“Yes, we are all individuals.” Or are we?

At any given moment, there’s at least one asset management/wealth management campaign running which is all about the critical importance of designing portfolios precisely to suit investors’ individual needs.

At the moment, there are actually two:  the long-running Brewin Dolphin consumer-facing campaign, and the new integrated iShares campaign addressing both investors and intermediaries.  Both insist, in their very different ways, that the key benefit they offer is the opportunity for some extremely bespoke tailoring.

I’ve probably said this before, but of all the propositions frequently deployed in financial services marketing communication this is the one that resonates with me least.

On the downside, all this tailoring sounds horribly expensive – after all, a really good tailor-made suit can cost ten times more than an off-the-peg one.  But where is the upside?  I can see that there are some important things about me, my family, my portfolio and my future plans that an investment manager needs to know.  But I can’t see how knowing these things is likely to result in some highly individual and differentiated portfolio – there simply doesn’t seem to be anything about me or my circumstances which would lead towards anything any different from what you’d do for any other late-50s bloke who’d like to retire one day, doesn’t want to take too much risk but doesn’t really have enough money.

A five-minute fact find might, I suppose, reveal some particular attitudes towards types of investment  I might be a Muslim wanting a Sharia portfolio, or a socially-responsible investor wanting an SRI portfolio (as it happens, I’m neither).  But even if, as Brewin Dolphin propose in their ads, they interrogate me for hours, what would make them likely to propose something so individual and so different to me?  If they put someone similar to me into, I don’t know, Tesco and Vodafone, why would they put me into Sainsbury’s and O2?  And given the enormous extra resource cost and complication of treating me in this individual way,what could possibly be the point?

Some cynics would suggest that at Brewin Dolphin, at least, there is an explanation, even if not a very investor-friendly one:  the Brewin Dolphin brokers stick with the firm very largely because they enjoy having the freedom to make their own individual portfolio design recommendations to their clients, so there is a need for some sort of rationale to explain why clients’ portfolios are so extraordinarily different from each other.

But this explanation doesn’t work at all for iShares, who as far as I can see have complete freedom to adopt any strategy or proposition they choose but have still chosen this one.

At an IFA event yesterday, a straw poll of those present showed that a large majority believed there was no demand for highly personalised portfolios even among the most affluent investors (and, frankly, in any case, how would they know whether they were actually getting them or not?).  Overall, I just don’t see where the encouragement for this unattractive proposition is coming from.

At least this blog isn’t as out of date as most ads

I’ve grumbled before about the almost-complete failure of almost all financial services advertising to connect in any way to topical events, or current issues, or even the rather more general and more slowly changing zeitgeist.  I’ve said that if, for example, you tried to deduce a history of the financial climate from, say, the last ten years’ worth of ads, you’d have no sense at all of the turmoil and drama we’ve all been living through:  the best single proof, although strictly speaking not about advertising, was when my friend Surrey Garland visited all the big banks’ websites at the height of the meltdown in autumn 2008 and searched for the term “credit crunch.”  Every single one of them came back with a Code 404, Credit Crunch Not Found.

You might imagine that this extreme lack of topicality reflects some sort of failure of nerve, or imagination, or insight, or something.  But actually, it’s nothing as interesting as that:  I’m pretty sure that nine times out of ten, it just reflects the terrible plodding bureaucratic slowness of our systems and processes.

Occasionally you see a campaign that seems to confirm this view, and the new advertising for the investment firm Jupiter is a case in point.  I can’t remember exactly what the headlines say, perhaps because they’re expressed in very dull and unmemorable forms of words, but the general sentiment is that even the darkest investment clouds always have some kind of silver lining, that however grim the investment climate, there’s always a few bob to be made somewhere.

Jupiter asked agencies to pitch for their account last autumn, and this advertising will be the work with which the winning agency won, if you see what I mean.  At the time, with the markets still all over the place, it probably seemed pretty sharp and cutting-edge.  But it’s not until four months or so after the pitch that a painfully slow development process has finally started delivering its first visible results.

Trouble is, of course, that it’s been a four-months-or-so in which the world, and specifically the investment markets, have changed very considerably.  The markets have been flying, up a thousand points over the period.  Memories being as short as they are, we’ve all forgotten that dark-clouds era:  what we’re worrying about is making sure that we pile in quickly enough to get some worthwhile benefit from the upturn.  If the Jupiter headlines mean anything in this new climate, which they don’t really, they might be thought to be encouraging us to wait till things go tits up again before we invest, because there will be more bargains to be had then.

I’m sure the people at Jupiter and their agency are aware of this desynchronisation between the markets and their ads, and indeed they’re very probably already working on a new campaign which more or less says:  “Fill Your Boots While The Markets Are Flying.” Only thing is, if it takes another four months or more to get it ready, by the time it starts appearing they probably won’t be.

Sure, I like hearing from the winners. But what about the 599 losers?

I’ve been addressed by an awful lot of sportspeople recently, most of them Olympic medal-winners cashing in on their celebrity with a punishing schedule of presentations at FS sales conferences (the conspicuous exceptions being, inevitably, Wiggo, who has said that he would far rather stay at home listening to Style Council records than take the tainted corporate shilling).

They’re mostly very sweet and quite impressive, and they all tell the same story – pretty much, that it’s determination, perseverance and teamwork that account for their success, and so either explicitly or by implication if we suited ones in the audience display the same qualities then we can enjoy the business equivalent of their gold medals ourselves.  We suited ones look a little teary but a bit more square of jaw on hearing this.

The sportspeople are so unanimous that for a few moments you’re inclined to believe them.  But then you realise the fatal flaw:  all the losers in all the same events were equally determined, persevering and teamy, or D, P and T for short.  (Well, almost all the losers. There may have been a small handful of idle dilettantes who just pitched up, put on a pair of shorts and were upset and mystified when they came in distant lasts.  But the huge majority of Olympic athletes, right through from the gold medal winner to whoever trailed in last in the first heat, were awesomely and indistinguishably D, and P, and T.)

I suppose you could at least argue that D, P and T gets you to the Olympics, which in itself  isn’t a bad outcome – but sadly even that’s not the case.  I remember reading somewhere that at any one time there are something like 600 teenagers slaving away at Nick Bolletieri’s Florida tennis camp, all desperate to make the big time:  of those 600, it’s unusual for even a single one to succeed at the highest level of the tour.

So the real message that these sports stars should be giving us at our corporate events is that even a 110% commitment to D, P and T gives us no more than a one-in-six-hundred chance of major success.  That’s not the message that the sales forces’ management teams want to get across:  it would be depressing and demotivating, which isn’t the intention at all.   But it would have the somewhat academic advantage of being true.

Great news for old farts: apparently, we’re all content-creators now.

Even in a fashion- and trend-based field like financial services marketing, I doubt if any idea has swept tsunami-like across the landscape more quickly than this thing about content and content-based marketing.

At the moment, it is pretty much literally the only game in town – the only thing anyone wants to talk about.  But conversations on the subject are made more difficult by the fact that a lot of people – including, if I’m honest, me – are more than a little unsure what it actually is.

It’s probably more obvious what it isn’t.  What it isn’t, or at least not usually, is advertising.  I suppose some long-copy manifesto-style ads might have enough substance to qualify as Content, but on the whole ads fall on the other side of the dividing  line – not Content, but something else. Maybe Puffery?

The clue, I think, is in that word I just used, substance.  Content has to have some of this. Media articles are Content.    White papers are definitely Content. Research write-ups are Content.  Blogs, if more than a couple of paras, are Content.  This, come to think of it, is Content.

Content is important mainly because it’s seen as the new glue which holds communications programmes together.  Advertising, both online and offline, directs people to content.  Content provides the substance of the website.  The PR effort revolves around content.  Events are mainly content-driven, unless they’re just piss-ups and they’re rather unfashionable these days.  Content is financial marketing Araldite.

A lot of client-side marketing people, and also a lot of agency people, are somewhat anxious about all this. In most cases, this is because either a) they don’t really know enough about anything to be able to write more than a couple of paras about it, or b) they can’t really write more than a couple of paras about anything.  Or both.

Still, for old farts like me, to whom word-bolting comes pretty naturally and our main objection to Twitter is that after 140 characters we haven’t even got started, the new obsession with content is good news indeed.  I must say, I never expected to find myself at the cutting edge of marketing communications at this stage in my career.

“Nationwide search for horsemeat.” Really?

According to the headline in yesterday’s Telegraph, the horsemeat scandal has finally arrived in the world of financial services.  I can’t help thinking it’s odd that Nationwide should have embarked on this search – not many opportunities to hide the stuff in mortgages or savings accounts – but there you are.  It may, perhaps, be the first time that a UK financial institution has been answerable to both FSAs, the Food Standards Agency as well as the one we know and love.

But what about the big banks, that’s what I’m wondering.  Barclays and RBS are strangely silent on the matter.  And surely it can’t be a coincidence that Lloyds’ logo is, indeed … a horse.

I think maybe I’ve been doing this financial thing for too long.

The return of the Mildly Annoyed Brigade

You probably don’t remember the Angry Brigade.  They were a short-lived gang of home-grown left-wing British terrorists who set off a couple of dozen smallish and not-very-harmful bombs in the early seventies, protesting about a bunch of various issues of the time:  I don’t remember much about the issues, but I do remember that they bombed the homes of several Conservative MPs and also a BBC outside broadcast unit covering the Miss World Contest.

I was in my teens at the time and at my most right-on.  I was a subscriber to Tariq Ali’s horrendously boring Trotsykist magazine Red Mole and even made half-hearted attempts for a couple of hours a week to sell copies to commuters entering and leaving Guildford station.  (As I recall, I never sold a single copy but occasionally binned a handful and paid up the alleged proceeds from my pocket money.)  As such, whatever it was that the Angry Brigade were so angry about, I agreed with them.

But as I mentioned in passing in my last blog, I found it quite impossible to match their level of anger.  In fact, according to Wikipedia, the Angry Brigade consisted more or less entirely of a single Scottish petty criminal called Jake Prescott, who it seems was more or less pathologically angry and could be provoked into a bomb-planting rage by almost any even remotely right-wing behaviour:  Being A Conservative was more than enough to start him off.

But I didn’t know that at the time, and I used to joke somewhat uneasily with schoolfriends that we should start an equivalent but less intense version for middle-class Surrey teenagers, called the Mildly Annoyed Brigade and confining our activities to leaving banana skins on the pavements outside right-wingers’ houses and sneaking whoopee cushions onto their benches in the Commons.

I suppose that kind of attitude came from a combination of two things – a degree of comfort that no matter how horrible the Tories, or the bankers, or the arms dealers, or whoever it is, may be, the effects aren’t going to be too devastating for middle class kids with Oxford educations;  and a naturally empathetic and indeed sympathetic turn of mind that tends to think that there are very few people (or organisations) who are truly, madly, deeply villainous, and that most of most people’s behaviour can be explained with Mandy Rice-Davies’s to-know-all-is-to-forgive-all “He would say that, wouldn’t he?”

(In fact, if I look back over 40 years with a degree of honesty I couldn’t have allowed myself at the time, I’m sure I’d have felt a lot more distant from, and out of sympathy with, petty Scottish criminal Jake Prescott than the pompous old Tories whose garden sheds he bombed.)

Not for the first time in recent blogs, that’s a lengthy ramble before coming eventually to a point relevant to my world of financial brands and communications.  I don’t think I’m being naive when I say that in all my long career I don’t think I’ve ever met anyone really wicked, or worthy of the kind of anger that Jake expressed with his explosions and a lot of people express towards financial institutions these days with real fury and contempt.  But I’ve met a lot of people in the financial world – just as I have in other worlds – who will get away with as much as they think they can get away with.  And in my view, the best way to deal with them is a combination of strong (but sensible) regulation, and a permanently high and watchful level of scepticism and distrust.

Would what worked at Yale in ’61 have worked in Haight-Ashbury in ’67?

I’ve been thinking about very little except Stanley Milgram and his famous experiment since writing that previous blog earlier this morning, and in particular I’ve been thinking how perfect it was that an experiment so vividly demonstrating the consequences of too much conformism and respect for authority should have been carried out at Yale in 1961 and 62.

Given that it was an American experiment, it could only possibly have been undertaken on the East Coast – there ‘s nothing remotely West Coast about it.  And given that it’s all about respect for authority, it could only possibly have been undertaken before the counter-culture revolution of the mid-sixties – indeed, in some sort of intangible way, it feels now like a necessary curtain-raiser for the counter-culture, a sort of justification-before-the-event for treating The Man and his requirements of us with a great deal less deference than hitherto.

I suppose I see myself as a bit of a child of the counterculture, even if in truth I was only ever a weekend hippy and even if my attitude towards The Man, while as sceptical and challenging as anyone’s, was coloured with too much goodwill and amiablity to mark me out as a potential supporter of the Angry Brigade.

But anyway.  Even forty years later, the question that even part-time members of the counter-culture can’t help asking themselves is:  “Why does that man in the white coat/army uniform/pinstripe suit/with a stethoscope round his neck/pointing towards that building marked “Showers” want us to do whatever it is he wants us to do?”  And I think that if the participants in Milgram’s experiment had asked themselves the same question, they’d quickly have realised there was something odd about the whole set-up, and hopefully showed a bit more spirit and a bit more humanity in their behaviour.

The propensity to ask why requires, obviously, a challenging and distrustful attitude.  And I suppose that’s why, in 99% of the situations we find ourselves in, distrust strikes me as one of the healthiest and most valuable of all emotions.

After the Kings Cross Underground fire in the late 80s, when 40-odd people were killed in a massive ball of fire in the station booking hall, it turned out that many of the people in precisely the wrong place at precisely the wrong time had been led there by London Underground staff.  Given instructions to evacuate the station, they had taken people from the platforms up the bank of so-far-unaffected escalators into the booking hall.  They arrived just at the moment when the fire, consuming the other bank of escalators, flashed over into a fireball which devastated the booking hall in moments.

If those people had either stayed on the platforms, or, even better, followed the signs through the corridors to the adjacent and completely-unaffected Metropolitan and Circle Line station, no harm would have come to them.  I like to think that if I’d been on a platform and a member of LT staff had started shepherding me towards the smoke, I’d have had the sense to realise that this was not my best course of action.  But then again, I like to think I’d have opted out of Milgram’s experiment at a decently early stage too.

This blog’s loyal reader will have spotted the connection with one of my fave financial services themes, namely trust and the absence or presence thereof.  The industry’s forever wanting to restore it.  I am completely out of sympathy with this.  To be honest, as a child of the counter-culture, I have a strong suspicion that many in the industry only want it back so that they can abuse it again.  After all, if you don’t intend to abuse it, why do you care about it so much?  If you’re sure that what you have to offer stacks up even when interrogated by the most suspicious and cynical individuals, why are you so keen that they should lower their defences before the interrogation begins?  And if you’re not sure it will stack up in that situation, what the hell are you doing offering it?

I don’t know what would happen if Stanley Milgram’s experiment was repeated in this country or elsewhere in the developed world today.  The experience of Stafford Hospital tells me that sadly, despite everything that has happened in the 50 years since the original, there are still far too many people willing – even if against their better judgement – to administer that 450-volt shock, especially if they’re in a situation where their jobs are on the line.  My solution to that is to try harder than ever to encourage distrust, challenge and scepticism.  But in saying that, I do feel remarkably out of step with the industry I work in.


Stafford Hospital, LIBOR fixing, horsemeat hamburgers: Stanley Milgram saw them all coming.

Among depressing demonstrations of the realities of human nature, few if any beat the legendary experiment carried out by psychologist Stanley Milgram at Yale in the early 60s.

I’m sure you know it, but here’s a reminder in case you don’t.  Milgram recruited 100 volunteers allegedly to help him with an experiment.  He told them that they were to help him test a theory that people learn better if they are given painful electric shocks when they make mistakes.  To this end, each volunteer sat at a control panel at which they could see the supposed “subject” of the experiment through a one-way mirror.  Milgram, wearing a white coat, stood next to the volunteers and used a microphone to read out the material that the “subject” was supposed to learn.  When the subject repeated this material wrongly, the volunteer was told to press a button giving him an electric shock.   Each time the subject gave a wrong answer the volunteer was to increase the strength of the shock:  the dial used for this purpose was marked with danger warnings, and of course as the strength of the shocks seemed to increase, the subject displayed more and more pain and distress.  If the volunteers were reluctant to increase the strength of the shocks Milgram would use some brief and non-emotive words to encourage them to continue, but they were free to stop at any time.

Of course the real point of the experiment was to find out how many of the volunteers were willing to administer what they believed were lethal 450 volt electric shocks.  And, cutting to the chase, the answer was 65%.

The point of the experiment, of course, is all about our sheep-like obedience to the man in the white coat.  Left on our own in the same situation, with some written instructions, it’s difficult to believe that 6.5% of volunteers would deliver the lethal shock.  But all it takes is for someone authoritative to say it’s OK, and it seems that there is no limit to the evil we will do.

(By the way, in a secondary finding that’s much less well-known though not much less depressing, Milgram also reported that among the 35% who refused to continue, not a single one made any attempt to check the condition of the subject, or made any complaint about the nature of the experiment.)

These days, we talk mostly about “corporate culture.”  We explain what has happened by saying that the culture at Stafford Hospital, or among the LIBOR team at Barclays and RBS, or at that burger factory in Ireland, was all wrong.  I suppose that’s a reasonably sensible way of diagnosing it.  But really, the problem in each case was that the men in the white coats were using their authority to utterly misguided, despicable and appalling ends.  And since I, most of my friends and, I suspect, most of this blog’s readers could be counted as men (or equally of course women) in white coats, it doesn’t do us any harm to remember from time to time just how much power we have over the behaviour of others, and what will happen when we abuse it.