Message #5 From:
Stock News Bot Date: June 26, 2006 06:07:00 AM
BK News Fund Performance Beats Brand Awareness as Key Sales Factor for European Retail Funds
LONDON--(BUSINESS WIRE)--June 26, 2006--Fund performance and not brand awareness is the primary driver of sales for European retail fund mangers, according to a new report commissioned by The Bank of New York.
The research, entitled "The Battle for Sales - Brand v Performance", focuses on the largest 100 retail fund managers in Europe by assets under management (AUM) in 2005. The study compares qualitative data on brand perceptions of third party distributors across 11 countries in Europe, including the UK, France, Germany and Switzerland, with quantitative analysis of fund managers' actual results. A series of qualitative interviews has been conducted with senior directors of European retail fund managers to corroborate the research.
According to the report short term performance (12 months) has greater impact on sales success than longer term (three year plus) results. This means that the most recent fund performance is considered more relevant than longer term historic performance in driving net sales.
Other important findings of the report include:
-- Brand strength does not appear to be influential in driving retail sales no matter how strong the messaging or how big the marketing budget.
-- There is no correlation between brand strength and actual investment performance, although third party distributors perceive there to be a link.
-- Advertising and brand awareness has become less relevant to distributors in their selection process over the past year.
-- Results are consistent across equity and fixed-income funds and by country.
Daron Pearce, managing director and head of client management for fund managers at The Bank of New York, says: "It is clear that good performance is the key driver of success for retail fund managers in Europe. Third party distributors may like to think that a strong brand influences their buying behaviour, but this is not reflected in actual sales."
The Bank of New York commissioned Oxford Metrica, a leading a leading independent strategic advisor, to conduct the research. The report is the latest in a series of Thought Leadership studies published by The Bank of New York in order to develop a better understanding of clients business and issues. The Bank of New York services 599 funds for 45 European clients with total assets of US$ 219.7 billion. The qualitative data capturing the brand perceptions was obtained from Metrinomics GmbH. Data on AUMs, sales activity and fund performance was obtained from FERI Fund Market Information Ltd.
The Bank of New York Company, Inc. (NYSE: BK) is a global leader in providing a comprehensive array of services that enable institutions and individuals to move and manage their financial assets in more than 100 markets worldwide. The Company has a long tradition of collaborating with clients to deliver innovative solutions through its core competencies: securities servicing, treasury management, investment management, and private banking services. The Company's extensive global client base includes a broad range of leading financial institutions, corporations, government entities, endowments and foundations. Its principal subsidiary, The Bank of New York, founded in 1784, is the oldest bank in the United States and has consistently played a prominent role in the evolution of financial markets worldwide. Additional information is available at www.bankofny.com.
