Noise

The future of online financial guidance starts with the customer

In its Retail Distribution Review research, the ABI estimated last year that some 30 million people in the UK won’t pay or can’t afford to pay for face to face advice once the adviser charge is introduced post January 2013. This was based on a current average commission to advisers of around £670. As we know, in the new world post RDR advisers will have to clearly explain what the customer gets for his service and have a convincing proposition to justify the charge.

In the new world we have to segment customers and put ourselves in their shoes. What are they thinking and what do we want them to think?

Some customers will be thinking: “I pretty well know what I want and was previously  using the IFA for convenience, maybe reassurance and probably because it saves me a bit of time”.  A number of these people will be happy to do it themselves but may need some help during the different stages of the decision and implementation process should they choose to go it alone.

Some customers will be happy to pay for the initial advice and then want to save on fees which would have been charged for the IFA to implement the advice. These people will be looking for the step by step implementation process and the ability to relate it back to the advice plan. They may feel more or less confident about doing this as their driver is to save on fees without diluting the advice they have just paid for.

And then there will be customers who won’t feel happy to look for online guidance or to self-implement, but will use the internet to improve their knowledge prior to the advice meeting.

These are different scenarios and very different client types. All will include confident customers as well as those who need much more guidance.

For brands contemplating their strategy for providing online guidance and or advice, the latest digital innovations offer some exciting opportunities and techniques to engage consumers in a way that just might get them more interested in their personal financial situation.

Imagine a world where customers are engaged in personal financial investigations via a community game. As they play the game they are building up a needs analysis for themselves. As they compete with other members of the community they are testing out different scenarios and outcomes for decisions they may make in real life. By interacting with the community they can get peer to peer advice, something they’ll be used to in other areas of their lives such as clothes buying or electrical goods [Amazon : customers who bought X also bought Y. fashism.com where customers try on clothes online for their friends to comment on].

Imagine a world where customers of your brand get together and co-create the services they want you to offer. In doing so, they beta test new ideas, new processes and develop the optimum customer experiences.

When it comes to financial planning and advice people buy people. The online world today lacks the degree of human interaction that builds confidence and trust. Digital innovation will be necessary to create a more humanised experience, a more engaging and entertaining environment, using 3-D, holographic avatars, real time dynamic personalisation, augmented reality browsing. All this will be taking place on all sorts of mobile devices at a time and place that suits the customer.

Brands need to begin contemplating a world with less advisers grappling with the challenge of servicing more consumers, plus a large number of orphaned customers, plus a significant number of people who won’t pay for advice. Determining your strategy all starts with the customer in order to understand their mindsets. Recent research from NMG showed how existing investors are prepared to undertake more holistic financial planning online given additional support. The sort of functions they might respond to include; integrated telephony so they can speak to a call centre representative whilst doing their planning. Live web chat with forms and sales aids and prompts pushed via white boarding and file sharing in real time. A process which reinforces their understanding of the advice before it is actioned. More tools and calculators but with exciting game-style interfaces.

There is no doubt the shape of financial guidance and planning will for many consumers look very different in the future. For brands to be successful we believe in building your proposition completely around the customer and don’t be tempted to talk IT functionality as a starting point. The bakehouse concept of NOW Marketing will be key to success as it requires an approach that is one to one, permission based, leverages social networks for word of mouth and is delivered in real time. These may sound like buzz words now but will be very much part of the fabric of the future before we know it.