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A Story of Two Brands

Those watching cable news recently may have noticed a spate of new TV ads from Edelman Financial Engines. This is an extension of a national campaign started last February and features clips from the radio show of the company’s namesake Ric Edelman. Edelman co-founded Edelman Financial 30 years ago with his wife and has been the very public face of the firm ever since. 

Back in 2018, however, there were questions about whether the Edelman brand would survive. That year, private equity firm Hellman & Friedman, a majority owner of Edelman Financial, acquired retirement plan specialist, Financial Engines, and proceeded to combine it with Edelman. The branding of the new entity was up in the air. Financial Engines was substantially larger in AUM, but retail awareness of the Edelman brand was stronger as a result of Edelman’s popular radio show and publications. It took about four months for Hellman to decide on a co-branding approach with Edelman as the lead brand. An increase in lead and cash inflows identified by the firm from this year’s TV campaign featuring Edelman suggest the decision may be the right one.

In May of last year, Goldman Sachs acquired RIA rollup firm United Capital. In January of this year, Goldman Sachs completely dropped the United Capital brand. Going forward, United Capital is Goldman Sachs Personal Financial Management. This decision also makes sense. While widely known among a certain segment of financial advisors, United Capital had low brand awareness among retail investors. Even Joe Duran, United Capital’s founder, was not convinced that keeping the brand made business sense. Goldman Sachs also has a clear strategy to use United Capital to expand its offering to the HNW and Mass Affluent markets.

One lesson to be learned from these two very different post acquisition brand decisions is that several factors must be considered when making post-transaction brand decisions. These include the relative brand awareness in specific markets of each company, their relative size and market penetration, and most importantly, the business strategy of the combined entity going forward.