The 63,999,997 colours that asset management firms don’t like

My computer claims to be able to reproduce 64 million colours, but most seem to be of little interest to asset managers.

Looking at the logos of all the display advertisers in this week’s Wealth Manager, I find:

Henderson:  dark blue

Artemis:  dark blue

Neptune:  dark blue

Schroders:  white out of dark blue

Invesco Perpetual:  white out of dark blue

Investec:  dark blue

Fidelity:  white out of dark blue

Baillie Gifford:  dark blue (actually, it’s so dark that it could be black)

Legal & General Investments:  white out of mid blue

There are then two exceptions – M&G, whose logo is dark and mid green, and Smith & Williamson, whose logo is white out of red.

But even so, that still seems to leave those 63,999,997 colours unaccounted for.   Anyone have any idea why?

“Our most important emotional benefit is peace of mind.” Yeah, right.

I was in a panic yesterday.  And panic being infectious, I went round spreading it among my close family too.

The reason was simple.  I’d received a statement that seemed to show that my pension savings had fallen by rather more than £200,000 over the last year.  And being more than somewhat on the under-funded side anyway, that was two hundred grand that I very much couldn’t afford to lose.

“You’re on your own,” I told my uni-student kids. “That help you were counting on when it comes to flat-buying – forget it.”

“You know that big birthday you have on the horizon?” I asked my wife.  “How do you feel about an M&S cake and a bottle of prosecco?”

They all looked suitably miserable.

To be honest, I’m not actually sure where the statement had come from.  The cover carried the branding of my financial adviser, but in smaller print it also carried the branding of the platform I know he uses.  It may be that it came straight from the platform, where it was overprinted with the adviser’s logo.

Anyway, it was a remarkably confusing and unhelpful document – about 12 pages of tabulations, with no narrative of any kind, showing the value and contents of my fund sliced and diced in as many ways as you could shake a stick at.  By fund, by asset class, by geographical sector, by yield, by change in value since acquired, by whatever you like:  but down at the bottom right corner of every page was the same total figure, about £200,000 less than last year’s.

(Actually, to check this I had to rummage about in a box file to find last year’s – amidst the sea of figures, there was nothing as useful as a year-on-year comparison.)

I emailed my adviser to find out what the hell was going on, but got an out-of-office.  My panic intensified.

Then, several hours later, I remembered something important.  Just about this time last year, we’d taken a chunk of money off the platform and invested it in something else.  It didn’t account for the full shortfall, but it made me feel a bit better.  And then this morning my adviser has replied to me, pointing this out and also pointing out that for some inexplicable reason the platform statement doesn’t show some money being held on the platform in cash.  Panic over.  It hasn’t been a great year.  But it hasn’t been a disaster either.  It was just a terrible, confusing and unreliable statement – a document that should never have been sent out to clients.

This blog is now going to feature a bit of a disconnect, because I’ve never actually done a brand definition exercise with this particular advice firm.  But if I did, I’m 95% sure I know what would come top of the list of Desired Emotional Benefits:  peace of mind.  It always does.  I’ve never known it not to.  Peace of mind is fundamentally what advisers think they offer.

They so don’t.  They don’t in micro ways, like in the story I’m telling here.  And at the same time, they don’t and indeed can’t in macro ways too.  Even if I just think about my and my family’s long-term financial security, on the grounds that this is the only bit of peace of mind that they can realistically help me with, I can think of at least three peace-of-mind-busting issues that they can do nothing at all about:  the fact that there’s about half as much money in my pension fund as there ought to be, the unlikelihood of, say, a  five year period of smooth and significant stock market growth;  and my continuing but entirely unpredictable need for clients to give me nice profitable work to do.

Hardly any advisers can see this.  And as a result, whenever I hear one say that the most important thing he gives his clients is peace of mind (and that’s pretty much always), I conclude that his powers of empathy and insight are a good deal weaker than he thinks they are.

Which is a slight problem too.  Empathy and insight are usually right up at the top of advisers’ self-declared list of personality attributes.

And my Chairman’s Special Advertising Award goes to…the judges, actually

My annual gig chairing the Money Marketing Financial Advertising Awards the other day, and despite a near-disaster early doors when the bacon sandwich delivery van crashed en route (the admirable Centaur Events team leapt into action and found back-up supplies) a thoroughly good and enjoyable day as usual.

Actually in one important way better than usual, because I did think that the standard of entries was extremely high and a couple of the category winners really exceptional.  But on this occasion I want to recognise not so much the standard of the work, but more the standard of the panel of fourteen-or-so judges.

Each year we cunningly invite them to take part months in advance, usually way back in August, when their diaries for January the following year are still as unsullied and white as freshly fallen January snow.  As a result, they nearly all say yes, even though in fact when it comes to it the second half of Jan is usually a really busy time and they all wish they hadn’t.  There are always a couple of last-minute drop-outs, but nearly all last the distance.

And I must say that those who do, without exception, put in a full day’s hard work.  At risk of disappointing those hoping for tales of horse-trading and back-scratching, it’s a long day of serious thought and intelligent debate – and, in the end, a final list of winners which, while not always unanimous, has the support of the very large majority of those present.

(Given the diversity of the judges, by the way – agency people, client-side marketers, practising IFAs, a couple of journalists – the level of agreement is in itself an interesting phenomenon.  As I say most years, people may disagree about mediocrity but they usually agree about excellence.)

Anyway, last Friday, I didn’t see anyone switch off and let anything through on the nod – on the contrary,  even in the less-important morning session, in which the shortlists are drawn up, the intensity of concentration and volume of discussion meant that proceedings over-ran by over 50% of the allotted time even while lunch gently cooled in the room next door.

Of course those judges with proper jobs still get paid for the day, but not so the several who work for themselves.  And if anyone suspects a degree of self-interest in the opportunity for some – especially those on the agency side – to plug their own work, then I must stand on my dignity to emphasise that the no-marking-your-own-homework rule is 100% strictly maintained.

Anyway.  I’d better not get carried away.  A day spent looking at ads doesn’t exactly represent self-sacrifice on a Mother Theresa-esque scale.  But still, it’s a good, serious and responsible effort from a bunch of people who have plenty of other demands on their time.

Sorry, I know this is a bit like drowning kittens

A friend who’s a partner in a very good little brand development business has a party piece which he performs as an after-dinner speech in financial services gatherings.  He chooses – more or less at random – a page of copy from a financial website, brochure or whatever, and rips its grammar, punctuation and use of language to shreds.  By the time he’s finished, scarcely a word has resisted his withering scrutiny.

You may say that this confirms your worst fears of what goes on at financial services dinners, but I react a bit differently – to me it does seem a bit like drowning kittens, or shooting fish in a barrel, or any other cliche about annihilating weak opposition.

My friend is a hell of a writer, and actually also a hell of a critic.  The copy he’s picking on will have been written by a badly-briefed, terminally bored freelancer on £200 a day, rushing to crash through 30 pages before picking the kids up from school:  and what wasn’t very good to start with is a whole lot worse by the time a semi-literate marketing manager and a stylistically-indifferent compliance department have had their way with it.  In the circumstances, it would be a whole lot more surprising if my friend couldn’t slaughter 98% of it.

But having said that…

I must admit, I heard mewing from a bag left by the edge of the river this morning, and on closer examination it turned out to contain two cute little critters called Terms and Conditions.  We take this phrase completely for granted.  Regulators insist we stick it on virtually everything.  If our copy contains any kind of offer, you can be sure that somewhere down in the mouse-shit, you’ll find the words “Terms & Conditions Apply.”   Somewhere in the pack, there’ll probably be a flimsy and dull-looking leaflet with these words on the cover.

But why?  My first question – as I kick the mewing bag towards the fast-flowing water – is what useful purpose these words could possibly serve.  In this respect, they’re just like another of the flyshit phrases, “subject to availability.”  Could anyone in their right mind think that they could benefit from the offer when the product in question wasn’t available?  Or that the advertiser is guaranteeing that the product will be unconditionally, unrestrictedly available no matter how many millions of buyers might decide they wanted one?

But actually, this isn’t really the point that brings the kittens to the brink.  My real beef is the misjudged and counterproductive pedantry reflected in the bringing together of the two words.  Not just “terms.”  Not just “conditions.”  But – always – “Terms and Conditions.”  Why?  What are the separate and equally-important meanings intended by the use of both of these words?

Well, that’s a tricky question,  The fact is, both these words have an unusually large number of quite separate meanings.  Terms?  Terms how?  University terms?  Terms meaning “words or phrases describing a concept or thing”?   Terms meaning “fixed or limited periods of time”, as in “terms of office”?  Or any of the other 15-or-so definitions that the Oxford Online Dictionary provides?

“Conditions” isn’t quite as bad, but it can mean illnesses (“suffering from a serious condition”) or social positions, or “state of something with regard to its appearance or quality,” among seven or eight other options.

It would be nice to think that out of the total range of some 23 different meanings for these two words, all readers will jump immediately to the right ones.  But, given the struggles that millions of people have with the English language these days, I think we can safely say that many will not.   Some must wonder why, along with the details of the financial product that interests them, there’s a dull-looking leaflet with a heading that means “Periods of the School Year and Illnesses.”

As I say, misjudged and counterproductive:  a pedantic and unnecessary attempt to define the restrictions affecting an offer results in the ubiquitous appearance of a pettifogging phrase which means nothing at best, and mystifies at worst.

That’s it.  Now, will someone please jump in and grab that bag before it sinks?

“No, no, you go ahead and do that brain operation however you like.”

As we hold them up to scrutiny, more and more of the practices that we in financial services have followed since time immemorial start looking very peculiar.

One such is the way that private client stockbroking firms have typically left individual brokers free to design and manage their own clients’ portfolios.  These days, this has become so obviously a terrible idea that the few firms still defending it strike an extremely troubling note.

There’s a Redmayne Bentley ad in today’s Wealth Manager, for example, with the headline Is Bespoke Investment Management the future or the past?, and then a long sub-head which reads Are you an investment manager looking to break free from the constraints of ‘house models’, in-house buy lists and in-house funds?

It’s kind of amusing to imagine rewriting that sub-head in the language of other occupations and professions, and then envisaging how the rewritten version would go down with customers.  How about:  Are you a mechanic looking to break free from the constraints of Mercedes-Benz workshop procedures, Mercedes-approved suppliers and genuine Mercedes parts?  I think that on the whole those “constraints” are what attract customers to that workshop, and their absence would be much more bad news than good, don’t you?

Or, of course, the example in my headline.  Are you a brain surgeon looking to break free from the constraints of a hospital’s defined surgical procedures, selected suppliers and in-house resources?  If so, mate, there’s no way you’re drilling into this punter’s cranium.

Redmayne Bentley tell us that they have 40 offices across the country.  Presumably there are several of these constraint-escaping brokers in each of them.  I may be missing something, but I can’t think of a single multi-site business in any other industry which would be proud to announce that there are no “constraints” on the service and advice given either between or even within individual offices.

And the more demanding the expertise required, and the less we’re ready to believe that any single person could master it all single-handed, the more uncomfortable this freedom from “constraints” tends to sound.  We might not be too anxious to hear of a national shoe-cleaning business where each shoe-cleaner adopts his or her own particular approach and chooses his or her own combination of brushes, cloths and polishes.  But I really don’t fancy flying on a constraint-free airline where all the pilots fly their planes in whatever way they think best.

Of course I understand what’s really going on here.  The era in which individual brokers, flying solo, could run their own micro-businesses and choose their own level of remuneration is, thankfully, now rapidly coming to an end.  Most of Redmayne Bentley’s competitors are moving quickly to much more consistent, centrally-driven, properly-researched and managed models offering far less scope for the old-style gin-and-tonic brigade to carry on winging it.  And that being so, Redmayne Bentley is making a pitch in this ad to the surviving old-timers, with the message that over here it’s business as usual for the time being at least, and please would they like to come across and bring their nic e valuable clients with them.

And in fact, if you go to the Redmayne Bentley website, you’ll find that all this is pretty disingenuous.  The reality is that three of the four services described on the home page are centrally controlled and managed, and I wouldn’t be at all surprised if it’s all four within a year or two.

As I say, these days, the idea of the “constraint-free” investment manager, running a couple of hundred clients’ portfolios from a major investment centre like Beverley, Helensburgh or Shrewsbury (all sites of Redmayne Bentley offices) is peculiar and frightening in roughly equal measure.  Now that we’re all thinking about it – and especially now that the regulator is thinking about it – it’s an idea that’s disappearing at great speed.  Funny that it took us so long to get round to it, though.

After all, they didn’t become national stereotypes for nothing

I was talking to a friend who runs a large, non-British asset management company – for the purposes of this blog let’s say it’s French, although it isn’t.  She was quizzing me about perceptions of her firm’s brand in the UK retail market, where they aren’t well known.  I said that in the absence of anything more specific, we (or at least I) default to the national stereotype:  I naturally assume that as a French firm, it’ll be intense, arsy, unreliable and deeply xenophobic.  (Also, maybe the staff wear Breton sweaters and strings of onions round their necks.)  (No, not really.)

She was astonished.  “My business isn’t French like that at all!” she said.  “On my management board there are two Brits, an American, a Swede, a Japanese and someone I think might originally be Thai.  Nine-tenths of our funds under management come from outside France and are invested outside France.  Our business language is English.  And I never, ever wear my Breton sweater to the office.”

“I don’t care,” I said.  “Big institutional clients who know you well at a personal level may understand all of that.  But to me as a retail punter, I see a French name and my head fills with French stereotypes.  You can work on changing them, if you want, but it’s foolish to ignore or deny them.”

To be honest, I was surprised she was surprised.  In many, if not most, international markets, perceived country of origin says loads of things about individual brands. The right provenance is hugely positive:  Scotch whisky, German cars, French cheese.  The wrong provenance is intriguing at best and massively unhelpful at worst:  French whisky, Scottish cars, German cheese.

Of course early on, before the implications of national origin have set in stone, there’ll often be a range of options available.  I summarised my perceptions of the French a few paragraphs back as “stylish, intense, arsy, unreliable and deeply xenophobic.”   Most, although not all, of these could provide a basis for a fairly interesting investment brand (even arsiness, if we’re looking to take a contrarian stance), but a couple of them less so (difficult to see much advantage in perceived unreliablity).

And then of course there are other facets of Frenchness which may not make my top five, but are certainly there in my mind and available for emphasis and development.  The French have a far stronger and prouder intellectual tradition than us Brits, for example – reflected, I always think, in those dour Gallimard paperbacks which come in the plain white covers and are bound in such a way that you have to cut open the edges of most of the pages before you can read them.  How about an investment brand which reflects that kind of Gallic asceticism?

But the key point is that although there are plenty of brand positioning options available, if they’re going to work then they’re going to have to go with the grain of the stereotypes that are already in our minds.  If brand-builders try to ignore or deny them, the results will be comical and entirely counterproductive – as when Air France, for example, launched a campaign about the warmth and tenderness of their in-flight service.  Absolutely ridiculous.  The French have no concept of warm service.  Tell me that Air France offers the best wines, or the chicest uniforms, or even the flight crew most likely to have read Sartre, and I’ll believe you.  Tell me that they care, and – not least as a Brit – all I will experience is what I think is known in the trade as extreme cognitive dissonance.

I could go on, but I’m aware that I’m treading a fine line between interesting brand development theory and barely-concealed xenophobia – a criticism which, of course, I made of the French a few minutes ago.

So I’ll leave it there – and end simply by saying that if those responsible for brand-building in asset management (and actually in many other parts of financial services) are looking for that certain something extra, they may just find that a soupcon of country-of- origin will provide that all-important je ne sais quoi.




Excuse me, but why doesn’t anyone around here ever have any money?

Financial technology guru Ian McKenna’s first blog of the New Year comments on the trend:  .(And another online advice proposition launches. Will 2014 be the year #digitaladvice becomes mainstream? FTAdviser

He’s not wrong. Online D2C investment services, whether execution only or (somewhat implausibly, in my book) advisory, are springing up all over the place at the moment.

I don’t particularly like Money Guidance, the one that Ian is drawing attention to here, for four main reasons.  Partly I don’t really believe in online advice at £60 an hour, partly I think calling the service Monday Guidance is a potentially-misleading attempt to get a bit of free halo effect from the service originally proposed by Otto Thoresen under this name but now in fact called Money Advice, and partly I don’t like the fact that when this service was first launched in its 1.0 version there was a bit of a kerfuffle when it turned out that the founders had chosen to offer consumers free access to planning tools from FinaMetrica and Voyant without, er, quite getting round to telling them about it or coming to an agreement with them

But actually, even though all these reservations are pretty big, there’s an even bigger reservation that looms over them like a great big looming thing.  Clearly, this is yet another D2C financial advice/planning/execution business that’s launching without any bloody money.

I should think that in the last couple of years we’ve seen a good two dozen broadly similar and similarly cash-strapped new ventures lay out their digital stalls.  Some have been developed by large well-established companies, like Royal London’s MoneyVista and Charles Stanley Direct;  others by younger and more digitally-oriented organisations like Trustnet Direct and Money On Toast;  others by enthusiastic individuals like Nutmeg, rPlan and Candid Money;  and quite a few, like Money Guidance, by IFAs keen to find a lower-cost alternative to full advice.

What do all these businesses have in common?  I’d say at least three things:  more or less zero consumer awareness, very few active and paying customers, and virtually non-existent marketing budgets.  (Yes, yes, I know that a couple of them have coughed up twopence-halfpenny, but my point still stands.)

I know I’ve commented on this before, but the longer this situation continues – and the more this hopelessly cash-strapped sector expands – the odder it seems.  OK, one or two of the newly-launched organisations do have hugely attractive prospect pools available at very low cost – Trustnet Direct, for example, are able to access the several hundred thousand highly-engaged private investors who are already Trustnet customers.  But the large majority don’t, and for them it’s difficult to envisage anything but a slow and depressing death by starvation.

As I say, it’s probably not unusual in developing new markets for a few brave pioneers to strike out across the desert with nothing much by way of resources except a hip flask and a positive attitude.  But once the first sun-bleached skeletons are starting to turn up less than half-way across, you’d expect those following on to be stocking up nervously on food supplies and water barrels – either that, or indefinitely postponing their departures.

Here, neither seems to be the case.  The cash-strapped pioneers continue to wade out into the soft sand.  The sun continues to beat down.  The prospects, in 90% of cases, never actually get as far as rejecting the services on offer – completely unaware of them, they have no view one way or the other.

It’s all very odd.  And meanwhile, the only explorers who have succeeded in finding the largest, most verdant oasis in the desert – Hargreaves Lansdown, who set off some thirty years ago on a well-resourced and planned journey that achieved the huge success it deserved, must be looking on in mild amazement.  Although I’ve often said that the detail of the HL success story is unique to them and cannot be adopted as a template for others, the same is not true of their big-picture business planning, from which simple and obvious lessons can certainly be learned.

Of which the most simple and most obvious is surely that you’re never going to get across that big scary desert with that silly little hipflask of water.