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Fidelity is leading Vanguard, Schwab in brand equity. Here's why

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Fidelity’s got personality — and that’s key, according to a recent report.

When choosing or switching to a provider, “unaided awareness,” otherwise known as brand equity, is one of the most crucial metrics clients use, as they most often seek recommendations from friends and family or look into firms whose names they recognize, according to Cerulli Associates.

When asked to name a provider in the space, 50% of investors cited Fidelity — that's 17% more than Charles Schwab and 27% more than Vanguard.

Fidelity’s success is due to an early investment in its brand’s impact, according Chistina Bertinelli, membership and leadership team director at Vested, a multimedia communications agency.

“[Fidelity was] one of the first firms to build a personality for their brand,” says Bertinelli, citing YouTube videos dating back as far as 2013.

The custodian has been distributing content across several metrics for years, according to Bertinelli.

“The firm’s extensive advertising, combined with its presence as a retirement plan provider for millions of participants, make it the most formidable brand in the wealth management segment,” says Scott Smith, director of advice relationships at Cerulli, in a release.

In second and third place, Schwab and Vanguard achieved 33% and 23%, respectively, when it came to unaided awareness. (Bertinelli said she was surprised that Schwab and Fidelity’s numbers didn’t draw closer after Schwab leveled the playing field in October by dropping commissions.)

While building brand equity has always been an important consideration for firms, the industry will double down on its efforts in coming years, she predicts.

One reason is millennial clients, who have a tendency to be brand loyal — they care less about what a firm offers and more about what it represents. So as their numbers increase, the importance of firm identity will as well.

On top of Fidelity leading in brand equity, 72% of respondents agreed that it was a brand they trusted. Vanguard came in second at 62%, according to the Cerulli report.

Bank-centric brands, such as Bank of America and Wells Fargo, were most likely to elicit “respondent disagreement” as to trustworthiness.

And, as the brand-equity sweepstakes heat up, firms are increasing the number of platforms they utilize to reach clients. Just providing a website isn’t enough anymore, says Bertinelli. Blogs, social media accounts and campaigns are now almost expected.

“It used to be one or two outputs and now there are over 15 outputs,” she says.

In a brand-equity dominated financial services landscape, the referral method will persist — but in a new form, according to Bertinelli.

“While referencing is very powerful, we look at different channels to validate that reference,” she says.

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