Consumer Duty; the RFI tsunami and what investors are looking for

There are less than four weeks to go until the Consumer Duty comes into force, and many are working long hours to meet the deadline. At Boring Money we’re still testing consumer documents and helping firms with data points to get everything over the line.

This week, I shared advised customer insights with a group of advice firms, providing a bottom-up framework on how to quantify and measure value. 95% of advised customers report satisfaction – which is great – but there’s a problem here. Most unhappy customers will have left so it’s a flawed way to put yourself under scrutiny.

We track value for asset managers, platforms and advice firms and it is interesting to see the differences between them. Fees are more important in the value equation for asset managers and platforms – less so for advice firms where the relationship and planning are so vital. However, as we know, value is nuanced. For example, advised accumulators under the age of 50 place twice as much importance on performance as the retired, for whom it’s all about the financial planning. We help groups take a measured view on how you cater for value being nuanced and life stage dependant – without getting too far into the weeds.

Data is a vital part of the Consumer Duty solution, and the tsunami of RFIs has started. But it’s really important we hold on to the ‘Why?’ behind all these requests and remember the ultimate aims and ambitions of the Duty before we drown. We’re helping asset managers with end investor data but keeping the focus to some key demographic, timeframes and holding inputs which will support enhancements and improvements, not just Excel spreadsheet filling.

One key example is what interrogating the data around customer vulnerabilities tells us. We know that fund investor vulnerabilities which create the need for additional support are more likely to be around life events and relatively short-term pressures, which make understanding objectives and timeframes of funds vital. The data indicates areas for improvement with marketing teams, and our document testing identifies enhancements which can be made to improve the journey for everyone.

Data will be the focus of one panel in our Consumer Duty conference after summer, as we bring together people from across the distribution channels in wealth, investments and pensions, for a packed agenda at Schroders HQ in London on the morning of 12th September.

Spots are limited and we’re opening them up to clients and supporters first in this email so save your free place at “Consumer Duty – The Sequel”.

What are investors up to?….

As our audience grows, we get more real-time insights on what investors are up to, and what they want to know. Last year, it was much more a world where the Big Dogs with Big Pockets would dominate search on our ISA and pension comparison tables. But this year the top 5 brands which customers surf and review for ISAs are – in diplomatic alphabetical order here – AJ Bell, Moneybox, Nutmeg, Vanguard and Wealthify. Hargreaves Lansdown is not in the top 5 this year.

We’re also not seeing the typical comparison of like-for-like. Top comparisons include Nutmeg versus Vanguard, and Vanguard versus AJ Bell.

There’s a pronounced shift in focus to brand and engagement – engagement with owned channels being more of a focus. On our pages we’ve seen greater appetite for detail and then action. Last year our Content Hubs were dominant - starter guides, or ‘What Is a X?’ , for example. This year it’s more about action, from step-by-step ‘How To’ guides tackling pensions, choosing a provider or researching top performing robos. It’s a subtle shift from Learn to Do.

In part we think our growing brand helps add weight to our opinion. I mean opinion purposefully, which is of course different to information, and which will become even more important as AI rolls out. Our subscriber base is growing fast – we added 20% in Q2 alone to take our subscriber base to 30,000, with stronger growth plans for H2. And our brand awareness moved from 3% of investors in Jan 2023 to 7% in April 2023. As a perfectionist Virgo, I find those numbers slightly disappointing but my Head of Research reminds me that even Vanguard has awareness of ‘only’ 33% of investors and Interactive Investor 13%. So I guess we’re doing OK!

Come and talk to us about how we can help you to engage with and retain your customers, or position your brand for growth.

That’s it for this month. We hope you can join us at our conference in September. And happy hols to any of you jetting off to sunnier climes!

Source: Our figure April survey of 3000 UK adults, the II and Vanguard figures Jan survey of 6000 UK adults.

The Boring Money Insights Team