Market regulator SEBI’s colour code might be only for mutual fund schemes. But do these colours have larger implications for financial service brands?
The Oxford dictionary online has it that “colour” is among the top 1,000 frequently used words. Marketers love it too, for colours are a powerful mode of communication to stakeholders, define a brand’s identity and differentiate it from the competition.
So when capital market regulator SEBI decided to depict investor risk in mutual funds through colours it generated a lot of interest. According to the regulator, every mutual fund scheme’s communication to investors including advertisements would display a coloured label depending on the risk (high, medium or low) to the money invested. The regulator mandated the use of blue for low risk, yellow for medium and brown for high risk. Mutual fund houses now use colour to label their schemes according to their nature (wealth creation, regular income), time horizon (short-, medium-, long-term) and investment objective, followed by asset class and, importantly, the risk. The product labelling has to be disclosed in the scheme document, applications and advertisements.
In one shot, SEBI had made risk assessment simpler for the financially illiterate. It is also seen as an interesting means to communicate investment risks swiftly to the investor. However, it also raises its share of concerns and questions. As colours are known to work their way into consumer sub-consciousness across cultures (see box in Page 2), will consumers frown at financial brands sporting blue, yellow and brown, especially the last two? After the SEBI diktat, are CMOs in the financial services sector actively debating the need to carefully reassess the colours they choose for their brands, or steer clear of brown and yellow colours in their brand communication? Does SEBI’s edict affect communication, identity and their ability to differentiate themselves in the competitive arena?
Colour compliance
First, why did SEBI choose these three colours when many mutual funds use them? A SEBI official says, “We did not want to use strong colour palettes such as green and red. That’s why we settled for blue (principal at low risk), yellow (medium risk) and brown (high risk) when we devised product labelling for mutual funds.”
For banking, financial services and insurance (BFSI), being in the business of trust, the use of blue either in communication or logo or as brand colour is a no-brainer. To a great extent it is religiously followed by most brands. And brands understand how colours take different dimensions across culture and geographies. (See table in Page 2).
Waqar Naqvi, CEO, Taurus Mutual Fund, said Taurus’ maroon had been in existence even before the SEBI circular on product labelling was issued. “While we have to live with it, most of our investors know that brand colour is different from the product label.” Others agree with that assessment. Akshay Gupta, MD & CEO, Peerless MF, says there is no concern as the company's colours come either on the top or at the bottom of the key information memorandum. The colours associated with the scheme are within a box inside the information memorandum. Even a cursory glance through the document makes it easy to distinguish, he adds.
Arun Kejriwal, Founder, Kris Research, however, has questions. “When everybody is supposed to use the same colour code how does one mutual fund scheme stand out from another? Second, when a stock exchange itself uses a colour do investors have to keep the same code in mind or not, he wonders.
Those who had bucked the trend and taken on other shades have their reasons too.
Ramnik Chhabra, Head - Marketing, Motilal Oswal Financial Services, says, “We use orange or marigold as it stands for optimism and suits our business of being brokers/ advisors/ wealth creators. It signifies that we are bullish. Plus, the colour marigold is considered auspicious and the colour of celebration in Indian culture.”
The firm chose this palette for a strong visual identity and to set it apart from rivals. “Other colours in our communication include red for passion, action, purity, auspiciousness and a very high level of integrity; and yellow, which is the colour of knowledge and intellect, as our brand stands for knowledge, research and advice.”
In cases of joint venture, the rationale for using a colour scheme could be as simple as using the lead partner’s tint. Aneesh Khanna, Head - Marketing and Product Management, IDBI Federal Life Insurance, said, “We are a joint venture between IDBI Bank (48 per cent) / Federal Bank (26 per cent) and Ageas (26 per cent). IDBI as the lead partner drives the primary determinant of colour. As the 18th player in the life insurance space, we required a heritage to bank on, which we got from IDBI, and a colour scheme which could cut through the clutter.” He explains that block teal (a hue made up of green and blue) is easy to identify and represents trust, balanced growth, freedom, innovation and forward movement. Block orange is for joy, energy, creativity, vitality and dynamism and is used as teal alone could not have cut through the clutter. “A lot of communication is in white, which depicts truth, openness and purity,” says Khanna.
The Oxford dictionary online has it that “colour” is among the top 1,000 frequently used words. Marketers love it too, for colours are a powerful mode of communication to stakeholders, define a brand’s identity and differentiate it from the competition.
So when capital market regulator SEBI decided to depict investor risk in mutual funds through colours it generated a lot of interest. According to the regulator, every mutual fund scheme’s communication to investors including advertisements would display a coloured label depending on the risk (high, medium or low) to the money invested. The regulator mandated the use of blue for low risk, yellow for medium and brown for high risk. Mutual fund houses now use colour to label their schemes according to their nature (wealth creation, regular income), time horizon (short-, medium-, long-term) and investment objective, followed by asset class and, importantly, the risk. The product labelling has to be disclosed in the scheme document, applications and advertisements.
In one shot, SEBI had made risk assessment simpler for the financially illiterate. It is also seen as an interesting means to communicate investment risks swiftly to the investor. However, it also raises its share of concerns and questions. As colours are known to work their way into consumer sub-consciousness across cultures (see box in Page 2), will consumers frown at financial brands sporting blue, yellow and brown, especially the last two? After the SEBI diktat, are CMOs in the financial services sector actively debating the need to carefully reassess the colours they choose for their brands, or steer clear of brown and yellow colours in their brand communication? Does SEBI’s edict affect communication, identity and their ability to differentiate themselves in the competitive arena?
Colour compliance
First, why did SEBI choose these three colours when many mutual funds use them? A SEBI official says, “We did not want to use strong colour palettes such as green and red. That’s why we settled for blue (principal at low risk), yellow (medium risk) and brown (high risk) when we devised product labelling for mutual funds.”
For banking, financial services and insurance (BFSI), being in the business of trust, the use of blue either in communication or logo or as brand colour is a no-brainer. To a great extent it is religiously followed by most brands. And brands understand how colours take different dimensions across culture and geographies. (See table in Page 2).
Waqar Naqvi, CEO, Taurus Mutual Fund, said Taurus’ maroon had been in existence even before the SEBI circular on product labelling was issued. “While we have to live with it, most of our investors know that brand colour is different from the product label.” Others agree with that assessment. Akshay Gupta, MD & CEO, Peerless MF, says there is no concern as the company's colours come either on the top or at the bottom of the key information memorandum. The colours associated with the scheme are within a box inside the information memorandum. Even a cursory glance through the document makes it easy to distinguish, he adds.
Arun Kejriwal, Founder, Kris Research, however, has questions. “When everybody is supposed to use the same colour code how does one mutual fund scheme stand out from another? Second, when a stock exchange itself uses a colour do investors have to keep the same code in mind or not, he wonders.
Those who had bucked the trend and taken on other shades have their reasons too.
Ramnik Chhabra, Head - Marketing, Motilal Oswal Financial Services, says, “We use orange or marigold as it stands for optimism and suits our business of being brokers/ advisors/ wealth creators. It signifies that we are bullish. Plus, the colour marigold is considered auspicious and the colour of celebration in Indian culture.”
The firm chose this palette for a strong visual identity and to set it apart from rivals. “Other colours in our communication include red for passion, action, purity, auspiciousness and a very high level of integrity; and yellow, which is the colour of knowledge and intellect, as our brand stands for knowledge, research and advice.”
In cases of joint venture, the rationale for using a colour scheme could be as simple as using the lead partner’s tint. Aneesh Khanna, Head - Marketing and Product Management, IDBI Federal Life Insurance, said, “We are a joint venture between IDBI Bank (48 per cent) / Federal Bank (26 per cent) and Ageas (26 per cent). IDBI as the lead partner drives the primary determinant of colour. As the 18th player in the life insurance space, we required a heritage to bank on, which we got from IDBI, and a colour scheme which could cut through the clutter.” He explains that block teal (a hue made up of green and blue) is easy to identify and represents trust, balanced growth, freedom, innovation and forward movement. Block orange is for joy, energy, creativity, vitality and dynamism and is used as teal alone could not have cut through the clutter. “A lot of communication is in white, which depicts truth, openness and purity,” says Khanna.