The bottom line is relationships
When advising your clients on the best investment options, are you more attracted to the funds with the most well-known brands or do you focus on long-standing relationships? There should be no ‘either-or’ when answering this question.
In any business, a brand merely represents the sum total of the people who represent it. These are not just the people who work there. They can be your clients, your suppliers, your shareholders or even someone who watches your advertisements on TV.
Therefore, to say that the power of an individual wealth manager’s personal brand is being (or even can be) eclipsed by the brand of the company that she or he represents is paradoxical.
Mutually beneficial relationships
There will always be strong relationships in the insurance industry between individual financial advisers and wealth managers; and that is a good thing.
On a daily basis we are often reminded just how small the world is, especially the world of insurance. Everyone in the industry knows everyone else, and everyone’s path is bound to intersect with everyone else’s at some point. This is an industry that tends to be ‘for life’, so the odds on building long-term, sustainable, mutually beneficial relationships on an individual level are extremely high.
These individual relationships translate into brand relationships, and then develop however they are going to develop as time passes. There are no restrictions – at least there should not be.
All too often we see wealth managers being forbidden from taking brokers and clients with them when they move from one asset management company to another, even if they have relationships going back many years. This type of draconian practice ultimately does not benefit anyone. Solid relationships should form the bedrock of any brand – big or small – and should be seen as paramount in any organisation, especially in an industry like ours.
Smaller giants making heed
Another important element of a brand – be it an individual brand or a company brand – is the results it delivers. Bearing in mind that it is not only the big brands that deliver the big results.
There are some smaller, lesser-known players in the market who are doing exceptionally well in their respective classes. For example, clients may be familiar with brands such as Coronation, Investec and Allan Grey because they may have seen them on TV, but they might not necessarily be the best fit for their portfolios.
Looking at the top 10 equity-based unit trust fund returns for the first quarter of 2015, for example, there were not too many well-known names up there.
Topping the list was a brand new fund managed by Emperor Asset Management that delivered a 12.32% cumulative return. In second place, was a Fairtree Capital fund that returned 9.40%. The only big brand name in the top 10 was an Investec fund at number seven, at 8.41%.
Of course, this is just one small example that looks at a single asset class, but trends like this can be seen across the industry.
Intersecting paths
At the end of the day it is up to the financial adviser to recommend the option that is best for the investor. Different advisers have different strategies, different relationships and brand affiliations that work best for them. Clients, as we know, have diverse expectations and requirements.
It is often said that things have a way of sorting themselves out. Wealth managers will change jobs. Brands will be well-known, or not. Funds will do well, or not so well. Clients will be happy, or unhappy. And ultimately, things will settle down. Solutions will be found. Life will go on. And the single-most important thread that will keep all these factors in balance is relationships. Our industry, and our world, would not function without them.
