As Litha, the Summer Solstice, arrives, and we light balefires and make protective amulets that we can photograph and put on Instagram, I find myself contemplating the mix of old and new in our industry.
We are always being told that the way people transact different goods and services is changing. Cash is dying in favour of pay-by-bonk with your card, phone or watch.
New web ecommerce services, which remove all trace of human contact, are decimating sad old meatspace offerings.
High streets resemble an Old West-style tumbleweed strewn… actually, hang on. The US Census Bureau puts the percentage of consumer spending conducted via e-commerce at 7.8 per cent of the total at end of the first quarter of 2016. It is growing fast, but bricks-and-mortar still has a place for many years to come.
You may have attended seminars with titles as: ‘Are you ready for the Uberisation of financial services?’ or ‘What will be financial services’ Uber moment?’ and “Why does no one come to my seminars any more?’
The truth is, in our industry, there is already no shortage of ways for people to save and invest online – and this has been the case for years. Yet, in Q1 2016, we saw one of the worst retail investment quarters in recent memory. Why?
The answer, I suspect, is not Brexit fears, or stock market wobbles, or concerns about rising interest rates. It is simply that the value pool of self-directed investors is tapped out. If you are interested in investment you have never had it so good.
But if you are not, you are no further forward. You’ve got plenty of websites that want to educate you on investment – a subject in which you have already proved you have no interest – and a new cohort of services which make a presumption that what you really want is to be advised by a nice person in a suit, but that you can’t afford one, so you are happy for a nice computer to do the same thing.
This is heroic in its ambition, but reality just does not bear it out. The truth seems to be that savers and investors are incredibly fickle. It is true that, all bar the most motivated investors seem to want some recourse to real human beings at some point in the process, but it is not clear at what part that is.
It is far from certain, for example, that individuals need an adviser or a client service representative to get them across the line in transacting.
Many people find transacting finance deeply personal and embarrassing, but might like some information and guidance in the abstract before they personalise it to their own situation and pull the trigger themselves.
This is behind the cyborg propositions we see doing well in the US, in particular Vanguard and Charles Schwab. It is the marrying of tech space and meatspace that seems to unlock the asset flow. Firms like EQ Investors and others over here are also looking to tap that trend, and even Nutmeg is thinking about getting advice permissions.