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Is following the herd really the best approach?

There’s been a lot of talk recently about banks and fund groups preparing an assault on the UK platform market. This is something that we’ve seen coming for a while and we know banks and fund groups are certainly thinking about this at the moment.

Unfortunately there’s a real herd mentality when it comes to banks and fund groups, which makes me think that this ‘assault’ might be quite disappointing for all concerned. I suspect most that are thinking about launching a direct-to-consumer (D2C) investment platform will be looking to play it very safe. By this I mean they’ll probably start by talking to an established technology provider and then they’ll end up shoehorning in a slightly simplified version of an existing B2B platform. If it ain’t broke why fix it?

When it comes to the D2C platform space I actually think it’s broken, with a few notable exceptions of course. Obviously the likes of Hargreaves Lansdown and Fidelity are doing a great job because the numbers speak for themselves and I’m also a big fan of RPlan and Nutmeg, who have made a real effort to educate and engage investors in a different way. For the most part though, the other D2C investment platforms that have entered the market have been a bit bland, boring and generally quite indistinguishable.

I think it would be fantastic if at least one bank and fund group were brave enough to really think outside the box and re-write the rule book. In our experience customers want simplicity, they want a great user experience, they want to make informed financial decisions, they want to access services whenever and however they want, and finally, they want all this at a sensible price.

The bland D2C investment platforms have tended to build their propositions around the status quo, which means they operate in a similar way to the current B2B platforms. For that reason I think they’ll fail to capture the interest of investors and therefore will not hit the ambitious market share targets they promised shareholders.

A successful new entrant will be one that’s brave enough to think differently, by building a proposition is 100% focused on meeting the needs of customers.  This will be insanely simple, it will be intuitive and effortless to use, it will educate and mentor investors and it will be available across web, mobile and touch-enabled devices. All we need is a fund group or bank that’s prepared to break from the herd and lead the revolution!


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