We may hit peak oil before 2020 after which production goes into terminal decline. At the D2C & Digital Investing conference last week, it was suggested by Econsultancy founder, Ashley Friedlein, that we have already hit peak CDO – the point at which the Chief Digital Officer function is most prevalent in companies. Of course this isn’t suggesting that ‘digital’ is in decline – in fact, the opposite – but as digital becomes part and parcel of every aspect of business, the concept of giving responsibility for it to one individual becomes outmoded… unless that one person is the CEO!
What other nuggets came out from the day?
Interactive investor confirmed that it intends to roll out fixed pricing to its combined customer base following the acquisition of TD Direct Investing. However, low-cost status isn’t the preserve of the fixed-cost provider with Vanguard going direct and Barclays showing with its new proposition that banks can be competitive both in terms of pricing and consumer engagement.
Vanguard’s, Rob Fisher (Head of Retail Growth) talked about how investing should not be just for the rich; which sounds remarkably similar to the ‘democratising wealth management’ mantra of the robo advisers. Talking of which, Nutmeg announced that it has acquired over 20,000 clients in 2017 taking total customer numbers to over 45,000 and assets to more than £900m. Half are first time investors and CIO, Shaun Port, says that the breakeven moment is within their control.
Meanwhile, Chris Worle, Digital Strategy Director at Hargreaves Lansdown, talked about how it can be difficult to challenge a traditional model internally when everything is going well. HL won’t be complacent but it will be increasingly challenged. While AUA levels for individual propositions might bump around a bit over the short term, it won’t be long before we begin to get an idea about which big bets pay off. Platforum will publish our latest direct platform AUA next week – UK D2C Guide: Direct Platform Market Update.
Chris pointed out that “scale brings headaches” and a need to focus on core. Possibly a reference to HL’s decision to drop its P2P platform. However, outsourcing also has challenges and consolidation around a few tech providers means there will be a slower pace for all those working on projects according to Head of Aberdeen Digital and Parmenion, Martin Jennings.
Consumer engagement is a key battlegrounds and Santander’s James Dunne advocated using “Daily Mirror language” to talk to consumers. He also talked about taking compliance with you on the journey of building a proposition and its messaging.
Daniel Godfrey of The People’s Trust thinks that we need to give end-investors more kudos than we do for understanding of some investment concepts like the difference between permanent loss of capital and short term volatility. His advice: “When the plane hits turbulence, it’s better to tell the passengers to put on a seatbelt rather than a parachute.”
Finally, we heard from Paul Lewis, the presenter of Radio 4’s Money Box, on the “ridiculous distinction” – in his view – of ‘advice’ and ‘guidance’. Cutting down the “ridiculous options” that are thrown up as a part of a guidance process is common sense but turns guidance into advice. Paul talked about how millennials want their pension to work through an app but how Artificial Intelligence (AI) will make this possible through a voice activated system like Alexa. (AJ Bell Youinvest would point out that they already offer account interaction via Alexa!)
To quote Paul: “The future of financial guidance is financial advice. The future of financial advice is Artificial Intelligence.”
That debate will continue to rumble but will now involve the Chief Digital Officer… AKA the CEO!