Architas head of business development Cedric Bucher here explores the many benefits of co-branding.
More than ever, advisers need to prove the value they add to an investor. For some, this marks quite a fundamental shift; for others, it is what they have done for a long time.
There are several ways advisers can deliver but one service that we have heard to be of particular value to clients is the supply of regular updates that keep them informed on the performance of their investment and make sense of what is happening in the world of financial markets.
However, this can be time-consuming and, particularly with regards to the market updates, requires specialist knowledge. As a result, more and more advisers are looking to their preferred asset managers for support and some asset managers have started offering a co-branding service. This is where advisers can mark material with their own brand alongside that of the fund house - also known as ‘white-labelling'.
What's in a label? The benefits of co-branding
One of the key benefits of co-branded materials is the time it saves an adviser. As the Retail Distribution Review (RDR) puts greater emphasis on the quality of service, as well as quality of product, we are seeing advisers wanting to spend more time getting to know their clients - assessing investment goals, their attitude to risk and capacity for loss, conducting financial and cashflow planning, as well as tax planning.
This reduces the amount of time they can spend producing marketing and investment update materials. If, however, the adviser can rely on their outsourced investment manager to produce materials to which they can add their logo, the time pressure will be reduced.
An additional benefit of co-branded materials produced by an investment house is that they are likely to contain the necessary specialist information. Written in close proximity to the fund managers themselves, the materials can express first-hand the thought processes, performance drivers and rationales of the managers. The fund house is also likely to have the experience and capability to navigate the various regulatory and compliance avenues.
These two benefits combined ensure the adviser is getting the most value from the asset manager.
Over and above that, co-branding can also contribute to the relationship between adviser and fund house. We have been arguing for some time that this relationship should be a collaborative one founded on trust, mutual respect and good communication. This is most likely to be achieved if time is taken to research fund houses, carefully examining their capabilities and specialities, to be sure they meet the adviser's and their clients' needs.
With a good relationship, advisers can harness the experience, skills and resources of an asset manager most effectively. This might include broad market knowledge, thorough research and risk analysis. A co-branding function can be an additional feature to strengthen that partnership in a very visible way.
Advantages extend directly to the client, too. As well as gaining access to more insightful investment materials and receiving a more attentive service from their adviser, the client will be better aware of the component parts of their investment solution and how they fit together. For some time, the Financial Conduct Authority (and its predecessor the Financial Services Authority) has been keen to remove complexity and obfuscation from investments.
Keeping investors better informed is one way to address this. Recognition of the name of the investment house managing their funds is also likely to contribute to the investor's understanding and give them greater peace of mind. This, in turn, will reflect favourably on the adviser.
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