If you want to read a good book, which isn’t fiction, stick all those horrible business books back on the shelf in WHSmith where they belong. Instead, try picking up The Seven Basic Plots: Why We Tell Stories by Christopher Booker.
In it you’ll find proof of the old adage that there are only a few stories under the sun. For interest – mine mainly, not yours – here are the ones that Mr Booker identifies:
• Overcoming the monster
• Rags to riches
• The quest
• Voyage and return
• Comedy
• Tragedy
• Rebirth
Everything else is a function of those seven – an inversion, a twist, or a combination of the basic plots.
I like this, and so I thought I’d have a crack at doing the same for financial services. And anyone thinking about an FCA gag for ‘Overcoming the monster’ should behave themselves.
So here are my six basic plots for financial services:
• Protecting something worthwhile
• Borrowing money
• Putting money into something
• Mucking about with your money
• Getting your money back out again
• Passing money on
I tried to find more, but couldn’t.
Mixing up the plot
Within these, of course, are lots of variations, and that’s where advisers make their coin. For example, in the ‘Mucking about with your money’ story, many advisers work hard to make sure clients don’t buy high and sell low due to taking fright when there’s silly investment news on the telly.
I’m thinking about all this because part of what my company does is help firms big and small communicate what’s splendid and funky (splunky?) about what it is that they do. And many of our clients are working very hard on new widgets, gewgaws and hoojicumpoovies for their platforms and retirement income products in light of new pension freedoms.
New things are always fun to write about, and advisers aren’t afraid of detail, so it’s all fine. But I’ve noticed a disturbing tendency in recent months for both advisers and providers to repeat past sins in terms of thinking that the product itself is the message.
This is particularly concerning in the platform space. If we plotted the six basic plots – for what else would one do with a plot than plot it? – on a time-based plot graph, it would look like a sort of bell curve with wobbly bits on it. You’ll have to imagine that. Platforms’ jobs are to travel with the client as she ascends and descends the bell curve and navigates the wobbly bits. Stop giggling.
My point is that, from what I’ve seen, the work around enabling the new pension freedoms is no more and no less than what an individual who is moving from the Mucking about with your money (MAWYM) story to the Getting your money back out again (GYMBOA) story would expect. In fact, the excitement we’re starting to see around pensions has quite a lot to do with the fact that (as Mr Booker would say) the GYMBOA story has been broken for a long time; it’s now coming good and as a result some cognitive dissonance is being removed. What we’re seeing is a sense of relief; a reassertion of normality as it’s understood by real people rather than actuaries.
From a technological point of view, very little interesting is happening with all this. The fuss and hoohah around new propositions and how GYMBOA (the word ‘decumulation’ now results in a £10 fine in the lang cat office) will work is purely inside baseball.
Less is more
I’ve written before in other, lesser publications that the last thing we need in this market is ‘innovation’. That’s usually a sign of additional bells and whistles in the name of competitive advantage, which few people outside the proposition team need, want or have an interest in. But the more I look at this space, the more I think that there’s simply no such thing as innovation; it’s not possible. All there is is a basic plot, which is inescapable. And all providers can do is tell that plot more fully and satisfactorily or less.
I mentioned before that you can combine plots, and that’s happening a little in the platform space too. Down London way, a bunch of Johnny-come-lately upstarts called Transact has been working with the Swiss to start offering protection via their platform. Transact isn’t the first to do this. A couple of the lifeco platforms – Aviva and Zurich in particular – have had a bit of a crack at it, and Nucleus led the way a year or so ago. I don’t think anyone will be too upset if I say that the business results in terms of number of lives put on risk doesn’t look like it’ll be making anyone head for that private island in the Bahamas any time soon.
Maybe the Transact and Ageas link will be the exception. I know a lot of work has gone into building it and I hope it does well, as I do for the other platform-based protection offerings. I think the drive and desire to keep the platform motoring beyond the basics of buying stuff and selling it again is a good one. But I can’t help wondering just how far platforms can go in terms of combining the six basic plots of financial services. Seven IM lets you borrow money against your portfolio, as does Raymond James. Both are fine offerings in their own way, but neither is clearing up.
If we combine all six plots in one platform does that one win financial services? And for how long? Does it have to give it back after six months?
When will we be satisfied?
The real question is – when is our appetite for new and shinier ‘stuff’ sated? Going back to an earlier point, there’s little purpose in asking proposition teams. Their jobs depend on ‘innovating’, and if the regulator doesn’t do them a favour by giving them work to do then they have to come up with something, otherwise it’s a poor annual review and the 5K iMac will have to stay on the shelf for a while longer.
Just as an aside, it’s hackneyed to drop the Apple-bomb when writing about innovation, but Cupertino is a great example of just how hard it is to keep making different stuff. Take Apple Pay, one of the fruity firm’s big new innovations. There’s some interest, but both there and here contactless payment is hardly new – in 2013 there were just fewer than 100 million contactless transactions worth £609m. And in London’s transport network we are moving from dedicated NFC (near-field communication) Oyster cards to general contactless payment facilities. We already pay for stuff by holding something we own against a reader. What does it matter if it’s a wallet or a phone? We already borrow money when we need to. What does it matter if it’s through a platform?
We’re on the moving walkway already for April 2015, and nothing will change that. But it would be a sign of intent for the product guys to approach the tweaks they need to make with calm, methodical purpose and not poorly concealed glee.
No-one is writing a new story; we’re just living inside the GYMBOA story a little more fully. We should probably act like it a little more.
Mark Polson is principal of platform and specialist consultancy the lang cat
