Should financial advisors create a personal or business brand?
For financial advisors, building a business brand may be the better choice.
As an Executive Coach for financial advisors, Branding is one of they topics I most enjoy working on with my clients. Financial planning and investment management can be very intangible products to sell to your prospective clients. Branding, however, can help to make what you do into a tangible product, depending upon how your choose to brand yourself.
As a financial advisor, you have the option to (1) create a personal brand for you as the advisor or for your (2) company as a business brand.
One of the most significant considerations in branding is your company’s name.
Choosing your company’s name is one of the most critical decisions you’ll make when starting out your business. It lays the foundation and tone for all your future branding activities.
For better or for worse, your business’s name creates a lasting impression on your potential clients. Therefore, naming your company shouldn’t be an afterthought.
Although it is possible to change your company’s name after filing your legal paperwork, it’s much easier and more convenient to choose the right name from the very start.
Today, we’re going to discuss why your financial advisory firm’s branding generally shouldn’t revolve after your own name and also the rare instances in which you may want to take on personal branding. Check it out below.
What Is a Brand?
Although the term “brand” is widely used, many people have trouble defining the concept clearly in their minds. The way the meaning of the word has changed over time doesn’t make this any easier. So, we’re going to start by defining what a brand is in terms of your business.
Cattle ranchers, over a century ago, utilized branding irons to indicate which animals belonged to them. As the cattle made their way through the plains to Chicago slaughterhouses, it was easy to figure out which ranches they were from due to the branding.
Clearly, the meaning of the term “brand” has changed in today’s landscape. Simply put, your brand is what your potential clients think of when they hear your brand name. It’s comprised of everything the public thinks they know about your name brand offering.
Why Is Branding Important?
You can think of your brand as the source of a promise to your client. If you’re touting yourself as an expert in retirement planning, your brand has to live up to that. Therefore, it’s crucial to allot some time to research, define, and build your brand.
As a financial advisor coach, I help clients develop their marketing plan. Your brand will serve as the guide to understanding the purpose of your primary business objectives. Then, you can align your strategy with those objectives.
In developing a strategic marketing plan, your brand serves as a guide to understanding the purpose of your critical business objectives. It enables you to align the plan with those objectives.
As a financial advisor going independent, your company’s name will be loaded with meaning, whether intended or not. Although the quality of your financial planning is a better measure of your company’s potential, it’s a fact that our own individual names carry meaning beyond our control.
For example, think of the name Sarah. When you hear the name, you probably have an idea in your head of how our hypothetical Sarah is like, whether that idea is rational or not. The same can go for the business names we choose.
Research shows that firms owned by and named after their founders are 21% less valuable than others. Since the name of your business is solely your decision, you have the power to make or break your business before even beginning to accept clients.
Although your services may be the best on the market, a bad business name with negative associations can deter clients. Likewise, a good name can improve your perceived credibility.
In general, there are two ways people can go about creating branding:
1. Personal Branding
First, people can create a brand identity surrounding their own name. A successful example would be the luxury fashion company Versace, named after its founder Gianni Versace.
2. Business Branding
On the other hand, you can create a brand identity surrounding a completely different entity name. Some famous examples include Nike and Facebook.
Why You Should Create a Business Brand?
For financial advisors, it is more common and more appropriate to create a branding identity separate from your own name. Let’s discuss the situations wherein you’d want to build business branding, rather than personal branding.
1. You Want Privacy
If you’d rather not be at the forefront of your marketing campaign, do not use your name. Many entrepreneurs prefer creating separate company names simply because they do not wish to be the face of the company.
This is something you should honestly consider and think through. If you’re feeling hesitant being the face of your brand, you more than likely won’t be a perfect one.
2. You Want to Scale Your Firm
If you create your branding around yourself, it may be more challenging to scale your firm and bring on new team members in the future.
Creating a business brand rather than a personal brand will allow you to train a team that will run the company on its own. Also, creating a personal brand will make succession planning more difficult. We’ll get to that later on.
3. Your Target Market Is More Comfortable Hiring a Business
If you’ve laid out your business plan properly, you should have a firm grasp on who your target market is. Think about what they want when looking for financial advisors. Are they more likely to trust a firm with its own name or a firm named after a single person? Naming your firm after yourself may put you at a disadvantage. Your clients may think that you’re less trustworthy and experienced compared to other firms. If you’re a viral superstar, maybe you can get away with personal branding.
Think of it this way. Pretend you’re at your local mall. Would you instead go shopping for shoes at Nike or a shop named “John’s Shoe Store?”
4. You Want to Reserve Your Personal Brand
It’s never too late to start a new business. Let’s say your primary source of income is your financial consulting business. However, you want to pursue fashion blogging as a profitable side hustle in the future.
If you brand both your financial advisory firm and your fashion blog under your name, you people may think you’re a “jack of all trades, master of none.” Therefore, you may conclude that its best to reserve personal branding for your blog and be closely associated with it. Then, distance yourself from your financial planning firm through business branding.
Being content with running a one-person show is entirely acceptable. In fact, many financial advisors can become highly successful and find great fulfillment working on their own. Others, however, may have dreams of scaling their firm into something bigger than themselves.
Or, you may wish to sell the business at one point and enjoy retirement. This becomes much more difficult when the firm is inextricably linked to your name. You’ll essentially be weeding out and discouraging qualified partners or buyers who don’t like buying firms they may not feel ownership over.
Even if you do close a profitable sale, your name and your reputation will be at the mercy of the firm’s new owner. Imagine someone else running your businesses (named after yourself) into the ground.
Let’s say you don’t want to sell the business. What happens when, for whatever reason, your personal reputation takes a hit? Your self-branded company will take a hit as well. There’s a reason the terms reputation and name are synonymous.
Putting your name on your firm can also unnecessarily complicate your drive for new customers. Google searches are one of the primary drivers of business traffic in this day and age. If you have a name that is difficult to spell, you probably don’t want to name your firm after yourself.
On the other hand, you may have a plain and simple name. In this case, naming your business after yourself may not allow you to stand out enough nor tell potential clients about your business and what you do.
You may think that you won’t be able to make a name for yourself if you don’t name your company after yourself. Understandably, this thought has led many professionals to worry about their firm overwhelming and surpassing their own public perception. In truth, if your business is successful, your name will be made known.
Take Steve Jobs as an example. He didn’t name his ultra-successful tech company after himself. He called his company Apple. And yet, you know exactly who Steve Jobs is even without having to Google him. It was the success of his company that made him stand out, not having to print his name on his products.
In recent years, more and more companies have begun to forego descriptive names in favor of abstract ones. Although these names may not have a personal touch, they obtain meaning and popularity through the success of their services.
It’s a smart way to make your services stand on their own, without risking damaging or potentially unfair associations with its owner. If Henry Ford had a public scandal, you can be sure that Ford stock prices would have plummeted.
Or, consider Edsel Ford, the father of Henry Ford. Instead of being remembered for his decades spent at the helm of the highly successful Ford Motor Company, he is remembered for one of the auto industry’s biggest flops. Until today, the connection between his name and his shortcomings is, unfortunately, impossible to erase at this point.
By removing your name from your firm, you allow your firm to be known as a separate entity. That means that if you get into any personal public trouble, it won’t affect the perception of your business and vice versa.
The Other Side of the Coin
In fairness, there are certainly a few benefits of branding your firm after yourself. You’re taking charge of your own reputation by linking your business and front-facing persona explicitly. This allows you to build up your reputation as you see fit. It gives you full responsibility for your reputation, for better or for worse.
Also, you’re showing your clients that there’s a lower chance of you leaving the firm for another opportunity. After all, the firm is named after you. So, your clients will understand that you may want to take care of it for as long as you can. This can be great for attracting long-term clients.
As mentioned earlier, however, creating a personal brand around your firm has significant drawbacks. Your name will be indelibly attached to your business in the eyes of the public.
As a final example, take Martha Stewart. The Martha Stewart Living magazine found itself in trouble after Martha Stewart’s 2004 conviction on insider trading charges.
The Bottom Line
Like every other decision surrounding your business, you get the final say when it comes to building your firm’s brand. For financial advisors, however, it may be best to favor a business brand rather than a personal brand. Regardless, you now have all the facts to help you make a more informed decision. Good luck!