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.