The private banking industry has traditionally been a discreet business but as this changes, such firms must make better use of branding as a strategic growth tool a new report says.

The private banking industry has traditionally been a discreet business but as this changes these firms must work to make better use of branding as a strategic growth tool, a new report says.

As firms battle to win a greater chunk of expanding wealth, they must develop and exploit brands more effectively, according to Scorpio Partnership, the consultants. It questioned private bankers and wealth managers together managing a total of $5.3 trillion of client money – around a third of the world total.

Scorpio sets out a five-step process for wealth managers called “Brandology”: know the client and their market context; segment clients more effectively by using the kind of systematic thinking prevalent in retail financial services; define the brand with practical messages; educate internal staff and make brand a strategic issue for the firm concerned.

Although some bank names are renowned even outside the ranks of high net worth individuals – such as JP Morgan, Coutts & Co and UBS – this industry has tended not to go in for the kind of glossy, mass-media-driven branding drives familiar in other walks of commercial life, such as automakers. However, there are signs of change: Barclays Wealth, for example, prominently displays its brand on billboards and in newspapers; Standard Chartered is already well known across its key Asia region; UBS sponsors Formula 1 motor racing and Coutts & Co, the venerable UK private bank, pushes its brand through events such as arts sponsorship. In the Americas, the brands of Morgan Stanley Smith Barney, Citi and Bank of America Merrill Lynch are well known. Names such as Rockefeller continue to resonate in the world of wealth management.

“Brands are a critical driver of HNW asset growth and nearly 80 per cent of the total wealth market today is managed by 20 global financial brands,” said Sebastian Dovey, senior partner at Scorpio.

His colleague, Stewart Prosser, senior partner, added: “Wealthy individuals tell us that they want simplicity, clarity, alignment of interests, empathy and trusted performance from their advisors and providers.”

The opportunities from using a brand more effectively to grow a business were highlighted last week in the Merrill Lynch/Capgemini World Wealth Report 2011, which said that the population of HNW individuals rose 8.3 per cent to 10.9 million in 2010, with these clients holding $42.7 trillion in investable assets – up 9.7 per cent.

The report also showed that HNW individuals are becoming younger, more female, more trusting in their firms, more willing to take investment risks and are more widely represented in developing nations such as India.