Why successful firms will embrace the 3 Cs

Finance has leapt off the personal finance pages and into the mainstream (again) in 2022. It’s harder than ever to make the right decisions and people are looking for help.

Should I fix my mortgage? Should I go to cash? Should I stop my pension contributions? How much higher are interest rates going to go? Aaaaghh!?? And with all of these questions of course come anxieties.

Our quarterly investor tracker has shown consumers’ sentiment about both their personal financial situation and stock markets at lower levels than they were during the pandemic. Future investment intentions have fallen pretty much across the board, with only sustainable funds showing relative resilience in terms of purchasing intent.

Particularly against this volatile backdrop and the personal squeeze we all feel, consumers value more than just performance and price. I don’t really buy the argument that value is nebulous and impossible to articulate. The relative weightings of various things differ on an individual level, but the main component parts of value are able to be defined and measured.

What does 27% x 9% = ?

We’ve been tracking what fund investors value for over three years now, and knowing what to expect, understanding what is going on and being able to access key information easily is a fundamental part of the value equation. With document testing brought back into focus by the Consumer Duty requirements, I think it worth reminding firms that only 27% of fund investors could comfortably explain asset allocation. That’s fund investors by the way, not people. And only 9% of British adults identify as fund investors. (A large chunk of people who have funds, have no idea they have funds!).

So. Remind yourself that 27% of 9% can comfortably explain asset allocation – and then have another look at that letter, that factsheet, that web journey. Equity? Nah. ISIN. Pardon? Risk profile? Come again? And how confident did you last feel navigating your way through a place where no-one spoke the same language as you?

Meet The 3 Cs

As the world goes disconcertingly mad, we will find more value in trusted people, speaking a language we understand, giving us communication, confidence and convenience.

Our new Platform Value Tracker consolidates our learnings based on millions of users of our Best Buy tables, and supporting research projects. Convenience here – more so than for intermediated asset managers – is key, even critical for some customers. As someone at a challenger bank said to me today, how many people want that extra 0.1% interest rate if they have to send in a certified copy of an address to open an account, or go to a branch? The same becomes true for a platform with a sub-standard digital journey. They fall at the convenience hurdle.

As we continue down the path of short-term noise, volatility and political ‘goosery’, the 3 Cs will be some of the only things in our control. Communication. Confidence. Convenience.

Anyone who doubts this should look at how Peter Hargreaves tackled 2008. As others fell silent, HL went into communication overdrive, building some pretty unassailable foundations.

Let’s be clear – people do want GOOD communication

The thirst for information is real. Our upcoming Pension Report (join our launch webinar next Tuesday at 9am) confirms that 53% of the pension accumulators/non-retired UK adults that hold a pension would like a better understanding of what’s in their pension. As tough as the backdrop us, people want to understand. They want to know what to expect. And they want the journey to be easy.

We are supporting many banks, advice firms, platforms and asset managers today to understand and track value; to understand consumer outcomes; to test documents with clients – and to build, plan and deliver good communications with clients and investors.

Please talk to us about how we might help you. Communication. Confidence. Convenience. Three things we can control.

Holly