Wachovia Phasing Out A.G. Edwards Brand
May 26, 2008
Wachovia Corp. plans to phase out the 121-year-old A.G. Edwards name, sacrificing a strong brand for a stronger one.
"At the end of the day, the deciding factor was the huge brand equity and awareness surrounding the name Wachovia," said David Monday, executive director of marketing, innovation and growth at Wachovia Securities LLC. "It's just a more well-known name."
The A.G. Edwards name, which dates to the St. Louis company's founding in 1887, and its flame logo will have disappeared from office signage and elsewhere in the next several weeks. They will officially be retired in February, Monday said.
Wachovia, of Charlotte, bought A.G. Edwards for $6.8 billion in October and made it a part of Wachovia Securities in January.
The acquisition made Wachovia Securities, of Richmond, Va., one of the nation's largest retail brokerage firms, with client assets of nearly $1.2 trillion. It has nearly 18,000 registered representatives in its financial advisory, brokerage and other businesses.
Some banks let acquired businesses keep their names, and some combine the two names, as BB&T Corp. has with certain insurance brokerages (BB&T Huffines-Russell, for example).
Wachovia has a well-known unit that has maintained its own brand identity in Evergreen Investments, an asset management business that was part of First Union Corp. when Wachovia bought First Union in 2001.
Evergreen's mutual funds are distributed through many brokerage firms, including some banks, that compete directly with Wachovia, so it makes sense for Evergreen to have its own brand name, Monday said.
"Most mutual fund families that are associated with a larger institution try to keep a name that is somewhat neutral or separate from the parent if they have distribution across other firms," he said.
There was no such rationale for keeping the A.G. Edwards brand, he said.
With the number of financial advisers within Wachovia Securities and within A.G. Edwards being roughly equal, and the businesses operating as one, "one side or the other had to be converted," Monday said.
Robert Croston, vice president and principal consultant with Wellesley Hills Group, a marketing and consulting firm, said that eliminating the name of an acquired business is the general rule in financial services. Wachovia's move, though it vaporizes the value of the A.G. Edwards brand, is better for the long term, he said.
"Five, 10 or 20 years down the road, Wachovia wants to be seen as that comprehensive financial services institution, and not have a lot of little things they have to explain off to the side," Croston said.
Wachovia is running a multimedia advertising campaign highlighting the combination of A.G. Edwards and Wachovia Securities and alluding to the name change.
A key issue during the transition will be to let customers of A.G. Edwards know that their service will not be affected by the name change, Croston said.
"You want to make sure at all costs that you retain that existing customer base," he said.
Croston said that the ad campaign seems to emphasize Wachovia Securities more than putting A.G. Edwards customers' minds at ease, but Monday said Wachovia has gone to "great lengths" to reassure not only A.G. Edwards' clients, but its advisers as well.
In market research Wachovia Securities conducted before the name change, A.G. Edwards customers said in focus groups that maintaining their relationship with their adviser was their top concern.
Clients have received mailings and statement stuffers assuring continuity, and Wachovia is depending on advisers to carry the same message, Monday said.
Wachovia has focused on gaining the trust of A.G. Edwards financial advisers, who are the company's "primary ambassadors" to their clients, he said.
"We have traveled the country countless times meeting with them and their spouses or partners," Monday said. "We want to help them understand Wachovia and make sure that they feel very good about it."
To help make A.G. Edwards employees feel more welcome, the company is moving the Wachovia Securities home office from Richmond to St. Louis. That transition, which is expected to be completed by February, involves relocating several hundred families to Missouri.
Steve Garmhausen is a regular American Banker contributor.
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