A consumer-facing Web site (www.riastandsforyou.com) offers video vignettes on the potential benefits of using an independent RIA featuring advisors telling their stories and highlighting their independence, their approach and their commitment to their clients. The Web site also lists questions to ask when choosing an advisor.
The overall goal of Schwab's ad campaign, says Bernie Clark, executive vice president and head of Schwab Advisor Services, is to hammer home the message that RIAs provide independent investment advice.
Industry analysts offered mixed reviews of the two brand campaigns.
"Both campaigns are long overdue and will have substantial positive impact on the growth of their respective targeted advisor channels,'' said Charles "Chip'' Roame, managing partner of Bay Area market research and strategy firm Tiburon Strategic Partners. He added that the campaigns are essential for certified financial planners and RIAs to offset the $200 million ad campaigns spent by traditional warehouses.
"The main issue for independent advisors is the lack of awareness that they even exist versus the well established wirehouse brands,'' Roame says. "The CFP has a similar issue--it's a powerful designation, but it's unknown to the vast majority of consumers and everyone calls himself a planner in one way or another.
"I think the home run is when a group of independent advisors brand themselves,'' he continues. "I bet some advisor group does that with a big ad budget in the next 12 months.'' Tim Welsh, president and founder of Larkspur, Calif.-based consultancy firm Nexus Strategy, praised both marketing campaigns as "noble efforts,'' but said such campaigns need to be done on an industrywide level to be effective.
"All those category campaigns like 'Beef: It's What's For Dinner' that were very successful were also very large in terms of their budgets,'' he says.
Welsh credits the CFP Board for its attempt to broaden CFP professional brand awareness, but given its modest ad budget compared to large corporations, he offers it likely won't make a big dent in consumer awareness. "Arguably they're not Nike, McDonald's or Coca-Cola,'' Welsh says. "Whenever you embark upon a brand-building awareness campaign in the retail mass market space, you need hundreds of millions of dollars to move the needle" Among CFP licensees, some grouse that if the CFP board has $36 million to spend, it might consider lowering annual fees. But other veteran certified financial planners give the CFP Board campaign a thumbs-up.
"Anything that builds the CFP brand is a good thing,'' says Thomas McFarland, a CFP certificant and founder of the Darrow Company, a Boston-based wealth management firm.
-- Jim McConville
Mysterious Bonds
Investors sorely lack information about whether they're getting a fair price on the bonds they are buying, according to The Bond Investor Study by Charles Schwab. The recent study makes the case that bond buyers generally don't know how much brokers are marking up bonds, how much others are selling the same bonds for, or if brokers are selling from their own inventory.
"Bond and fixed-income investments can be confusing to the investor because they are opaque," says Peter Crawford, a senior manager at Schwab who oversees its fixed-income platform. He adds it's becoming more of a problem as the population ages and older investors want to switch to bonds from stocks.
According to the Schwab study, 73% of bond investors want pricing details and 44% say they cannot figure out how much their bonds are being marked up. Another 24% have no idea how their bond firm is compensated.