder International recently conducted a series of interviews with executives in representative asset & wealth management firms about the challenges they face in building strategic marketing to reposition their brands and build enduring relationships with clients. From those discussions and our own experience, eight key drivers of strategic marketing emerged:

1.Influence: Effective strategic marketing should directly influence business strategy with a voice in key management decisions impacting firm positioning, client development, distribution strategy and product strategy. But as many of our interviewees indicated, their firms tend toward an inward-facing, product-centric approach, which frequently results in a serious disconnect with client needs and/or expectations.

2.Role: Marketing is at the center of driving the firm’s customer focus and brand positioning; however, the role varies substantially between manufacturers, manufacturer/ distributors, and wealth management firms. Only a few firms truly practice strategic marketing whereby marketing takes the lead and strongly influences innovation across the value chain. In others, where Marketing is relegated to tactical execution such as collateral development and website management, the impact is not achieved.

3.Integration: Integration means embedding marketing into each business channel with the corporate leadership team. Many organizational structures today do not enable close collaboration between marketing, product development, sales, and client relations teams to craft and execute a consistent and compelling value proposition.

4.Innovation: Highly-evolved strategic marketing results in customer-led and customer-focused new business ideas. The product-centric culture inherent to asset & wealth management often leads to a limited role for innovation from marketing. Further, the product innovation success rate in the industry compares poorly with consumer industry standards.

5.Resources: While there is clear pressure to reduce cost in the current environment, selective and compelling investments in marketing capability-building, targeted programs and resources are critical to repairing substantial brand damage and loss of trust.

6.Measurement: Winning a place at the table for strategic marketing depends, in part, on being able to quantify and communicate the value of marketing investments, something that many marketers struggle with. They can fall into a production pattern and fail to establish metrics that define success or trigger a call for redirection of strategy.

7.Client Insight: Adept strategic marketers achieve deep understanding of their clients and harness client data to provide actionable client insight. Many asset & wealth management firms do not invest adequately in customer insights and analytics that could better target strategy, product development, and the strengthening of client relationships.

8.Talent: As in most business disciplines today, when competitors are otherwise equal in resources, talent is the ultimate differentiator. However, marketers in asset & wealth management often lack the necessary skills to exercise real influence at a CEO and Board level.

It is by developing and enhancing these key drivers that ambitious asset & wealth management companies can differentiate themselves from their competitors.

Where Does Your Firm Stand?

To help you benchmark where your organization stands, Figure 1 provides a “strategic marketing maturity" model. Although this model does not reflect the specific and complex problems facing individual asset & wealth management companies, it does allow you to see where your firm stands in terms of each of the eight key drivers of strategic marketing. Is marketing a business priority for top management? Is marketing embedded into every aspect of the business with C-level leadership? Does marketing lie at the core of the firm’s customer focus and does it shape business drivers?

Table 1: How does your firm score on the eight key drivers?



Taking Action

Driving a more client-centric culture and strategy requires simultaneous attention to a number of drivers to ensure the powerful alignment of marketing’s influence, intentions and capabilities. It requires both a top-down and a bottom-up component:

The CEO Mandate: CEO and senior management must clearly support and implement a relentless ‘outside-in, client-centric’ approach. This involves positioning marketing as a strategic partner to senior management, giving marketing a clear and visible mandate, positioning marketing as the driver of value, growth and advantage; and investing appropriately in marketing capacity and resources.

Empowered marketing leaders: Reflecting on the critical role played by the marketing leaders and their key reports, it is clear that the skills, experience, and competencies required to succeed in this function have become more complex. In our view, the next generation of world-class marketing leaders in asset & wealth management will be defined as results-oriented leaders with strong commercial acumen, who can catalyze change within an organization and exercise influence at the highest levels. In addition to having a global perspective and technical expertise, tomorrow’s marketing leaders in asset & wealth management must be strategic thinkers with the people skills to foster collaboration across the organization and maximize the performance of their teams.

Laying the Foundations for Long-Term Success

Tomorrow’s successful asset & wealth managers will be those who reflect upon the market’s current crisis of confidence and grasp marketing’s potential to understand and meet client needs. Moreover, they will take action to redefine marketing in their organizations as a driver of value and growth, the client advocate, an innovation leader and a functional area meriting greater investment and attention.

Now is the time for repositioning and preparing for the next growth phase. But this groundwork must be done thoroughly and intelligently, not only by investing in top marketing talent, but by creating an empowered environment. It is largely up to the CEO to make this happen, along with the marketing leaders, of course, who must show the way in reconnecting clients and brands.