In grammatical terms, a word with the letters ING at the end is a gerund — a verb masquerading as a noun. Fitting, then, that the Dutch financial services firm that goes by those letters would have a mysterious side.
It's not as though ING is completely anonymous, of course. Its orange lion logo has become more recognizable as the firm has pushed its brand via high-visibility ads during sporting events. But in the financial advisory game, ING is hardly a household name. Indeed, many advisors are surprised to hear just how big a player the firm has become in the brokerage industry. How it fares going forward will depend, in large part, upon how it follows through on its commitment to growing its advisory salesforce.
ING's presence in the advisory business began in 1997 with the purchase of two Midwestern companies, Hudson, Ohio-based Vestax Securities and Locust Street Securities, which was a part of Equitable of Iowa. Over the next four years, ING continued to pick up companies, including two biggies — ReliaStar and Aetna Financial Services. By 2001, it owned a total of eight broker/dealers and had formed ING Advisors Network. In the years since, ING has continued to grow into one of the largest independent b/ds in the country, with a combined salesforce just short of 10,000 (producing reps total 8,433 as of May 31, 2004) and a presence from coast to coast.
Today, a financial planner, who previously would not have given this Amsterdam-headquartered company a second thought, might find himself excited about adding ING's distinctive orange logo to his shingle. Or, he may choose a more innovative way to promote his connection to the $49 billion company — as Michael Masiello of Rochester, N.Y., did. The financial planner, who is with ING's Multi-Financial, at a recent conference rushed up to the president of ING Advisors Network, Valerie Brown, and asked her for a picture of the head office in Amsterdam. The company sent him a nice print of the dramatic sneaker-shaped building. Although Masiello is proud of being an independent planner, the picture of ING's Amsterdam office hangs up on his wall. “You have no idea how many positive comments I have received about that picture from my clients,” he says.
Indeed, with more reps going indie, companies like ING are extending the promise of the best of both worlds — the support of a large company combined with the autonomy of the independent life.
If ING's appearance in the advisor marketplace seems almost accidental, the firm's chief marketing officer, Ashley Agard, says it has been anything but. “The decision was actually quite strategic and deliberate,” Agard says. That ING offers reps four different flavors of affiliation, for instance, is a specific result of the company's careful evaluation of the brokerage landscape.
One of the forces that has given rise to ING's higher profile is the increasing pressure wirehouses are placing on their reps. “Independents were a fringe group 10 or 20 years ago; now, they're the mainstream,” says Andre Cappon of the New York-based consultancy, CBM Group. “A lot of this is because the wirehouses have been upping their average production and throwing people out.”
At the same time, the indie route is fraught with its own perils, including more complex regulatory requirements, higher liability costs and an increased need for sophisticated technology. This is where companies like ING, as well as competitors like Raymond James, LPL Financial and AIG, come in. The firms help indies tackle the largest of these logistical hurdles while still giving them the autonomy to chart their own strategic course.
Many indie firms, including ING, give reps a choice in how they affiliate with their various b/d units. For instance, Securities America, the b/d owned by American Express, recently set up two new affiliation models for its reps. In March, Raymond James launched AdvisorChoice, which offers five options, ranging from very independent to pseudo-wirehouse. “It made sense that we offer people choice rather than a one-model-fits-all approach,” says Bill McGovern, head of business development at Raymond James Financial Services. “We feel it's time the broker/dealer industry treated advisors like adults and professionals.”
The ING Way
How does ING differentiate itself from this pack? According to Brown, by aiming to deliver “the best of both worlds.” She says affiliating with ING allows an advisor to hitch a ride on the brand recognition ING is building with its high-profile marketing campaigns while retaining a DBA (“doing business as…”) status.
Amid all this, ING has made it clear that its intentions in the advisory business are serious. After four years of acquisitions, the firm spent a couple of years consolidating. Then, in January 2004, it organized itself for the long haul, creating four separate entities: ING Financial Partners, Multi-Financial, PrimeVest and Financial Network. Each has its own personality and menu offerings — for reps as well as clients.
ING Financial Partners, for instance, is the unit for reps who want to make heavy use of the ING brand. Financial Partners is the result of a merger between Locust Street and Washington Square Securities — two firms that primarily worked with insurance agents and with reps who focused on insurance and estate planning. The typical rep affiliated with ING Financial Partners hailed from “larger shops, so they are used to more structure,” says Agard.
This is the only b/d that brandishes the ING name in its masthead and is therefore suitable for those who believe the now-familiar lion symbol will enhance their credibility. “The reason we moved in this direction [of co-branding] is because our reps were asking for it,” says Brown.
Unsurprising, given that ING's expansion into the b/d market coincides with its parent company's becoming more recognized in the financial marketplace. Market research shows that ING brand recognition has grown from 8 percent in the late 90s — “which, by the way, means that no one recognized it,” says Brown with a laugh — to 62 percent today. The firm now has a presence in banking (including its competitively priced direct banking arm), mutual funds, employee benefits, insurance and trust management.
ING's history dates back to 1991 in the Netherlands, when the legal restrictions on mergers between insurers and banks were lifted, prompting insurance company Nationale-Nederlanden to merge with the bank NMB Postbank Groep. The new entity, Internationale Nederlanden Group, was soon abbreviated to the ING group. Today, the global financial services company operates in over 50 countries, offering banking, insurance and asset management. In the U.S., its operations are based in Atlanta, while the Advisors Network is headquartered out of Torrance, Calif. It is traded on the NYSE.
While ING Financial Partners offers the in-your-face brand, the other units give reps the option of using the ING lion in more subtle ways.
The St. Cloud, Minn.-based PrimeVest unit deals exclusively with financial institutions, such as banks and credit unions. Almost all its reps are dual employees of the financial institution and the b/d.
The Multi-Financial unit differentiates itself by retaining its “boutique” feel despite its growth. It follows the OSJ (office of supervisory jurisdiction) model, which means that the b/d merely supervises the reps, leaving them largely alone to manage their practices. Multi-Financial, the result of the merger of two small boutiques, Vestax Securities and Investors Financial Group, is home to the most “pure independents” in the ING fold, says Agard.
The largest of the lot is Financial Network, which grew out of Aetna Financial Services. This unit is a broad-based financial planning organization, with over 3,000 producing reps, running under a “regional director” system. It offers reps a middle ground between flexibility and independence — they have the choice of doing business under their own names while also alluding to themselves as “an ING company.” About 50 percent of all ING reps have opted to sport such a tagline, and the reason for this is clear.
“When I was with Washington Square, you had to explain what ING was,” says Ronnie Metcalf, a regional manager and recruiter with ING Financial Partners in North Carolina. “Now you go in with the ING brand, you immediately get people's attention.” In addition to brand recognition, the company offers a variety of services that are an outgrowth of its acquisitions, including in-house trust management through Reliastar.
What next? The lion is finally poised to reap the synergies of its acquisitions and consolidations. “We are going to start telling our story,” says ING Advisors Network CEO John Simmers. “We've been very quiet during restructuring,” but the company plans to start making more noise in the coming months.
Brown says ING will probably add 5 percent to 10 percent more reps to its salesforce over the next 12 months, but notes that there is also a drop-out factor, especially among those who were doing this business part-time. That fact — that independents as a group are more prone to switching allegiances than “captive” reps — is one of the major challenges facing ING in the coming years. Another is the fact that the exodus of reps to the independent side of the business appears to be on the wane. According to Boston-based research firm Cerulli Associates, the ranks of independent b/ds are thinning (by a projected 1 percent to 82,306 in 2004) for the first time in years.
Still, with the independent model continuing to appeal to a large swath of the financial advisory community, ING's strategy of luring reps with an increasingly visible brand name could well prove a winning one. And it won't be hard to judge how the firm is doing: If you see more orange, all is well.
Reps can affiliate with ING through four units.
ING Financial Partners is the unit for reps who want to lean heavily on the ING brand and on its support.
PrimeVest deals with reps through banks and credit unions.
Multi-Financial is ING's “boutique” channel favored by “pure independents.” It follows the OSJ (office of supervisory jurisdiction) model, which means it largely leaves reps alone to run their practices.
Financial Network is the broadest and most popular avenue of affiliation. It allows reps a middle ground between independence and reliance on ING.