Investment banking has always been a cut-throat business but US and
European expansion in the sector has created an urgent demand for top-
level PR advisers
Last week PR Week reported that three top US investment banks are on the
hunt for leading executives to head their European PR operations.
This could just be coincidence, a periodic shake-up of top PR positions.
But more likely, it is illustrative of some interesting developments in
the sector. A closer examination reveals a soaring demand for high
calibre corporate communicators in the Square Mile. It also suggests a
difficulty in recruiting the required talent and the daunting nature of
some of these posts.
The investment banking sector is now even more competitive -
characterised by recent US expansionism, Euro-merger mania and some
Over the past three years ‘bulge bracket’ names from Wall Street such as
Goldman Sachs, Morgan Stanley and Lehman Brothers have become better
established in Europe. Corporate profiles have been raised and media
curiosity stimulated as these firms have targeted new geographical
markets, particularly in Eastern Europe, with London as their base.
Expansion has created a need for fresh marketing strategies and
presented an opportunity for profile- building from scratch.
Lehman Brothers, part of American Express until 1994, appointed John
Godfrey as head of European corporate communications in November last
year. He says a ‘major part’ of his role is to develop these new markets
and the company’s independent identity.
US giants are not alone in their hunger for growth. Leading European
banks, dissatisfied with their domestic returns, have recognised the
need to be more international and moved into London’s investment banking
centre, often by aggressive acquisition.
In 1995, German banks Dresdner and Deutsche Bank took over British
investment banks Kleinwort Benson and Morgan Grenfell respectively.
Swiss Bank Corporation’s high-profile acquisition of SG Warburg in May
last year highlighted the challenges faced by the new conglomerates in
terms of cultural integration. Consolidating firms may be forced to
rethink corporate identity and carefully consider internal
As if this wasn’t enough, there have been a number of scandals in the
industry that have needed some careful communications strategies.
Goldman Sachs was forced to gear up its PR support in 1991 to handle
media probing into its involvement in the Maxwell pension funds affair.
The Barings disaster speaks for itself and, more recently, Morgan
Stanley faced heavy criticism for controversial investments in
These developments should also be viewed in the context of a new breed
of financial journalist, the growth of financial newswire services and
an expanding portfolio of national and trade publications covering the
sector. As the volume of work grows and the media pack bays at the door,
senior banking management may feel exposed and look to a silver-tongued
media strategist to ease their fears.
‘London’s investment banks have lagged behind the US in their
appreciation of PR value,’ says Paul Downes, chief executive of
financial PR consultancy Merlin. ‘The US has been quicker to recognise
that professional presentation of a bank’s public face can have a big
impact on the bottom line.’
Downes adds: ‘The City is waking up to the need for planned
communications. It has always recognised the value of publicising its
successes but many firms could be accused of inertia and arrogance in
lacking an ongoing dialogue with the media.’
The new interest in senior communications personnel is good news for the
PR industry but despite the six-figure salaries on offer, the appeal may
‘Such jobs are intensely political, more so than the equivalent position
in a FTSE company,’ says John Jay, business editor of the Sunday Times.
‘Investment banking is a people business and one may have to deal with
individuals that are highly incentivised.’
It’s a sector characterised by big deals and big egos, high pressure and
short fuses. It is perhaps significant that few people from the banks
were willing to talk on the record for fear of being seen to be trying
to raise their own profile. The senior PR person will have to be tough
to deal with financiers and journalists alike. ‘There are relatively few
people around who are able to deal with financial journalists and have
credibility with merchant bankers, who are themselves used to dealing at
the highest levels in client organisations,’ says Simon Brocklebank-
Fowler, MD of Citigate Corporate.
This could be one reason why the banks have recently tempted a number of
City journalists into financial PR. November saw Daily Telegraph City
diarist Damien McCrystal and the Independent’s Simon Pincombe join UBS.
Peter Krijgsman, formerly with the Evening Standard, has joined US firm
But there are positive implications for consultancies with a investment
banking track record. Agencies guide banking bigwigs through the denser
media jungle and help develop their new corporate images. They may also
play a vital role in supporting the newly-appointed individuals while
they find their feet.
This year has already seen the Amalgamated Bank of South Africa appoint
Shandwick Consultants and German-owned West Merchant Bank sign up
Citigate for a six-figure campaign.
Six figures could also be the size of annual wage packets if PR
practitioners choose in-house jobs well. But while salaries are high and
the positions challenging, there might be no more free lunches.