What Brand Really Means to an Advisor

How significant is a brand name these days to an advisor’s assessment of a firm? The simple truth is, it depends on who you ask.

A firm’s name once meant everything to most advisors—both in terms of defining which firms they would consider joining and how they marketed themselves. Then the financial crisis hit and dramatically altered the perceptions of advisors as well as their clients—and the brand cachet of brokerage firms no longer carried the guarantee of credibility, strength and trust it once did.Today, the industry landscape has evolved from being defined by a short list of high profile, long-tenured brands to a growing number of both new and reinvented players who have legitimized the options outside of the big bank and brokerage world—their established names no longer the dominant force that dictates the direction in which advisors and their clients move.Nonetheless, advisors still have differing views on the importance of a firm’s brand, and this has encouraged movement in every direction: to and from familiar brands as well as to a growing number of new ones.

Identifying the importance of a big brand name

When advisors contemplate a move these days, one of the first considerations is the extent to which aligning with a certain brand is important.
  • Is the advisor looking to create his own brand or is he looking to find a better fit from amongst established names?
  • To what extent has the advisor relied upon the firm’s identity to establish himself—and will separating from that identity impact the business in a negative way?
  • How big a factor is a brand name in the consideration of a new firm or business model?
  • Are the clients attached to the big brand name—or do they recognize their relationship as being with the advisor?
  • Personality types and how they drive a firm’s identity

    The significance of a brand in an advisor’s business is often defined by one of the following three personality types:

    The Entrepreneur

    This individual is fiercely independent-minded and focused not only on growing his practice but on building an enterprise ripe for M&A opportunities. They want to create either a legacy or an asset that increases in value for a future liquidity event. The brand matters to these advisors, but it’s a brand of their creation and is chosen carefully to represent everything they are looking to create as business owners.Most of these advisors gravitate to the RIA space where they have the maximum flexibility to create and market their own identity. To the extent the entrepreneurial advisor sees any need to identify a recognizable brand to clients, they will introduce the institutional custodian of choice. Names such as Schwab, Fidelity and BNY Mellon Pershing certainly are familiar names that clients can identify with.

    The Traditionalist

    While the wirehouses and big banks are no longer leading in the recruiting wars, there continues to be those advisors who are drawn to the enduring strength and familiarity of these firms. Names like Morgan Stanley and J.P. Morgan still resonate with their clients and therefore will continue to attract quality advisors who place a high value on the immediate recognition of the well-entrenched identity. Yet, even in this space, there is a growing trend for advisors to be identified beyond the firm’s name, thereby differentiating themselves by co-branding, a practice many firms now allow.

    The Modernist

    While this advisor may not be intent on exclusively leveraging his own personal brand, he is also not drawn to that of another big firm—likely as a result of having built a business at a big brokerage and now looking for alternatives outside of that space.This advisor may be drawn to a growing number of new brands or reinvented names (like Sanctuary, Dynasty Financial Partners, and Steward Partners), some of which may have meaning only to the advisor. Others in this category may value brand cachet but from a new source, such as Rockefeller. This firm’s immediate name recognition has been a significant factor in its early success in attracting top teams. Regional firms such as Raymond James, Stifel and RBC are likewise experiencing a recent surge in appeal and recruiting success.Until a few years ago, many of these names would have been relative unknowns, especially outside of their historic footprints, and certainly not on the radars of most sizable, high-end advisors. Now their names have come to represent a strong advisor-centric culture with platforms and capabilities on par with the wirehouses.We have witnessed the pendulum swing from one extreme of total brand connection and the suppression of the advisor’s personal brand to big brand avoidance. Today the pendulum has come to rest at a middle ground, driven more by an advisor’s personal preference in how he wants to differentiate his business and build new relationships.What is so exciting about the current industry environment is that advisors can choose to run their business lives based on what they value most—a mindset we predict is here to stay. Now that advisors are confident that platform and capabilities can be replicated anywhere, they are free to focus on what matters uniquely to them.Related: Advisor Independence: Learning to Embrace Change as an Opportunity