Are you interesting?
On 6th December we held our first Fin-k Tank event. Designed to really dig into the converging worlds of digital and investment. Here are some nuggets from the afternoon to share with you.
Starting with a look at our customers:
1. The average age of DIY investors is 49 years of age
The DIY investment market is attracting a slightly younger investor than it has done to date. The banks typically draw in investors closer to 55 years of age whilst the robos are attracting a relatively youthful 41-year old.
2. Robo assets are pretty tiny today
In fact just 1% of the DIY investing space as at Q3 2017.
The trade press at the beginning of the year was quick to proclaim that the robo invasion was upon us. The analyst was to be replaced by the engineer. The robot would replace the fund manager. There have been plenty of newsworthy headlines since but heading into 2018 robo assets make up just 1% of the DIY investment market.
That said it’s a long-term game. More interesting that Nutmeg’s £1 billion headline is the fact that they have over 47,000 customers on board.
3. It’s still a man’s world – just 20% robo investors are female.
Counter-intuitively, just 20% of robo investors are women. If robos want to command a larger slice of the pie, there is plenty of room for improvement. On reflection this does tie in with a nuance uncovered by our consumer testing – the robos are actually more sterile and techno-speak than the life company’s direct offers which is interesting. By contrast the new Santander Investment Hub has a 54% female split.
4. Here come the banks!
Between Santander, HSBC, and Nationwide there are over 20 million customers that will be directly targeted by the new bank-owned propositions throughout 2018. And yes, we mean targeted. This won’t just passively sit on desktops, waiting to be admired.
In terms of existing brand awareness and resource, these institutions are closest to the pinch point of converting savers to investors. Some new incumbents in robo land are forking out up to £250 per customer acquisition, creeping up to £350 for some traditional platforms.
5. 2018 is gonna be hybrid.
According to Ben Goss, CEO of Distribution Technology, there are over 15 million households with £1k to £50k to invest who could be helped with some sort of a hybrid model offering a form of advice.
He believes that technology can help deliver advice to clients of financial advisers who they would otherwise not be able to engage. He thinks we’re still at the start of the adoption curve.
6. By 2025 there could be £6.5 trillion in robo advice globally
Michael Gruener, MD of BlackRock EMEA Retail thinks that the figures shares by Morgan Stanley stack up. And there’s no time for navel gazing. He predicts that the winners in this space will be built or bought in the next two years.
He’s also of the opinion that robo will evolve into a predominantly B2B story and there will be just three, four or maybe five winners. He points to the relationship which Scalable Capital has with ING in Germany as an example.
The current DIY investment market is heavily populated but there will be tremendous shake-out within the space. Competitive edge will be seized through collaboration, integration and modularity between larger institutions and intermediaries.
7. He also thinks this will be a game which the banks will win
Can the banks be nimble enough to capitalise on their size and scale? Michael believes they can and is very firm in his view. The consensus in the room was that the banks can win the robo advice game. But this won’t be a two-year game, more like a five-year game.
We will be back in 2018 with a bigger, better Fin-k Tank. Kindly hosted by Aviva in their central London HQ (with Europe’s largest cinema screen, no less!) our day will focus on digital, savings, pensions and investments. We aim to inform, to show and to thrill. 20th June 2018 – stick this date in your diary! We want to bring together the best demos, speakers, tech, apps and gadgets – contact us if you have something you’d like to share or see.