Richard Branson: Harnessing the power of brand
IT probably didn’t come as a surprise to anyone in financial services that Richard Branson, one of the world’s most famous and media savvy entrepreneurs, saw yet another business opportunity for the Virgin Group with the launch of choice of fund in Australia.
With over 350 companies under his wing worldwide, accounting for around $8 billion per annum in sales, the Australian-based Virgin Money set up shop with Virgin Superannuation to much fanfare in July this year.
Their launch included a typically extravagant Branson-esque party at the Australian Stock Exchange, featuring suspended acrobats, gymnasts and cancan dancers.
Using the power of the Virgin brand, Branson waxed lyrical about the benefits of his new offering, which features a flat fee of 1 per cent, and would be available to consumers direct.
In the process of talking-up the new product, he also managed to butt heads with pretty much every financial planner in the country, and a few fund managers, by accusing advisers of growing fat off the exorbitant fees charged to clients.
Kerrie Kelly, chair of the Financial Planning Association, was quick to defend her turf, saying that the launch of the product demonstrated “a typical Richard Branson approach, swanning into town to promote his self-interest and product of the day in a way to maximise attention regardless of the wider interest”.
Still, whatever your personal opinion of the flamboyant multi-billionaire, there can be no denying that he certainly created some waves in the retail super arena, and re-started the debate on direct sales versus third party advisers.
And while Virgin Superannuation products only offer index fund investment options, Branson managed to stir up the issue of fees once again.
So will this new venture prove a success, or go the way of the much-maligned Virgin Trains in the UK?
In July, the company claimed to already have 10,000 individual super customers, although figures on the size of member balances are still unavailable.
But Branson seems to have set a trend, with Maxsuper following his lead with the launch of another low-cost retail pension product just recently.
According to online measurement consultancy Hitwise Australia, the popularity of Virgin Superannuation’s website jumped in the period between mid-July and mid-August to make it the number one visited business and finance website for superannuation, up from a ranking of 290 in the previous month, and beating nearest rival AMP.
This just goes to show how the power of marketing and customer brand awareness can force room for a new product in an already crowded marketplace.
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