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Advice twice as nice: building financial experiences

Despite the global trends demanding that individuals take greater action to manage their personal finances, a huge number of retail customers fail to either seek or use professional financial advice. In the UK, a recent survey by Yorkshire Building Society found that more than one in four savers are finding it difficult to access or afford financial advice. In the wake of the implementation of the Retail Distribution Review (RDR) in the UK, most high street banks, and many financial advisers, withdrew from providing advice to the retail (mass market and mass affluent) customer base, creating the so-called ‘advice gap’, estimated to affect around 5.5 million customers. 

Meanwhile, post-financial crisis consumers are offered a complex range of thousands of financial products and services.  Mix regulatory changes with product complexity, overlay consumer distrust of traditional service providers and there is an obvious need for transformation. 

Customers are increasingly shunning professional advice in favour of a personal blend of information taken largely from digital sources. Where once ‘experts’ advised us on all manner of consumption (from investments through to which books to read or which cars to drive), today’s consumers increasingly rely on the ‘wisdom of crowds’. Amazon, TripAdvisor and even the NHS integrate individual and professional reviews and ratings which are now trusted and employed by far more than those who read the ‘expert advice’ of the Which? reports. 

As information becomes ubiquitous, insight becomes a commodity in the value exchange, with social media as one of the key tools for connection.  Consumers are sourcing information from a community that (they believe) has their best interests at heart, as opposed to banks, which have the benefit of shareholders as their intent. A LinkedIn study showed 44% of mass affluent customers using social media to engage with financial services, with 87% of this segment using social media to engage in professional and personal conversations. A WSL Strategic Retail Survey revealed that 69% of shoppers say they first go to their close friends and family for advice regarding their purchase decisions. To truly replicate real-time experiences, the design of financial advice needs to maximize sharing and storing of information across contexts with friends, family and professionals. 

Furthermore, the volatile advice space of personal and professional, digital and face-to-face requires more sophisticated services. While the early e-commerce technology enabled rapid product location at best price for customers who knew what they were looking for, it is no longer sufficient for the more complex needs of today’s consumers.  The digital advice space is evolving, as evidenced by innovative personal finance and investment companies such as LearnVest and Nutmeg, who offer customers control, reassurance and achievable goals as part of a fun, empowering experience. 

A recent Corporate Executive Board study of over 7000 customers internationally identified a ‘decision simplicity index’ as key to building brand trust. The modern advice landscape provides customers with clear pathways to decision making (e.g. Meniga’s To Buy or Not to  Buy tool), easy advice sharing and comparison, and engagement that replicates their real life behaviour. 

The challenges for financial institutions are how to:

  • Create simple structures to frame complex advice
  • Use digital services to optimise information delivery
  • Integrate multiple streams of information in ways that signal to users where to look
  • Create collaborative environments online 

Banks need to use design-thinking skills to not just deliver key information but to evoke financial experiences.  Financial advice needs to be designed as a service not a product.  In a world where online and offline are increasingly blurred, the new advice is about making the intangible tangible.   It dials up curiosity and enthusiasm to trigger participation.  It supports collaborative alliances that seamlessly span channels.  It makes it easy and enjoyable for customers and advisors to find relevant information and tailor personalized products.









Comments: (1)

A Finextra member
A Finextra member 31 March, 2014, 17:37Be the first to give this comment the thumbs up 0 likes


Excellent blog. The Banking Industry apperared to be obsessed with the UHNWI and HNWI and they forget that e.g. there is 1 Billion individuals who currently count with 10k to 100K investable assets. This cohort of indivoduals will generate the next generation of UHNWI: and they will be a totally different one.. using Social Media to find advise.. social benchmark..  partnerships.. and extremely low cost for Financial Professional Services.

The luxurious, nice carpeted, waiting rooms in the banks will be deserted.. or visited by some geriatric UHNW..  coming to sign a will!


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