Magazine article American Banker

Creating Mutual Fund Brand Identity Urged at Conference in Ireland

Magazine article American Banker

Creating Mutual Fund Brand Identity Urged at Conference in Ireland

Article excerpt

The need for companies that sell mutual funds to create a brand identity was a key topic of discussion here last week at the first USA-Ireland Mutual Conference.

Over time, building a brand identity for a fund company can prove more beneficial than simply advertising the performance of specific mutual funds, said Arnold D. Scott, a senior executive vice president at MFS Investment Management Co., Boston.

In addressing participants in Dublin's offshore fund servicing business, Mr. Scott and others sought to draw from the experience of American mutual fund companies and their efforts to tap U.S. investors in recent years.

"Performance is a double-edged sword," said Mr. Scott. "Sometimes you have it, sometimes you don't."

MFS uses both performance and branding in its advertising, said Mr. Scott. However, he said brand identity is the key.

Name recognition can mean that investors will not bolt at the first downturn in the stock market, he said. If investors are comfortable with the brand, they are more likely to move their assets to other instruments within the family rather than out the door, he added.

"When the correction comes-and it will-we will be able to hold our investors in the family of funds," Mr. Scott said.

In Europe, the nascent fund business still leans toward advertising performance, lagging the more mature U.S. market. However, Mr. Scott predicted that European companies will develop brand identities as the business develops.

Indeed, some European institutions have already pioneered brand-driven advertising for investment products. …

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