Mark Polson: Client portals are more important than you think

Mark Polson: Client portals are more important than you think

It’s summer, and your minds are elsewhere. So rather than getting into any tricky terrain, let’s take a little moment to think of the softer side of life.

I was doing a fun project the other day, which had to do with designing a robo-type mobile app prototype for a life company in one of our European neighbours. (I like to do as many of these as I can before it becomes insufferably difficult to sell our services into Europe; thanks Brexiteers.)

During that process I spent some time roughing out a welcome screen for investors that showed seven things:

Article continues after advert
  • Client details;
  • When you started investing with the service;
  • Your goal, and your progress towards it, colour-coded for if you’re on track or not;
  • How much you’d paid in;
  • How much you’d taken out;
  • Investment returns (in euros and percentages);
  • Fees (in euros).

One of the use cases for this small proof of concept is for the provider to develop a white label service for advisers to use at a low cost – sort of like the Parmenion robo service here, except with no actual advice.

I mention this because I showed my shiny prototype (stop sniggering at the back) to a couple of advisers and we got into quite a heated discussion about what a client should be able to see and what they shouldn’t.

And that’s our subject for this month – how much information is too much?

It’s a timely question to ask. We’re now in the world of Mifid II quarterly statements, and the first round of ex-post disclosure will be on us before you can say ‘encore un pression, s’il vous plait’. 

Investors will be exposed to a terrific amount of information, which of course many – maybe most – will be ill-equipped to deal with. (Smart advisers will help with this, as it’s better for you to do it than, say, the Daily Mail.)

A recent study by the Lang Cat found that relatively few advisers were promoting client portals to their clients. We asked the reasons why, and broadly speaking the responses fell into three buckets:

1. Not convinced the data is accurate enough to expose it to clients;

2. Clients shouldn’t be looking at their investments regularly;

3. Don’t want to stop asking me questions, la la la I’m not listening.

Bucket three happens more often than you’d think. But in this sunny, relaxed time of reflection I’d like to dwell on bucket two. 

Now we all know the adviser alpha type story, that you make your clients behave rationally when it comes to finances. You stop them buying at the top and selling at the bottom. You keep them saving towards their goal, stop them fiddling about with asset allocations based on whatever they’ve read in the paper that weekend, and so on. And that’s all true, probably, and valuable, most likely.

But most portals don’t let clients do anything of the sort. Those that are provided by back-office providers definitely don’t. And even those platform-provided ones that do normally limit stuff to ‘read only’.