This is an analysis of Invesco’s reputation as a financial product supplier to Canada’s financial advisors. These are the advisors with whom individual investors build relationships and consult as they manage their wealth, investments, and often, insurance needs. Invesco has been on a positive trend in so many of the reputation matters that Credo measures on an ongoing basis. Despite this, the company is not currently one of the Suppliers of Choice among Canadian financial advisors. This is somewhat anomalous, so we’re currently interviewing Invesco’s supporters to investigate their rationale for rating the company the way they did. We will report on our findings later in the year.
Each year, to generate the annual scores that are reported below, Credo asks more than 1,000 randomly identified personal financial advisors from across the country to react to a standardized battery of brand measurement statements. (Note: if you are interested in reviewing either the demographics, business profiles or psychographics of advisors who indicate they are supporters of Invesco.) Together these statements comprise one of three key strategic frameworks Credo uses to assess Canada’s asset management brands.
Credo invites only advisors who indicate that they are currently working with a specified company to rate that company. This ensures that we are not collecting perception data from advisors who are not adequately familiar with the subject company. By applying this method across all of the companies we monitor, we achieve consistent, comparable brand-measurement statistics.
There are eight graph segments in Exhibit 1 below. Each one represents a separate important dimension of Credo’s model of advisors’ Willingness to Support suppliers (pictured in Exhibit 2.) Credo uses this model to measure and predict the support advisors will offer a given company.
Exhibit 1: Key elements of Invesco’s brand over time
The data that underpin the model is based on the experiences the company is delivering to the advisor community. Invesco’s results are presented in the context of the broader industry. This model is represented by the pyramid that is shown in Exhibit 2, below.
Exhibit 2. Credo’s Brand Credibility Pyramid
An advisor’s Willingness to Support a given company is at the top of our Brand Credibility Pyramid; it is every company’s objective to maximize this critical component of the structural equation model. The main value of a brand is its ability to help a company sustain its sales and, for asset managers, retain the assets they manage. Advisors’ Willingness to Support the suppliers they keep on their product shelves is justified by the pillars immediately beneath the top of the pyramid: Quality, Comfort and Convenience.
Advisors’ Willingness to Support Invesco currently stands at the 32nd percentile in the industry. Almost 70% of the company’s competitors are in a stronger position than Invesco. The percent rank achieved this year is slightly lower than the average rank achieved over our 7-year measurement period (37th). The percent rank achieved this year is higher than the rank achieved in the previous year (22nd), however. Sadly for the company, the overall trend for Invesco is negative. Based on its current trajectory, over time Credo expects that fewer advisors will support Invesco in Canada.
An advisor’s willingness to support a supplier is predicated, in part, on the company delivering an offering that is seen as being of high quality. And while each advisor will define quality in his own terms, Credo’s model effectively reduces this important pillar to a single measurable statistic for each industry competitor and for the industry overall. (Measurements of the company’s quality are the purview of Environics’ Advisor Perception Study.)
Invesco’s score with respect to Quality sits at the 65th percentile in the industry, so only 35% of the company’s competitors are review as better than Invesco. Further, the overall trend for Invesco is certainly positive. The percent rank achieved this year is higher than the average rank achieved over our 7-year measurement period (51st) and it is higher than the rank achieved last year (51st).
Advisors require a relatively high level of Comfort with a brand before they present it to a client. All things being equal, if a company can make an advisor more comfortable with its brand, it increases the likelihood that an advisor will choose to use its products relative to a competitor’s products. Comfort is critical pillar on which willingness to support sits; advisors put their own reputations on the line each and every time they recommend a company’s product to a client.
Advisors’ comfort with Invesco is currently at the 68th percentile percentile in the industry. The percent rank achieved this year is slightly higher than the rank achieved last year (65th). The percent rank achieved this year is also higher than the average rank achieved over the measured period (58th). So, the overall trend for Invesco is positive.
Companies that make it Convenient, or easy to do business with them, reduce the likelihood that an advisor will search for alternatives that compete with them. It is a highly competitive environment and there is a broad array of solutions available to Canada’s financial advisors. If suppliers do not make it easy to do business with them, it is generally not difficult for an advisor to find an alternative.
Invesco is in the 65th percentile in the industry with respect to convenience. The percent rank achieved this year is slightly higher than the average rank achieved over our 7-year measured period (60th). The percent rank achieved this year, however, is slightly lower than the rank achieved last year (68th). Still, with respect to convenience, the overall trend for Invesco is positive.
Clarity is a central element of Credo’s brand measurement framework. Companies whose value propositions are well understood by their clients (in this case, financial advisors) can more easily achieve a level of credibility with their customer base.
Based on Credo’s research with advisors, Invesco’s brand currently sits at the 73rd percentile with respect to clarity among advisors and the overall trend for Invesco is positive. The percent rank achieved this year is significantly higher than the average rank achieved over the measured period (55th). The percent rank achieved this year is higher than the rank achieved last year, too (59th).
Credibility represents the degree to which a brand truthfully delivers on its promises and the degree to which an advisor feels she can depend on that brand. When perceptions of truthfulness and dependability are strong, so is credibility. This factor is a central component of Credo’s brand health model as it is strongly related to advisors’ willingness to include their suppliers’ products in proposals to their clients.
Invesco’s brand currently sits at the 62nd percentile. The percent rank achieved this year by the Invesco brand is slightly higher than the rank achieved last year (54th). The score achieved this year is higher than the average rank achieved over the measured period (49th) and the overall trend for Invesco is positive, though almost 40% of the industry earned higher scores from their supporters.
The bottom right corner of Credo’s pyramid (and the second facet in Exhibit 1) represent Consistency and Congruence. A supplier is much more likely to be well understood and appreciated for its value proposition if its managers consistently deliver both messages and experiences that are congruent with an advisor’s expectations. Consistency and Congruence are therefore essential building blocks for establishing clarity, a higher-level factor in our structural equation model.
With respect to consistency and congruence, Invesco is currently rated by its advisor supporters in the 70th percentile within the industry. The percent rank achieved this year is higher than the average rank achieved over our 7-year measured period (52nd) and the score achieved this year is higher than the rank achieved last year (59th). The overall trend for Invesco is positive.
The final facet of Credo’s Brand Credibility model relates to Brand Investments. Brand investments are the premise that a company needs to develop awareness of itself if it is going to substantiate and support its credibility. When a company spends in order to support its brand it gains credibility in its customers’ minds. Advisors tell Credo that it’s almost always easier to convince a client to accept a proposal that includes a brand with which they are already familiar.
Brand Investments have long been one of Invesco’s strengths. Few advisors are simply unaware of Invesco. Despite this, Invesco’s percent rank within the industry is as low as Credo ha ever measured at the 84th percentile. This is a decline from the company’s 92nd percentile rank last year. Still, Invesco’s Brand Investment scoring remains stable, close to the top of the industry.
Despite being on a positive trend with many of the components of Credo’s model of brand credibility, the key component of our model — an advisor’s willingness to support the company — is not in a desirable place. Credo remains concerned for the Invesco brand in Canada while it is on it’s current path; improving in so many dimensions while remaining weak in the one dimension that drives financial success is not a sustainable long term business model; it is akin to delivering value while watching your profitability bleed away. The company may have turned a corner with its improvement in Willingness to Support this year. Credo will report on advisors explanations of this in October.
Making the research actionable and team members accountable
After measuring a brand’s position in the market relative to competitors, Credo is in a position to help facilitate change. We have a proven facilitation process we call STAR (Strategic and Tactical Acceleration Retreat) that helps companies identify and develop specific strategies and tactics that are converted into a well-defined, actionable plan for addressing a strategic issue. Credo’s three day STAR session produces a plan that drives accountability among all team members.
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