Big but sadly implausible idea

Recently in the financial marketing communications world, there have been a couple of those horrendous procurement-driven RFP questionnaires doing the rounds.

The worst was dozens of pages long, and demanded levels of detail on the workings of agencies taking part that most had never even imagined, let alone answered.  (I think it’s true that one of them requested an account of firms’ policy-creation policy, although I might have made that bit up.)

Anyway, the point is that while some of the questions are looking for answers that will genuinely help, at least to some small extent, to judge the suitability of those responding for the task at hand, the large majority are just about risk management.  The questions asking for details of all those policies – policy on disability, policy on diversity, policy on maternity and paternity, policy on health and safety, policy on employee representation, policy on creating policies – are all about ensuring that the organisation issuing the questionnaire can’t get caught in a PR debacle when it becomes clear that, for example, a one-man marketing consultancy (say for instance me) has no clear policy at all when it comes to the way it creates policies.

That sounds pretty ludicrous, but I suppose I could just about argue that it’s fair enough, or at least most of it is.  But what I’ve been thinking about is the fact that actually, in real life, the reputational risk to agencies found consorting with institutions behaving badly is far greater than the reverse risk to institutions.  In recent years I can’t remember any agencies being found guilty of despicable and/or dishonest behaviour, but I can hardly remember any financial institutions which haven’t.

Which makes me wonder:  who should be issuing the risk-management questionnaires around here?  And my answer is:  pretty obviously, it’s us.

Yes, sadly, I know:  no sooner have you started to consider this idea than you realise that it isn’t going to work.  The question you really want to ask is something like:  “Are you currently involved in any dishonest, manipulative or otherwise unfair activities that you will want us to have some part in communicating, or miscommunicating, to your customers?”  with maybe a supplementary saying:  “If yes, please give details.”  And there are two problems with this:  a) no-one’s ever going to answer yes, and b) almost everyone ought to.

So I guess that in the end, we’ll have to carry on relying on our instincts to help us steer away from anything too dodgy – and from time to time our instincts, very likely combining with the pressures on our bottom lines, will let us down.

Still, you must admit, as my headline says, it is a genuinely big if sadly implausible idea.

The “advice gap.” Is it really such a nasty surprise?

The FCA has just published the latest in what seems to be an endless series of reviews into the workings of the advice market post-RDR, and as usual it has whipped up a frenzy of comments from advisers mostly howling about how awful it all is.

Two things in particular seem to rouse their ire.  The first is that apparently no-one can make any sense of the distinction between independent and restricted advice.  Well, quite frankly, least surprising news of the century.  Even the FSA’s own consumer research, published in the run-up to RDR, said quite clearly that consumers found the terms confusing.  In their infuriated online comments, it’s quite clear that only a small proportion of advisers can understand it.  In the really grey areas, right on the margin between the two terms, I don’t understand it.  And in any case, even if anyone could understand it, it doesn’t express a difference worth bothering with.  If you go to see an adviser for some investment advice, and they have to tell you they’re restricted because, I don’t know, they don’t advise on junior ISAs, why does that matter to you?  Why bother making the effort to understand the most complicated distinction in the history of distinctions when it has no bearing at all on what’s going to happen to you?  I could go on, but I’m starting to sound much too much like a ranting IFA for my liking.

Then the second thing which generates a great deal of indignation – although I suspect of a much more synthetic kind – is the way that the move to adviser charging has supposedly taken advice our of the affordable reach of millions of not-very-affluent consumers, leaving them blundering hopelessly around in the featureless void called the “advice gap.”

I’ve written before that I can’t see any good reason why this “gap” should be any bigger under adviser charging than it was in the old commission era.  In fact, the evidence seems to be that adviser charges are very slightly higher than the old commission charges used to be – but the difference certainly isn’t big enough to have made a significant difference to millions of people.

I can only think of two reasons why the change in the way advisers get their remuneration should lead to millions of people being disadviserated, so to speak:

–  Taking a proper, serious look at their business models for the very first time, advisers have realised just how unprofitable their smaller clients are and so have resigned armfuls of them;

–  Or, finally, after years of trying and failing, the regulator has finally succeeded in making advisers’ charges so easily visible to the client that some, at least, are embarrassed to be seen to be taking quite as much as they are and have decided this really can’t continue.

I dunno, maybe there are some other reasons that I haven’t spotted.  But in any event, my key point is this:  in what part or parts of life can ordinary people with small amounts of money sensibly afford high-quality individual advice?

There may be one or two areas – health being the big one, law still despite recent cutbacks just about the other – where this is possible because the State pays.  But where else?  Ordinary people with small amounts of money generally can’t afford high-quality individual advice when, for example, they’re looking to redecorate their sitting-rooms, or choose a holiday destination, or pick a school for their kids, or buy a car, or find a care-home for their parents, or cut their tax bills, or change their hairstyles, or get a new phone or laptop, or anything much else where making great choices is hard and excellent advice wouyld usually help them achieve a better outcome.

In some of these and other areas, a non-individual advice industry has grown up to help fill the gap.  Most readers of What Car? magazine use it to brief themselves on their options before entering any showrooms and facing up to any sales people.  Paint manufacturers offer online services to help people see what their sitting rooms will look like if they do the walls in Golden Sunrise.  And of course the likes of Trip Adviser can help you avoid truly disastrous holiday destination choices.

In many areas too, a combination of competition, regulation and a little bit of decent behaviour by providers means that things can’t go too badly wrong.  There aren’t really any truly terrible cars any more, except perhaps the Ssanyong Rodius, and that’s so obviously terrible that you’d have to be a complete idiot to buy one.

In short, in market sector after market sector, commercial organisations of one sort or another, realising almost without a second thought that individual advice simply can’t make economic sense for most consumers, have come up with alternative kinds of support to decision-making that mean that the very large majority of people don’t finish up with anything too terrible.  It only seems to be in financial services that no such support is generally available, and without expert individual advice (and all too often even with it) consumers are more or less assured of dreadful outcomes.

I could speculate on why this should be, in ways that probably wouldn’t reflect great credit on our industry.  But that’s not where I’m going with this particular blog:  where I’m going today is to the conclusion that we just can’t go on giving consumers so little help.

The main thing we need to do much more of is to follow the trail blazed by Nest and find ways to get consumers to much better outcomes without the need for them to decide or choose anything at all.  That’s about 90% of it, and rethinking what we have to offer in this kind of way is always a whole lot of fun.

The other 10% is to keep on giving consumers choices, but to ensure they’re choices which they can easily and sensibly make.  This can be good fun too.

There’s big, important and enjoyable work to be done here.  But we’ll never make much progress with it while we’re still lost in the fantasy that what’s really needed is some magical new way that everyone can have individual, face-to-face advice.


Christmas cards update

There’s a steady trickle trickling in at home – I’d say we’ve now reached a number somewhere in the low 30s.  But my earlier comments about work cards are so far amply confirmed by events.  I’ve had no physical cards at all, and only two ecards, one from a client and one from an agency.

It would be interesting to know if corporate Christmas card senders are poised, as my wife is at home, to reciprocate as soon as cards are received.  But I’m not going to find out, or not from my own experience at least, because I won’t be sending any cards of my own to put firms’ reciprocation arrangements to the test.

Why have nearly all of us turned our backs quite so quickly and universally on card-sending?  Having pondered this trivial question at rather greater length than it deserves, I reckon that social media have a lot to do with it.

LinkedIn obviously doesn’t play exactly the same role as a Christmas card, but somehow it works in a similar sort of way – maintaining a thin strand of connection between people so that future communications don’t quite have to start from scratch.  In their non-work lives, keen Facebookers, Instagrammers and Snapchatters may well feel the same way.

If that’s right, then it’s an interesting more-or-less-unexpected consequence of the social media thing – an example of a behaviour shift, even though the new behaviour clearly doesn’t substitute directly for the old.  There are many others – for example, the tendency of today’s middle-aged blokes with stuff on their minds to bash out blogs rather than head to Hyde Park Corner with their soap boxes.

Just how ineffective can bad advertising be?

This morning it was time to tackle one of those small, regular tasks which seems to come around with ever-increasing frequency – namely, coming up with some kind of thought-provoking ideas triggered off by the latest wave of findings from Consensus Research’s legendary Investment Funds Survey.

Today, as is not infrequently the case, nothing fantastically thought-provoking came to mind.  But sometimes something does – and my thoughts were definitely provoked quite vigorously a little while ago by the “active investor” sample’s advertising awareness scores.

Specifically, It was the Blackrock advertising awareness figure which grabbed my attention.  You see, Blackrock had been advertising heavily for quite a while before the research took place – big ads, and lots of them, in a wide range of national newspapers.  If any fund management advertiser was ever going to record rapid increases in awareness, you’d expect it to be them.


Well, except that on judgement, everything else about the ads, apart from their size and the size of the budget, was obviously rubbish.  The ads were boring to look at, and boring to read.  Worse, the nature of the campaign – encouraging people to ponder coolly and philosophically on their savings objectives and behaviour – was completely wrong for a “hot” news medium like national press.  And worst of all – I don’t know if you remember the campaign – were the images in the ads, strange waxy-looking portraits of obviously-American people who said at a glance that whatever this dull-looking ad is about, it obviously isn’t for anyone remotely like me.

Now, the thing is, before seeing the IFS awareness scores on this campaign, I’d always vaguely imagined that advertising effectiveness operated within some sort of limited scale.  If an averagely-effective campaign scored, say, 100 on some kind of scale or other, then a brilliant campaign might score 200 and a terrible campaign might score 50.  Maybe – I’d never really bothered to pin this down precisely – the brilliant campaign might score 400, and the terrible campaign 25.  Or something like that.

But here’s the thing, and it’s a thing which you’ve probably seen coming for several paragraphs.  According to IFS, which researches a whole bunch of measures including advertising awareness (and brand awareness) among a sample of 250 “active” private investors, both during and after the Blackrock campaign there wasn’t a flicker of movement on the advertising awareness dial, and as far as I can remember brand awareness actually fell a little bit.

I make nothing of this second point.  I’m not suggesting that the campaign acted as a sort of topsy-turvy black hole, actually reducing brand awareness among those with the misfortune to see it.  But I am suggesting that at least in terms of awareness, the campaign had absolutely no effect at all – that compared to that average campaign scoring 100 on my effectiveness measure, this one scored not 50, not 25, not even two or three,  but zero.

And I suppose logically that if the dial can go all the way down to zero on the negative side, it can go all the way up to a million, or something, on the positive side.  All of a sudden, my 50-to-200 range is looking totally misleadingly narrow.

I’m not saying all this just to be mean to Blackrock, although I did think it was a horrendously misconceived campaign (and I thought it was a real tragedy that the one big budget available for fund advertising in the last few years should have been so completely wasted on it).  My point is that in a world where some people think of “execution” as little more than a commodity, and think that targeting and proposition are the only things that really matter in communications, this particular IFS finding suggests that maybe execution is a little bit more important than some people may think.

“Good news, Mr Camp, you’re not paranoid – everyone is trying to kill you.”

Writing about Christmas cards – and especially about how many I get – does rather remind me of the old joke.  It seems to me that the old habit of sending Christmas cards is in rapid and terminal decline – especially work-related cards, of which not so long ago I used to get a hundred or so but last year it was down to single figures.  Fairly low single figures, to be honest.

The worry, of course, is that maybe this is just me, and you’re still getting and indeed giving scores of cards as per usual.  But I’m brave enough to admit that even at home I reckon we were a third down on the peak last year, and I’m not expecting any recovery over the next few weeks.

In the longer term, I’d say the omens are if anything worse.  I really can’t imagine my kids ever doing much more than a Christmas tweet (presumably by a robin) or Instagram picture – it feels to me as if we boomers are the last card-sending generation.

The funny thing is, I can’t quite explain why it’s happening.  For the kids it may be a question of online-for-offline substitution, but to be honest among my lot that’s not really the case.  A few of us send emails saying we’re making charitable donations instead of sending cards, but most just stop.

I make nothing of this really, except maybe to add Christmas-card-sending to that list of social and family behaviours which we’ve all just somehow grown out of, like going out for a drive in the car or reading paid-for newspapers on our journeys to work.  Always changing, isn’t it, the world today.