Everyone knows McDonald’s by its golden arches, but how do prospective clients recognize your firm? Investment Executive asked brokers to rate their satisfaction with their firms’ advertising, and to evaluate the importance of marketing and branding in the upcoming year. The underlying question was not only, “How important is your firm’s image?” but also, “Is your firm doing what it takes for you to build your book?”
This year’s conclusions were, well, inconclusive. The survey shows that although the quality of advertising in all 10 firms rated an average of 4.5 — the lowest score across the board — brokers didn’t necessarily think it was among the top priorities (the average priority rating was 7.3).
Adding to the confusion were brokers’ comments on the best and worst aspects of their firms. While “brand-name recognition” was mentioned consistently (particularly within bank-owned firms), brokers couldn’t seem to decide whether it was one of the best or worst things about their organizations.
While it’s no secret that top-notch branding has an impact on where clients take their business, it’s becoming increasingly evident that the type of branding is becoming more and more important. Specifically, the lure of the bank brand names vs the hassle-free image of the independent firms is weighing heavily on brokers’ minds.
One recurring concern among those surveyed this year was the struggle to maintain client control in the bank-owned firms. It’s a Catch 22: while brokers enjoy and appreciate the prestige of the bank name — and its ability to secure new clients — they’re wary of losing their clients to the bank entirely.
Feeling threatened
In some cases, brokers are starting to feel the threat. “We’re starting to become slaves to the rules and regulations of the banks,” says a broker at RBC Investments in Ontario “If you decide you want to leave, you’d have a hard time keeping your clients, even if they’re there for you,” says another Ontario broker at RBC. “Royal Bank knows it has you. It’s aggressive about keeping its clients.”
But things aren’t necessarily much better at the independent firms. Without the name of the bank to draw future clients, brokers have to rely on advertising to become better known among the public — and it isn’t necessarily a good thing. As one B.C. broker at Raymond James Ltd. says, “It’s dreadful. I don’t think they get it. ‘Everybody loves Raymond James’? I don’t know how that helps my business.” A fellow Raymond James broker agrees: “Ha! It’s pathetic,” he says of the firm’s advertising. “In fact, it’s a detriment.”
But the brand-name blues are nowhere more evident than with former Merrill Lynch Canada Inc. brokers, now with CIBC Wood Gundy, a division of CIBC World Markets Inc.. For brokers who counted on the prestige and recognition of Merrill’s bull logo, the transition to the lesser-known Wood Gundy has been a tough one. Says one dissatisfied Quebec broker, “There’s a lack of brand recognition. We’ve lost the prestige.” Says a B.C. broker, “I think we should be called ‘World Markets’. ‘Wood Gundy’ sounds stupid.”
Clients’ dissatisfaction with the banks is an increasing concern to brokers unfamiliar with their new-found connection to a major Canadian financial institution. Instead of enjoying the prestige of the big bank name, brokers are finding that clients are wary of giving their business to a bank. “Being affiliated with a Canadian bank [is the worst aspect of my firm],” says a new Wood Gundy broker from Ontario. “I think clients hate the banks; we lost a couple clients just because of the that.”
A fellow Ontario Wood Gundy broker has found the same thing. “When I sat down to talk to my clients I found they’re a little apprehensive so far,” says the former Merrill Lynch broker. “I’m discovering that part of why they came to me when I was with Merrill and Midland Walwyn was because I wasn’t with a bank.” Another Ontario Wood Gundy broker agrees: “It’s an easier sell to our clients if we’re independent rather than with a bank.”
Not everyone feels that way. The perception of the bank’s stability and security plays a big role in brokers’ ability to deal with new clients — even if it really is nothing more than a perception. “The bank’s brand name creates a positive feel in the market,” says a Ontario Wood Gundy broker. Others maintain it doesn’t matter: “Clients don’t care if we’re owned by a bank,” says another Ontario broker. “It’s a non-issue.”
But one thing all brokers seem to agree on is that they want their clients to be their clients, not controlled by the bank or the firm. “I want my clients to deal with me, not the firm,” says a Raymond James broker in Alberta. IE
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