Come on, FS marketers, let’s be ‘avin you.

It seems to have been an obscure American humorist called Olin Miller (not Mark Twain, or Eleanor Roosevelt, or any other of the usual famous-quote suspects, and definitely not Delia Smith) who first  made that mildly deflating comment, “You’d worry a lot less about what other people think of you if you realised how seldom they do.”  We don’t know much about Mr Miller, or the circumstances in which he made the remark, but I wouldn’t be surprised to find he’d recently published a book about financial services marketing.

When my co-author Anthony Thomson and I published No Small Change:  Why Financial Services Needs a New Kind Of Marketing a couple of months ago, we didn’t imagine we’d be rivalling Dan Brown and JK Rowling at the top of the best seller charts.  But, to be honest, having included some original and quite controversial ideas, some harsh and probably unfair criticisms, some surprising new market research findings and some reflections from the individual who is now the UK’s, probably Europe’s and now arguably the world’s leading challenger banker (Anthony, obvs, not me), ,I think we have been a tad surprised by the near-complete silence that has greeted us.

One of the more important ideas in the book is that marketers can never blame their target markets for not getting what they have to offer or hearing what they have to say.  If the target market doesn’t get it or hear it, by definition it’s the marketers’ fault.  Exactly the same is true of authors.  By definition, if people don’t know of the book, or if they do but can’t make any sense of it, then it’s our fault (and maybe also a little bit our publishers and our PR people).

But even so, it’s not quite that simple.  We do know that a lot of our friends, clients and contacts have bought it – after all, we signed several hundred copies at our various launch events – and even if most just bought copies to be nice and show support, there must have been some who intended to read it, or at least part of it.

And yet we’ve only had four reviews on Amazon, and while they are all perfectly genuine reviews from real people who’ve read the book, three of the four did result from email exchanges in which we said how grateful we’d be if the individuals concerned could write up some of the nice things they had to say.  And of course it’s a mixed blessing that all four of the reviews all give us five stars – hasn’t anyone managed to find anything they’re upset about (not even at Barclays)?

I don’t think I’m going to say any more on this subject, because I can feel that I’m on the brink of blaming my readers and that really is a cardinal sin.  But encouraging my readers is OK – so, come on, chaps and chapesses,let’s be aving you – there’s still plenty of time to say something, appreciative, or indeed otherwise.

Making sense of the Moola deal. Or trying to.

Last week we heard news of the latest, though undoubtedly not the last, acquisition of a sprightly young fintech by a cash-and-customer-rich sugar daddy – this time the fintech being robo-adviser Moola, and the daddy being benefits firm JLT.  The stated rationale, which you’ve probably deduced from the identities of the firms, is that everyone’ll win from the introduction of Moola onto JLT’s Benpal (terrible name!) benefits platform. Employees get a new savings and investment option, Moola gets a cheap source of lots of new customers, JLT gets an incremental business stream and I suppose if I was being cynical I’d say that if employees can be steered into Moola rather than increasing their pension contributions, employers might get a welcome reduction in their contribution-matching bill.

What’s not at all clear to me is whether all this is going to work, and if so on what kind of scale.  It comes down – as it has in quite a few other recent blogs – to the question about the level of appetite that exists out there among the public at large for simple, accessible, fairly low-cost investment schemes.  As my regular reader knows very well, I’ve always been massively sceptical about this – and my scepticism hits new heights in the context of an employee benefits platform, where the option most people really should take. increasing their pension contributions, is right there under their noses alongside the non-pension option.

What I think the acquisition does tell us is that up to now, Moola has been struggling to recruit customers at an affordable cost.  (In fact, we knew this already, partly because all robo-advisers are struggling to recruit customers at affordable cost, but also because Moola rather gave the game away with a desperate-looking promotion back in the Spring, offering new investors a whopping 10% cashback after a year.  Canny investment hobbyists immediately took to the message boards encouraging each other to buy in for exactly 366 days and then promptly walk away to grab the best offer on the market in Spring 2019.)  But whether appearing as an option on JLT’s Benpal platform will really change their customer acquisition prospects can’t yet be clear.

Wearing my ever-present sceptical hat, I’d say those prospects aren’t great.  As for whether the parties to the deal would agree with me, I don’t suppose we’ll ever know – or at least, not unless or until JLT chooses to tell us what they paid.

Asset management: the race to be different is on

Over the years, there have been few easier ways to make money than asset management.  It’s not just at the rocket-science, hedge fund end of the market:  for decades, a combination of high and opaque charges, unaware and largely inert customers, uncritical and often conflicted intermediaries and an absence of serious external scrutiny kept the most vanilla of fund managers (of whom there are many) well supplied with six-figure bonuses and top-of-the-range Mercs and Range Rovers.

Perhaps more importantly, these same factors have also combined to keep the market ridiculously overcrowded and undifferentiated.  When you can still make a ton of money running small funds that are exactly the same as everyone else’s and perform no better or indeed rather worse, there are few if any pressures to make the industry more competitive.

Now, though, that’s all changing in the retail market at least, and the active fund management industry is feeling the first stirrings of panic.  Among a long list of things all happening at once, the three most important are:
1.  The somewhat slow-motion effects of the Retail Distribution Review (RDR), implemented in January 2014, which eliminated intermediaries’ financial incentive to recommend high-cost actively managed funds.
2.  The ever-growing body of irrefutable evidence that, not least because of their indefensibly high charges, the very large majority of active funds underperform their low-cost passively-managed counterparts.
3.  The shamefully-belated new effort by the regulator to tackle the industry’s bad practices and help consumers get a better deal.

Over the next few years, the combination of these and other factors will change the industry in many ways.  But the one that most interests me is now clearly apparent:  pretty much all big and reasonably businesslike firms are feeling the need to ask themselves the question:  “What makes us different, a) from each other and b) from passive firms who charge 85% less than we do?”

For most, this is a horribly difficult question to answer, or at least to answer well.  (The troubling answer “Absolutely nothing” is readily available).  A few firms do already own, or in some cases partially own some kind of differentiating idea, and they’re much more strongly placed.  But most really don’t, and it’ll be fascinating to watch them grappling with the issue.

The key issue, it seems to me, will be to do with the balance of power between the marketers and the fund managers.  As I’ve often written in this blog, hitherto this has resided about 98% with the fund managers and 2% with the marketers, whose job is confined to producing the brochures and the sales aids and even then the fund managers tell them what colours they want them to be.

But in the evolving new world in which marketing assets like a differentiated positioning, a strong brand and a convincing value proposition are suddenly absolutely mission-critical, this long-established balance of power isn’t going to work any more.  A bit like star chefs newly-dependent for their survival on their pot-scourers, or airline pilots humiliatingly subservient to the cabin crew, an awful lot of pride-swallowing is going to be necessary.  At the moment, I really wouldn’t like to say whether I think they have it in them.

I was right. We were a better choice for asset management clients.

For obvious reasons I’d better keep this anonymous, but I’ve fairly recently heard some war stories from inside a non-specialist agency pitching for an asset management client.

It’s been pretty fraught, and as you’d expect a lot of the available time has been wasted on getting up to speed with how this difficult and complex industry works, who the target audiences are, what sort of brand promises can be made (and kept) and what restrictions are imposed by the regulator.

But beyond all these issues, most of which I suppose are the sorts of things that arise when an agency starts work in any unfamiliar sector, what’s really struck me is the sheer difficulty of finding a strong creative solution.  All the above issues apply here too, of course, but there are others that present specifically creative challenges.

Of these, two in particular stand out.  The first is the intangibility and invisibility of the whole subject (or at least of 99% of it).  If you’re advertising a beer, there’s a reasonable assumption that you’ll show someone drinking it, or pouring it, or going to a pub, or whatever,  You may not:  but you always could.  Similarly, if it’s a car, I wouldn’t be amazed to see it being driven.  But what does an asset management look like?  Nothing, that’s what.

Then second, there’s the whole.business of uncertainty and unpredictability, which make it more or less impossible to focus on any kind of end benefit.  We may not want to show someone using our shampoo, but we’re almost certain to want to show someone with great-looking hair.  What does someone with great-looking asset management look like, especially on a day the market’s down 10 per cent?

There are plenty of other problems to overcome, but even setting all of them aside these two make it unusually difficult to identify fruitful territory – especially fruitful visual territory – in which to base your creative approach.

In my agency days, I always used to tell clients (or rather, prospects) that they should appoint specialist agencies like mine to solve problems like these, rather than mainstream agencies which – however talented – would struggle even to understand why they were finding it so hard, let alone to identify a solution.  But I always suffered pangs of doubt about whether the mainstream agency people were so talented that it would be worth working through the pain so as to get through, in the end, to the sunlit uplands of a great creative solution.

My recent insight into a non-specialist pitch has belatedly eliminated such pangs.  You’ll never get to the sunlit uplands if you can’t find a way out of the boggy marsh down at the bottom of the slope.

Change neophyte tweaks leading change guru’s tail

Campbell Macpherson’s recent book The Change Catalyst is Business Book Of The Year, and my book No Small Change, co-written with Anthony Thomson, isn’t.  I therefore have a bit of a cheek challenging something Campbell says.

In a blog about his book on his website, which you can find at http://www.changeandstrategy.com/mission-impossible-leading-change-successful-organisations/, he discusses the practical and emotional obstacles that prevent leaders of highly successful businesses from maintaining the capability to achieve change, and gives some hints on how to overcome them.  He strongly believes that these leaders should encourage and empower their colleagues to put forward their own ideas, and the following somewhat edited quote will give a flavour of his recommendations:

“Make continuous improvement a core part of your company’s DNA:  Change doesn’t have to be large and disruptive to be effective. The most effective and sustainable changes are often evolutionary rather than revolutionary. Every leadership team needs to help their people to embrace an attitude of continuous improvement – and empower them to act upon it.

Allow your people to (constructively) question the status quo.  This is where your newer employees will add the most value. Allow them to (constructively and respectfully) query the way things are done.”

It’s true that these are not his only tips on the subject, and at least one of the others suggests more radical measures.   But I do wonder, looking at what’s written here, whether it’s all a bit, well, timid.  I think it was that bracketed “constructively and respectfully” that aroused my suspicions.  Should employees of Pony Express in the US in the 1860s have “constructively and respectfully” have pointed out that the country’s first transcontinental railroad was about to open and would quickly wipe out most of their business when it did?  Should employees of Polaroid in the 1990s have “constructively and respectfully” flagged up a teeny concern that perhaps this digital camera thing might prove a bit of a problem?  I could go on, but you get my point.

And anyway, as I say, my point really isn’t a very fair one.  Campbell isn’t only suggesting constructive and respectful process-tweaking, and anyway such humble actions do often have their place.  On other occasions, though, an expression involving the words “deckchairs” and “Titanic” does come to mind.

We really must start making things simpler. Especially the complicated things.

Abraham Okusanya is unquestionably a good bloke.  He and his investment consulting firm Finalytiq are 100% on the side of end-consumers, and they’re doing everything they can to ensure that fund management firms do their best for them.   But when it comes to one of the fault lines dividing consumers’ real friends from consumers’ not-so-real or indeed false friends, as identified in my new financial services marketing book No Small Change, I’m afraid that Abraham is on the other side of the line from my co-author Anthony Thomson and me.

Let me explain.  Abraham has just written a hard-hitting article in the online edition of FT Adviser that’s highly critical of Absolute Return funds in general, and Aberdeen Standard’s giant GARS fund in particular.  He has one massive objection to them:  they’re far too complicated.  He says:  “Hands up if you really understand how GARS works? Enough to explain it to a typical client? I certainly don’t.  Many advisers and discretionary fund managers who invested in GARS didn’t.  I’ll wager that many analysts and managers who work at the Standard Life multi-asset teams and indeed the most senior people at Standard Life don’t either.”

And he goes on to deliver his coup de grace:  “If all these professionals don’t seem to understand the fund, what hope has poor old Mrs Miggins got?”

Leaving aside my intense dislike of the patronising, alienating and horribly over-used term “Mrs Miggins”, it’s the sense of what Abraham’s saying that bothers me.  Let me be clear:  if he was saying that Absolute Return funds like GARS don’t work, or can only find a market by making false promises they won’t be able to keep, then I’d completely share his intense disapproval.  But he isn’t.  It’s the complexity that’s upsetting him.  And for the life of me, I cannot understand the financial services industry’s obsession with explaining how complicated things work, whether to our colleagues within the industry or to our poor old end customers.

It’s not just Abraham who wants everything explained.  It’s everyone.  It starts with the regulator, who has insisted for years on a regime which provides consumers with rafts of unintelligible and impenetrable detail about whatever it is they’re putting their money into.  It includes all those who keep calling for a massive educational effort to get key financial concepts across to consumers so that they’ll become better able to grasp the detail of what we’re offering them.  And it also embraces all those firms publishing mountains of market reports, pie charts, analyses of one sort or another, fund manager interviews and all the other manifestations of an industry that’s grimly determined to explain itself to people.

No other industry behaves like this.  There are countless examples of industries that provide complex products and services, but which feel no obligation at all to explain how they work either to their end customers or indeed to their intermediaries – or “shops” as they are often known.  People buy all sorts of IT products – phones, tablets and computers – without having the faintest idea how they actually work, and the amiable sales guys and girls in PC World and my Vodafone shops don’t know much more.  You can buy a car without knowing a thing about the mechanics of ABS braking, and perhaps more crucially you can take a daily statin or SSRI tablet without a clue about what they do to your body chemistry (or even what SSRI actually stands for – Selective Serotonin Reuptake Inhibitors, since you ask).  And, trust me, the same is true of your average GP.

What all these things have in common, as well as complexity that makes their workings quite incomprehensible, is a clear and simple message about what they do – or, to put it another way, about why people might want to buy, own or use them.  I don’t know anything about how ABS brakes operate, but I do know that if I put my right foot hard down on the pedal on a wet and slippery road I’ll come to a stop without skidding.  And I don’t know what that Atorvastatin tablet I take every morning does when it gets into my bloodstream, but I know that somehow it reduces my cholesterol level and that makes it less likely that I’ll have a heart attack.  And these simple, clear messages are absolutely all I need or want to know.

At the same basic level, I understand – more or less – what GARS is supposed to do.  It’s supposed to keep going up in all market conditions.  This, I must admit, sounds a bit too good to be true, and makes me wonder whether I’ve got it quite right.  In all market conditions?  Really?  And going up, not just standing still or going down less than the market?  And is this just a pious hope, or a solid promise, or something in between?  (ABS, after all, doesn’t say that it aims to prevent you from skidding, or that you won’t skid quite so much – it says you won’t skid, period, and you won’t.)   As I say, if the GARS/Absolute Return Fund headline promise is false, or overclaimed, then that’s bad and I’m against it.

But if it’s robust, I have no problem with it at all.  And as we move slowly but irreversibly into a world in which consumers are going to have to take more responsibility for their financial security, and make more of their own financial choices and decisions, it becomes more and more important that we present them with those choices and decisions in ways that are meaningful to them.  Which, in turn, means that we have to stop presenting those choices and decisions in ways that are only meaningful to the most pointy-headed specialists and experts in the industry.

In fact, it may well be that in order to present consumers with “headline” benefits that are valuable and meaningful to them, we need products and services which, when you lift the bonnet, are even more complicated than absolute return funds.  That prospect doesn’t bother me in the slightest – provided only that Abraham, and all those others around the industry who think like he does, can be discouraged  from making even more doomed and counter-productive attempts to explain them all.

The book’s out, and only one word describes how I feel

Regular users of LinkedIn will know that the word is, of course, “humbled.”   If pretty much anything good happens to you – especially anything good which makes you feel any emotion in the proud/self-satisfied/vindicated spectrum – the way you feel these days is humbled.

Words change their meanings all the time, and it’s not unusual for them to flip more or less through 180 degrees and start taking on the opposite of their previous meaning.  In somewhat different parts of the English-language forest, words such as “wicked”, “awful” and “egregious” come to mind.   Even by these standards, though, the recent transformation of “humbled” is striking.  According to the dictionary, it means “feeling less important or proud” or in a different sense “decisively defeated.”  According to hundreds of LinkedIn posts, though, it means “proud and happy and wanting to show off about whatever it is, but in a way that doesn’t sound too insufferably smug.”

No Small Change, my financial services marketing book co-written with Anthony Thomson, is now published.  And we’re both feeling truly, madly, deeply humbled.

It’s out. At least, I think it is.

One of the things you don’t know about books until you write one is that it’s not entirely clear when, or indeed whether, they’ve actually been published.  According to Amazon, No Small Change – my book about financial services marketing, co-written with my old friend Anthony Thomson. – isn’t published until June 22nd.  In fact, though, unless I dreamed it, we held two very jolly launch events on Tuesday and Wednesday this week (5th and 6th) and sold a stack of copies at each, and if that’s not “being published” I don’t know what is.

And in fact I can’t have dreamed it, because, as you can see, there is photographic evidence.  And I look so uncharacteristically delighted that I must be holding a real copy of the book and not just some kind of dummy which has to stand in for the real thing until the publication date.  Thomson’s expression is, it must be said, a bit more equivocal.  But then again, he must be balancing uncomfortably on stilts to be towering above me to that extent.

New VISA TV campaign: foolish, brave or just realistic?

It was less than 48 hours ago that a VISA payments meltdown made it onto the national news.  A system crash left queues of frustrated shoppers unable to pay at Sainsbury’s checkouts, among other places – resulting in fleets of abandoned trolleys laden with slowly-defrosting petits pois littered around the stores.

About three hours ago, in a commercial break during the Test Match, I saw a (reasonably) entertaining new commercial.  As I recall, it was set in a bar, where, with painful slowness, a young chap counted out an implausibly huge number of coins to pay for his beer.  Zlatan Ibrahimovic, for it was he, was sitting next to him.  With a bit of sleight of hand and some suitably Ibrahimovicesque remarks, he paid the young chap’s bill with his VISA card.  Either Zlatan, or a voiceover, I can’t remember which, told us how incredibly much easier and quicker it is to buy things with VISA cards than with stupid old money.  “Not on Friday afternoon, it wasn’t,” I and an unknowable number of other viewers said to ourselves.

I don’t suppose it matters very much, but in between the regular fall of Pakistani wickets I’ve been wondering about the decision-making at VISA which allowed this commercial to be shown.  Which is more likely to be the case:
–  As a large, bureaucratic organisation, VISA’s decision-making processes are slow and cumbersome, and no-one was able to postpone the campaign in the time available?
–  The client has decided that ultimately all publicity is good publicity, and a bit of whingeing from a few sourpusses like me doesn’t matter very much compared to the positive halo effect of being associated with Zlatan Ibrahimovic?
–  Some fast-turnaround consumer research indicates that no-one much noticed the crash on Friday, and those who did don’t much care:  as so often with bad financial news, VISA is shielded by consumers’ apathy and indifference, and so might as well bash on with its advertising?

Any views?  And any other explanations?

I hope my co-author won’t be too upset by this

Today, I’ve been working on the brief (yes, honestly, very brief) remarks that my co-author Anthony Thomson and I will be making at the various events coming up over the next week or two to mark the publication of our book.  (You remember, it’s about financial services marketing, it’s called No Small Change and it’s available now for advance orders on Amazon.)

I found myself thinking about how AT and I will come across as a double-act, and which existing and well-known combination people will find us most like.  Will they see in us the suavity, cool and charm of Butch and Sundance?   The talent and competitiveness of Lennon and McCartney?  The humour and rapport of Eric and Ernie?

Then I got it.  It was none of these.  Two grumpy blokes, well past the first flush of youth, sitting on the sidelines and taking pleasure in a stream of rude and irreverent remarks:  to any Muppets fan, we can only be Waldorf and Statler.