My wife often quips, “Your phone won’t grow old but I will!” And the fact is that we have all become addicted to our mobile phones.
Nearly everyone (about 80% of the population) in Britain now owns a smartphone. 52% scramble to grab their phone within 15 minutes of waking up – and not just to turn off the alarm. 42% are glued to their phone 15 minutes before they go to bed.
Businesses have followed their customers online and the retail investment industry is no exception.
Some scoff and claim that our industry is filled with dinosaurs who have been slow to adapt to this new digital reality. However, Platforum research reveals that direct-to-consumer (D2C) propositions are the biggest investors in digital marketing.
D2C propositions are allocating more of their marketing budgets to digital than any other sector. When we compare our data on marketing budgets with data collected by our sister brand Econsultancy, we find that:
- D2C propositions allocate 72% of their marketing budgets to digital – higher than any other sector that Econsultancy analyses. That works out to an average of £2.4m per business – out of a total marketing budget of £3.4m.
- Spend on digital marketing is set to grow. 84% of D2C propositions say their total digital spend will increase in 2017. This compares with 73% across all sectors.
Where to next?
We expect to see continued investment in digital among D2C providers in particular to optimise trading websites for mobile and to allow fingerprint authentication.
We’ll be putting D2C propositions through their paces in our forthcoming Investor Experience report. Stay tuned for more on how the digital experience marries with other channels. Among marketers, omnichannel is perhaps an even hotter topic than digital transformation.
Financial advisers
While D2C providers are digital pioneers – we are also observing strong digital adoption among financial advisers.
Research from our sister brand Taxbriefs reveals that most advisers now use email marketing and social media. Nevertheless, we know from our conversations with advisers, that referrals continue to be the main source of new business for advisory firms. So it is unsurprising that the Taxbriefs data show email coming behind referrals, phone calls and live events in terms of customer acquisition effectiveness. Email marketing was nonetheless viewed as an effective customer acquisition channel.
We expect to see continued investment in digital for customer communication across the retail investment industry. We will be looking at this more closely throughout 2017 – across both D2C and advised propositions.