Practice Management

Investors Prefer the Path of Least Resistance

“People are far more likely to take a path of less resistance by seeking out recommendations from trusted sources or choosing firms whose brand they have become comfortable with over time.”

By John Manganaro editors@strategic-i.com | October 31, 2016
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A new analysis from Cerulli Associates suggests “strategic top-down branding” and careful control of the client experience are well worth the effort (and expense) for financial services firms.

Scott Smith, director at Cerulli, explains that firms involved in investment management, advice and recordkeeping place very different values on strategic branding activities. Many firms are understandably hesitant to push resources into branding/marketing initiatives designed more with long-term benefits in mind than short-term balance sheet performance. But in a highly competitive investment services marketplace, such efforts will be increasingly important to attracting and maintaining customers, Cerulli asserts.  

According to the analysis, investors are often unclear about the relative objective merits of one firm versus another, “which makes it important for providers to offer easy-to-understand overviews of their various engagement levels to make it easier for prospective investors to seek out options that are of greatest relevance to them.”

Important to consider, clients are much more likely to stay with a firm than to switch, even when they are not highly satisfied with the service, says Smith. “Firms seeking to increase market-share should focus on marketing and service campaigns that make new transitions as pleasant as possible,” he says.

And of course, creating and maintaining a trustworthy brand experience is tantamount to long-term success.

“Consumers do not have the time to spend comparing various investment options,” Smith adds. “Instead, people are far more likely to take a path of less resistance by seeking out recommendations from trusted sources or choosing firms whose brand they have become comfortable with over time.”

NEXT: Details from the analysis