The adperson’s take on “Don’t think of an elephant”

You know that old idea that as soon as someone says “Don’t think of an elephant,” there’s one thing you just can’t stop thinking of.  (Clue:  large, grey, big floppy ears if African, trunk.)

I discovered the adperson’s equivalent many years ago, and to share it with you I have to admit that back in those days I worked (a bit, and among many other things) on advertising for cigarettes. The adperson’s equivalent of “Don’t think of an elephant” was something called the CAP code – I think it stood for Code of Advertising Practice, so it doubled up on the word “code” a bit like the longhand version of the Dutch financial firm ING Group is in fact International Nederlanden Group Group.

The CAP code laid down all the things you weren’t allowed to do in cigarette advertising.  For example, you couldn’t claim that smoking a particular brand made you more successful, or cooler, or more attractive to the opposite sex, or indeed to your own sex.  No adperson in their right mind would want to do anything so ludicrously implausible and crass.  If anyone did, consumers would have mocked the brand to oblivion.  We all knew this.  And yet somehow…

Somehow, the very existence of the code and its many prohibitions meant that we all spent 99% of our time and energy trying to find ways to get round it.  We were obsessed with finding ways to hint, or to imply, on just to enable consumers to conclude, that such-and-such a brand did indeed make smokers more successful or cooler or more attractive or all the rest of it.  It was ridiculous, and our clients’ compliance people nearly always made sure our stupid ideas could never appear.  But, “Don’t think of an elephant” – we couldn’t help ourselves.

The equivalent in financial services is a little bit more complicated – you might say a bit more conceptual.  We’re not allowed to say anything definite about the future performance of investments (except guaranteed investments, obvs, which are a whole different ballgame).

Of course it’s fine that we’re not allowed to, because in our rational minds we don’t want to.  We fully understand that nothing definite can be said.  The whole thing about investments is that their outcomes are uncertain.  And yet somehow, the existence of the rules ensures that we spend 99% of our time and energy trying to find ways to get round them.   We’re obsessed with finding ways to hint, or to imply, on just to enable consumers to conclude, that such-and-such an investment is sure to deliver them an excellent return.  If we could, we’d put a number on it. It’s ridiculous, and our clients’ compliance people nearly always make sure our stupid ideas could never appear.  But, “Don’t think of an elephant” – we just can’t help ourselves.

Don’t worry, I haven’t taken all the good bits out

The book (No Small Change, co-written with my old friend Anthony Thomson) continues to inch its way towards publication (on May 31st), but this last week has seen unusually eventful inching.

It would be churlish to comment in any way other than positively on the role of our delightful publishing team at Wiley, so I’ll politely suggest that the reason no-one there had actually read it until a week or two ago was their complete confidence in its excellence.

However, when someone there did eventually read it, I hope they found it excellent but I know they found it a bit troubling from a legal point of view, with particular regard to a) quite a large number of possible libels, and b) a rather smaller number of possible breaches of copyright.  At the 57th minute of the 11th hour Roger the lawyer was given the manuscript to read, and at the 58th minute he came back with eleven pages of closely-typed areas of concern.

At the 59th minute I sat down to work through them all, and owing to the lack of available minutes there wasn’t much opportunity for negotiation, just an opportunity for JFDI.  A couple of good bits did have to go.  But I’m here to reassure you that there are still quite a few good bits left.  And if you buy a copy, I can share some of the deletions on a one-to-one basis.

 

Honestly, who wrote this rubbish? Ah, I think perhaps I did.

I’m about half-way through correcting the proofs of my forthcoming financial services marketing book No Small Change, co-written with my old friend Anthony Thomson.  For an inveterate copy-tweaker like me it’s a challenging exercise, because we’re under strict instructions not to change anything unless it’s obviously and embarrassingly wrong – a typo, for example, or an incorrect fact, claim or number.

I haven’t actually read large chunks of the book since I finished writing it late last summer, and I have to say I have almost no memory of much of it.  For example, I’ve just read a paragraph slagging off moneysupermarket.com’s website, which I don’t recall ever visiting, and I’m amazed by the apparent strength of my feelings on the subject.

Coming back to all this material with a largely fresh perspective, I find myself frequently unsure whether to leave it as it is or make changes to it.  I don’t really think I have anything much against moneysupermarket,com’s website, and anyway I’m sure they’ve changed it all since the iteration I was writing about.  I know a couple of people there, and I have no desire to fall out with them.  And the criticism I’m making – about a lack of integration with the brand’s TV advertising – applies to dozens of financial services firms:  why should moneysupermarket.com be singled out for such a kicking?

On the other hand, my brief is clear:  don’t make changes unless what’s written is obviously and embarrassingly wrong.  It’s neither, and also it’s actually quite funny.  Unfair maybe, but I think I’ll leave it as it is.

Another day, another rubbish PA system

Out again yesterday evening, this time to hear a talk about Brexit, and for the second day running everything was fine except that we couldn’t actually hear most of it.  This time the problems were a) the French host’s heavily-accented English, b) the fact that the PA made the sound louder but incomprehensibly distorted, c) the main speaker’s extraordinarily rapid delivery, which made me wonder if he has a lucrative sideline in reading out the health warnings in mortgage and investment radio commercials, and d) the absence of a roaming mike, working or otherwise, so we couldn’t hear the questions from the floor.

I’m sorry, I know it’s bad form to use a public medium like a blog to bang on about personal irritations, but surely at this stage of the information revolution we ought to be able to communicate with each other within the confines of a single, smallish space better than this?

How not to launch a book

I went to a book launch event yesterday evening in the hope that I might learn something useful for the forthcoming launch of my book No Small Change, co-written with Anthony Thomson, which I think I may have mentioned.

Amidst the drinks and canapes, there was a presentation and panel discussion which lasted an hour or so.  Naturally the author spoke, and the panel also included a couple of quite impressively heavy hitters from the financial world, with a well-known journalist chairing.

There were over a hundred people present, in a long, narrow room where many of us were a long way from the stage.  So it was a pity that three out of the four speakers’ microphones didn’t work so we couldn’t hear them, and neither did the roving mike so the audience’s questions from the floor were inaudible either to the panel, or to the rest of the audience, or both.  Also, the laptop projecting a very large image behind the panel went onto standby every five minutes, so that the title slide disappeared and was replaced by a huge and distractingly day-glo green message saying NO SIGNAL.

By now you may well have guessed the punchline, which is that the book is about how rapidly and how fundamentally IT is changing the world.  We are, the author tells us, in the middle of a gigantic digital revolution which is utterly transforming how the 7.5 billion people on earth relate and connect to each other, with thrilling and largely unimaginable consequences for the way we live our lives.

I didn’t see any evidence that anyone else noticed the irony of the fact that these messages were being delivered in an environment in which the technology present was actively preventing the people in the room from relating and connecting to each other, but I don’t think it can have only been me.

Note to self:  when launching a book about financial services marketing, make sure the launch marketing isn’t too shabby.

The curious incident of the dog and the auto-enrolled pension contributions

You remember the curious incident of the dog in the night-time?  Of course you do.  (“But Holmes, the dog did nothing in the night-time!”  “That, Watson, was the curious Incident!.”)

Well, we’re now just about three weeks away from the first hike in employers’ and employees’ contributions to auto-enrolled pensions, and the dog is doing nothing in the night-time again.  The silence about this imminently-forthcoming event is deafening – and this despite the fact that the increases are far from insignificant (employers’ minimum contributions doubling from 1% to 2%, and employees’ tripling from 1% to 3%).

No media coverage of the story is listed in the first two pages on Google, and indeed the first three listings all come from that legend of search engine optimisation The Pensions Regulator, which seems to be the only dog ready to go in for a bit of light barking.

I’m not big on conspiracy theories, believing that unexpected events (or absences of events) are usually better explained by cock-up than by conspiracy.  But I do wonder a little bit if some commentators may have been gently discouraged from commentating, on the grounds that if people don’t notice what’s happening to the pound in their pay-packet they’re less likely to start opting out.

With another round of similar contribution increases due in a year’s time, and with incomes still falling in real terms, I don’t really think this radio silence approach is tenable over the next couple of years.  I think we will see steadily-growing levels of opt-outs unless or until we can convince people that contributing really matters, and even in times like these it’s vitally important to take the hit on take-home pay.

And having made that point in favour of contribution increases, I’ll end this blog before I hear those Discouragers knocking on my Camden Town door.

At last, I think Tom Baigrie might have sold me on life assurance

Anyone who knows Tom – and a lot of people do – will agree that there is no more passionate advocate in the cause of life assurance.  He makes the case for it morning, noon and night, and at least once a week he makes it in his column in the trade paper Money Marketing.

To be honest, most of the time it’s water off a duck’s back as far as I’m concerned.  I have nothing at all against life assurance, but I’m not passionately in favour of it either.  On the one hand it doesn’t cost much, especially for those young families with children that Tom’s always going on about, but on the other hand that’s because most of them don’t die at an early age.

But Tom’s column in today’s Money Marketing has jolted my indifference.  In it, Tom has unveiled a New Statistic – to the effect that one in 29 children will lose a parent before reaching the age of majority – which, I’m pretty sure, is the age of 18.

I’m no statistician, but that strikes me as a lot.  Especially since, as I see it, the reality must be worse – if one in 29 loses a parent, then arguably since there are on average nearly two children per family, that must mean not too far short of two children out of 29 will lose a parent before reaching the age of majority.  That would be around one out of 15.  (Something tells me there’s something wrong with this analysis, but I can’t see what it is.)

Anyway, or either way, one out of 29 or one out of 15 is enough to worry quite seriously about.  I’ve been turning the figure over in my mind since I read it this morning, trying to find something wrong with it.  Could it be, for example, that the unlucky children in question are the ones with the incredibly much older and more decrepit dads going round the course for the second or even third time?   Or could it be that when the statistic refers to “losing” a parent, it just means “mislaying” – getting separated on a trip round Asda, say, and being reunited at the checkouts?  But my theories have been getting more and more fantastical.

It’s still not entirely clear to me that a wodge of cash is an acceptable substitute for a parent,  but I can see that it helps.  So, all in all, Tom’s new statistic tells me that actually, the case for life assurance is a good deal stronger than I had ever realised.

So all in all, I’m convinced –  or very nearly.  Just before I change an opinion of a good twenty years’ standing, I wouldn’t mind knowing where that statistic came from.

In hindsight, I preferred it when robo-advisers didn’t advertise

Probably the riff to which I’ve returned most often in this blog in recent years – my Smoke On The Water, my Voodoo Chile (Slight Return) – is the one that goes “None of these trendy new robo-advisers is ever going to acquire a worthwhile number of customers unless they start spending some worthwhile money on advertising.”

Several of them are now spending quite a bit of money on advertising, and I think I was happier when they weren’t.  The trouble is that the advertising is a) terrible, b) all the same, c) lacking in any kind of appealing call to action and d) based on an entirely false hypothesis.

It’s clear that there is now a default expanding-the-investment-market campaign concept, which involves pictures of kooky-looking people (men with ponytails, women with unnatural hair colours, men and women with tats and piercings) and headlines saying in one way or another that they’re now finding investing delightfully easy/accessible/cheap.

But the false hypothesis on which so much of this market is rashly pinning its hopes is expressed more plainly in another current campaign, for another firm whose name I can’t remember.  It’s a tube card showing a pair of remarkably large and ugly trainers among several pairs of polished business shoes, and the headline says (more or less) Now the jeans and the T-shirts can invest along with the suits and the ties.  Clearly the idea here is that thanks to the launch of this funky new robo-adviser, whatever it’s called, the world of investment is now, at last, accessible to younger, funkier, less starchy people who previously felt excluded and unwelcome.

I’m sure there are a few people with whom this message resonates, but I don’t think there are many.  The main reason why people who don’t invest don’t invest, if you see what I mean, is that they don’t want to invest.  As a way of encouraging them to start doing so, offering them an easy, low-cost-welcoming online service is about as likely to be effective as offering me easy, low-cost, welcoming ballroom dancing lessons.  It’s true that I perceive the world of ballroom dancing schools as difficult, quite expensive and not very welcoming, but those aren’t really the reason I don’t engage with it.  The reason I don’t engage with it is that the whole idea of ballroom dancing fills me with horror, misery, suicidal despair and existential dread.  I would rather cut my legs off with rusty scissors than put them to work on learning the steps for the pasa doble or the cha cha cha.  In short, persuading me that I have easy, low-cost, welcoming dancing schools available is a necessary but in itself spectacularly insufficient step towards changing my behaviour.

In writing all this, the thought flickers through my mind that perhaps I’m terribly, disastrously wrong.  Perhaps millions of people with pony tails, pink hair and body piercings are longing for a service accessible and cheap enough to give them an entry into the world of UK Smaller Companies and Strategic Global Corporate Bonds.

In many ways, I’d love to be wrong about it.  But I really don’t think I am.

Why prognostications of an end to financial jargon are jejune

Ha ha, very funny, a blog about jargon with some really difficult words in the headline.  (As you, ahem, already know, “prognostications” = predictions, “jejune” = naive or simplistic.)

In the ordinary way, we get rid of difficult words by doing what I did just then – replacing them with easier words.   In the book (did I mention the book?), the example I give is the rather lovely word “crepuscular.”  Not many people know it, but the problem is solved as soon as you know it means “relating to twilight.”  Immediately, you know a whole lot of things about “crepuscular” – what it means, what it looks like, when it happens, why it happens (more or less).

Contrast that with an unfamiliar word from the language of investment jargon.  To make my point, I’m choosing a tough one:  “equalisation.”  There’s absolutely no way that any better-known phrase or synonym will cast light on this.  There isn’t one.  The word describes an aspect of the workings of investment funds, which you’re never going to understand unless you learn practically a whole book’s-worth of stuff about how investment funds work (starting, for many people, with an explanation of what investment funds actually are).

Here’s an attempt from a website (actually Neil Woodford’s) to explain the term.

“Equalisation is a mechanism used by open-ended collective investment vehicles to ensure that income distributions from a fund can be the same for all shareholders, regardless of when the shares were purchased.

By way of background, funds that distribute income do so regularly – sometimes yearly, sometimes half-yearly, quarterly or monthly. In the case of the LF Woodford Equity Income Fund, income is distributed quarterly. When a fund pays out income, it does so by going ‘ex-dividend‘ (XD). Income that is received by the fund from its underlying portfolio holdings is reflected in that fund’s net asset value until it goes ex-dividend, at which point the income is removed from the fund’s net asset value and is paid to shareholders on the pay date on a per share basis, typically several weeks after the ex-dividend date.

If an investor has bought shares in the fund since the last XD date, he/she has not held the shares for the full period over which income is being received by the fund and so those shares will be grouped separately (usually known as group 2 shares, whereas all other shares are in group 1). When it comes to payment of income on those shares, they will be entitled to the same payment per share as any other shares in the fund, but not all of the payment will be treated as income for tax purposes – part of the payment will be treated as a return of capital. This is known as an ‘equalisation’ payment, because it equalises the per share amount that is paid on group 2 shares with that paid on group 1.  Once group 2 shares have passed their first XD date, they become group 1 shares.”

I can’t find the words to express how utterly unhelpful this definition is to most of us.  Within a dozen words most people’s heads have disappeared below the surface, and they never come back up again.  So it’s “a mechanism used by open-ended collective investment vehicles,” is it?  Great.  That really helps me.  Not.

I’m not saying this to beat up the Woodford website.  I’ve had a go at explaining equalisation once or twice, and I don’t think I did any better.  My point is that often, in financial services, a single word of incomprehensible jargon is in fact the tip of a vast iceberg of incomprehension, so that if you want to make sense of the word you have to melt the whole bloody iceberg.  And, of course, long before you complete that enormous task, everyone will have left your website in search of something – anything! – more rewarding.

In the case of this particular example, you can argue that people really don’t need to know – that millions of people invest perfectly happily in funds without any understanding of equalisation, or indeed any idea of the existence of the concept.  But there are hundreds of other terms that are, or at least seem to be, much more important if people are going to make half-decent investment decisions.  (Pound-cost averaging is always a horrible one to have to explain.  Or rebalancing.  Or index tracking, to people who don’t know what an index is.)

Even after 30 years of writing this stuff, I don’t really have an answer.  Basically, the choice you have if you want to de-jargonify is to be either incomprehensibly brief, or unreadably long, which isn’t really much of a choice.

So, I’m sorry if this blog has turned out to be a bit of a waste of time.  But on the upside, at least you now know what “crepuscular” means.

 

 

Why I don’t think gambling is part of financial services

Did I mention that I’ve been writing a book lately?  Or that it’s called No Small Change and is available for advance order on Amazon?  Oh, I did, did I?  Sorry about that.

Writing a book makes you think about things so that you have something to say when you write about them.  One of the things that my co-author Anthony Thomson and I had to think about was the question of what should, and what shouldn’t, be included within our definition of “retail financial services.”  And without more than a few moments’ deliberation, we decided that gambling – whether in casinos, on sporting events or on who’ll replace Theresa May and when – was out.

If you think harder about it, this was a questionable decision.  As consumers in group discussions never tire of telling us, perceptually gambling exists at the right-hand end of a financial services spectrum which has mainstream investing roughly in the middle or towards the middle-right, and building society savings over to the left.  And in fact there are other things over towards that right-hand end which are undoubtedly gambles, but which are undoubtedly financial services too – things like spread betting, CFDs and these scary-sounding newish things called Binary Options.  At the end of the day, they’re all about putting money in and hopefully, though not probably, getting more money out.

So why did AT and I take seconds to exclude gambling from the book?

I guess partly it’s that gambling doesn’t present itself in any way as a part of the financial services world.  Gambling as seen on TV, at any rate, presents itself overwhelmingly as part of the world of sport – presented by football commentators and pundits, and featuring people, mostly young men plus Ray Winstone,either playing or watching the game and occasionally doing things on their phones while other youngish men plus Ray Winstone shout at us on the soundtrack.

But as financial services marketing professionals, AT and I aren’t taken in by this determination to break the category rules.  Plenty of other brands do that – how about animated meerkats? – but Comparethemarket.com is still part of the financial services world.

No, I think the reason we made the decision to leave it out was simply that we hate it, don’t want anything to do with it and definitely don’t want it cluttering up our book.  The business is horrible, the propositions are horrible and above all the advertising is horrible.  There’s a lot wrong with financial services, and it’s taking a distressingly long time to put it right.  But thank God we’re not working in gambling.