The London Underground is a nasty, brutish place at the best of times, but it is also a wonderful laboratory for branding.
If you can make an impression with a daft, box-sized advert at head level, you can probably survive just about anywhere on Planet Marketing.
As you stand, cramped like sardines in a slowly boiling tin, you are forced to stare at inane adverts about finding love online or borrowing money from Wonga. But last week I was rewarded with a vision that genuinely surprised me.
Was that really an advert for a next generation personal financial services company, on the Central Line, right in front of my nose? Surely not. But yes, newbie Nutmeg was advertising, with a simple pitch aimed at what, I can only assume, to be yuppies.
Catching orphan clients
And next to it was another advert from Aberdeen talking about its investment trust savings plan. As I squeezed my way out of the door in the City, I realised the great marketing scramble for ‘ordinary investors’ – aka orphans – has well and truly begun.
Now, I realise I do go on about orphaned clients a great deal, but that is because I think it is the business opportunity of the decade.
If you have read my columns, you will probably know I think the big stockbroker platforms have the best chance, but first they need to think about approaching the client in a very different way from their existing trading and transaction-driven approach.
Personally, I would put my money on a certain firm in Bristol cleaning up over the next few years, but the market is wide open.
This brings us to the people who should be in pole position – IFAs. Somehow, progressive advisers have to pick their way through the minefield of online to work out a proposition that actually makes money and delivers something genuinely valuable to investors.
Many players are launching platforms, but the vast majority I have seen have a distinctly underwhelming feeling about them.
Last week, I was sent a wonderfully short and “to the point” blog from Investment Week’s sister title IFAonline that first appeared on a site called Adviser Lounge by Abraham Okusanya, principal at paraplanning firm FinalytiQ.
Abraham absolutely hits the nail on the head by declaring the recent spate of D2C launches by IFAs is “ painfully boring (or is that just me?)... I am really struggling to see how jumping on the D2C bandwagon is commercially viable for advisers, especially given the lack of differentiation in many of the launches we have seen so far. The point is, you cannot compete on price in this space (CavendishOnline, ClubFinance and others do it cheaper).
Nor can you compete on the basis that you provide ‘in-depth research’ (HL, Bestinvest and others probably do better).“
In my view, this is spot on. Advisers need to stick with what they are good at in terms of value-add and that is the whole ‘personal thing’. This slightly curious category includes interactivity, positive and negative feedback, elements of education, hand holding and above all general attentiveness to investors.
Fighting the big guys on margin, especially in a world where total costs of ownership cannot be more than 100 to 150 basis points, just is not going to wash.
But Abraham does go on to argue unique innovation could work. He suggests this “might include wowing prospective investors with a super UX (user experience), offering intuitive goal planning and asset allocation tools or services that let clients aggregate their bank accounts/credit cards along with their investments.
Alternatively they might provide some form of gamification and the novelty will attract consumers over more established players”.
I will take Abraham’s argument and push it a stage further. What investors want is three things. They want simple educational tools and help, but with the ability to talk to someone when necessary. They also want affirmation their own ideas are not crazy, which is where the massive potential for social investing comes in.
Lastly, they want the option to separate this knowledge-based process from an actual transaction platform. In time, as you build their trust, they may want to execute through you but for many investors, the lowest cost and easiest UX experience really matters.
David Stevenson is a Financial Times columnist, editor at Portfolio Review and consultant. Follow him on Twitter @advinvestor
To read Abraham’s blog in full click here
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