United Capital Financial Partners Inc., a private wealth advisory firm in Newport Beach, plans to spend about $13 million for advertising and other marketing efforts to “create a billion dollar brand.”
The money will be drawn from a recent $38 million capital influx from two investors.
“We think that’s going to require growing to somewhere between $250 million and $300 million in revenues, so that’s double or triple from here,” said Joe Duran, United Capital’s co-founder.
He said the company has doubled its revenues every 18 to 24 months since its 2005 inception and in December said it was on track to bring in more than $90 million in revenue in 2013.
“We brought in, this year alone, about $1 billion in organic assets,” he said.
United Capital has 350 employees in 48 offices, with roughly 10,000 clients and $10 billion in assets under management. A major part of the recent investment—$30 million—came from Palo Alto-based Sageview Capital LP. Boston-based venture capital firm Bessemer Venture Partners and Grail Partners LLC in New York put in the rest.
Duran said he’ll use the capital to finance acquisitions, provide liquidity for his original investors, and to launch the new marketing initiative.
“Right now, what we really need help on is a refresh on our brand,” Duran said. “We’ve had it now for three years, this very organic look, so we are just thinking about how we can punch it up.”
Leslie Dunham, United Capital’s vice president of marketing and brand management, is in the process of selecting a creative advertising agency to help position the wealth management firm in relation to competitors. The top three contenders are London- and New York-based ad shops. Dunham said she’ll make her final selection in the next few weeks.
“We are looking for firms with fresh ideas that are very different from traditional financial branding,” she said. “We don’t want to see Roman statues and a guy on a sailboat with a glass of wine in his hand.”
Dunham wouldn’t say how much the company is spending on the agency contract but did say it will be “triple” what it spent on marketing in the past few years. She also plans to hire a digital marketing firm to work in conjunction with the lead agency.
The media budget will be “all Internet-based,” Duran said, adding that competitors such as Merrill Lynch and UBS have big advertising budgets and that he “can’t outspend them. …You just have to know where you fit, where I can get the biggest bang for as little money as humanly possible.”
Sale to GE
The marketing campaign will target the “millionaire next-door,” who, like Duran, understands “money doesn’t buy happiness.” In 2001, Duran sold Centurion Capital Group Inc., to General Electric Co. for more than $100 million, and despite a healthy balance in his bank account, he said he had “never been more miserable.”
The experience inspired him to start his current endeavor with $5 million in seed capital and his MBA classmate, Gary Roth, at his side. The company focused on building a national presence through acquisition of smaller investment advisory firms and on recruiting financial advisers, supported with a $10 million investment in 2006 and another $6 million in 2007, both from Grail.
Bessemer put in $15 million in 2009, part of which Duran used to “unify the brand” and to develop a client process that would be “replicable and scalable … like Starbucks.”
He hired New York-based agency Addison Wechsler Financial Marketing to work on branding and positioning.
“They helped us come up with ‘Honest Conversations,’” Duran said, referring to a technique in which clients use color-coded cards to prioritize their financial goals and the motivations behind them.
Unified Message
The $100,000 agency contract paid for marketing collateral, but “the real money,” or nearly $500,000, Duran spent on getting United Capital’s affiliates to agree on a unified branding message as the company went “from 20 different stories to one.”
The new marketing campaign will focus on communicating its investing philosophy.
“The most important thing for us is that you have as little regret as possible when the end comes,” Duran said. “Because the problem is, most financial advice you’ll ever receive is about building up as [big of a] savings pool as you can, it’s not actually a guide to help you make the changes along the way that maximize your life right now.”
United Capital also took its financial assessment tools online and “gamefied” the client investment process. The team came up with the Web-based “Money Mind” game, which helps clients understand their relationship with money and how it impacts their decision-making process. Participants, after completing a series of questions about money-related issues, are given one of three labels: the protector, whose primary goal for the money is to provide security; the pleasure seeker, who sees money as a means to have fun; and the giver, who focuses on helping others. Advisers tailor clients’ investment plans based on those preferences.
“When you are a very small firm competing against really big firms, you have to have an unconventional approach,” Duran said. “We don’t have the money or the brand or history to compete on the same terms as Merrill Lynch.”
