Top Financial Services Performers are Not Necessarily Top Innovators, According to Survey of Financial Journalists

Among financial services companies, top financial performers are not necessarily the top innovators, journalists said in a new survey released today by GfK Roper Public Affairs & Media and global public relations firm Manning Selvage & Lee (MS&L). The study, which asked 151 journalists questions about financial services industry leaders in performance and innovation, was part of Roper’s annual Media Perspectives of Financial Journalist’s survey. All reporters surveyed cover the financial services industry.

According to the survey, Goldman Sachs is the clear leader in expected financial performance. When asked what financial services company is most likely to produce the greatest returns to its shareholders in the next five years, 13 percent of those polled named Goldman Sachs; nine percent named Citibank/Citigroup, and six percent said Fidelity Investments. Further down on the list were Bank of America (5%), Charles Schwab (4%) and Wells Fargo (3%). But when asked to name financial services firms most likely to create the next major innovation in the industry, the answers were quite different, almost in reverse order: Fidelity Investments topped the list at 13% of respondents; Charles Schwab at 10%, and Citibank/Citicorp at 6%. Goldman Sachs, the firm with the best perceived financial performance, was at the bottom of the top five (3%).

“These results indicate that journalists covering financial services do not see a direct correlation between innovation and performance,” said Peter Harris, director of MS&L’s corporate practice in New York. “They also suggest that the pay-out for innovation may not be immediate financial gain, but rather a longer-term investment for the future of the firm.”

According to those polled, the companies expected to create the next major innovation will do so based on a history of creating new products (17%), a
strong, assertive, flexible management style (15%), and a culture of being forward-thinking and taking risks (13%). Other top answers included being client-centric and responsive to clients’ needs (6%) and financial stability/the ability to invest in new innovations (also 6%). Strong performers are those that are well managed and have aggressive management (12%), have a high growth rate or a history of fast growth (12%) and a high return on capital (9%).

A review of the journalists’ responses suggest that strong financial performers focus on the company – namely, its growth and global scope – while innovative companies focus on the customer. Being client-centric, respondents said, is a key to innovation, whether it is through filling a customer need, being more accessible, using the Internet to reach the customer or responding to issues that they care about. Journalists also made specific mention of efforts to meet consumer-level needs as an added key to innovation.

The importance of the consumer in today’s world has gotten considerable attention over the past several months. In December, Time magazine named “You” as its 2006 Person of the Year, based on the impact of user-generated content and on consumers’ ability to seize the reins of global media. Major companies are asking consumers to create their commercials, design their cars and supplement their news feeds, and consumers are passionately taking part.

“Fragmentation of the media and increasing customization of new products and services challenges marketers to reach and influence their customers in new ways,” said Harris. “Financial services companies are no exception. The results of this survey suggest that in order for financial services companies to excel at innovation, and ultimately financial performance as well, they must focus their business and marketing strategies on their clients.”

This study, which was conducted by Roper Public Affairs and global public relations firm Manning Selvage & Lee (MS&L), asked 151 journalists who cover the financial services industry open-ended questions about leaders in financial performance and innovation. Survey results were collected by telephone between November 6 and December 15, 2006. Results are not weighted. The margin of error is +/- 8% at the 95% confidence level.

About Roper Public Affairs

Roper Public Affairs, a division of GfK Custom Research North America, was founded in 1923 and is a leading global marketing research and consulting firm with headquarters in New York. Bringing together some of the most renowned U.S. and European research firms in a unified global network, GfK is the fourth largest marketing research firm in the world.

About Manning Selvage & Lee

MS&L is one of the world's leading global public relations firms. Headquartered in New York, MS&L has 41 offices throughout North America, Latin America, EMEA and Asia-Pacific, as well as an extensive global affiliate network. The agency meets the needs of global and local clients by providing best-in-class services in consumer marketing PR, healthcare PR, corporate communications and technology communications, as well as industry-leading work in digital communications. MS&L won PRWeek's Best Use of Internet/New Media Award in both 2006 and 2007.

MS&L is a member of the Publicis Groupe (Euronext Paris: 13057, NYSE: PUB), whose activities span 109 countries on six continents and include advertising, media counsel and buying, marketing services and specialized communications. For more information, visit www.publicisgroupe.com.

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