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Platforum: How the D2C platform market is evolving

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Jeremy Fawcett

We may hit peak oil before 2020 after which production goes into terminal decline.

At Platforum’s recent D2C & Digital Investing conference, it was suggested by Econsultancy founder Ashley Friedlein that we have already hit peak CDO – the point at which the chief digital officer function is most prevalent in companies.

Of course this is not suggesting “digital” is in decline – in fact, the opposite – but as digital becomes part and parcel of every aspect of business, the concept of giving responsibility for it to one individual becomes outmoded… unless that one person is the chief executive.

What other nuggets came out from the day?

Interactive investor confirmed it intends to roll out fixed pricing to its combined customer base following the acquisition of TD Direct Investing. However, low-cost status is not the preserve of the fixed-cost provider with Vanguard going direct and Barclays showing with its new proposition that banks can be competitive both in terms of pricing and consumer engagement.

Vanguard head of retail growth Rob Fisher talked about how investing should not be just for the rich; which sounds remarkably similar to the “democratising wealth management” mantra of the robo-advisers.

Nutmeg announced it has acquired over 20,000 clients this year, taking total customer numbers to over 45,000 and assets to more than £900m. Half are first-time investors and chief investment officer Shaun Port says the breakeven moment is within their control.

Meanwhile Hargeaves Lansdown digital strategy director Chris Worle talked about how it can be difficult to challenge a traditional model internally when everything is going well.

Hargreaves will not be complacent but it will be increasingly challenged. While asset levels for individual propositions might bump around a bit over the short term, it will not be long before we begin to get an idea about which big bets pay off.

Worle pointed out that “scale brings headaches” and a need to focus on core propositions, which was possibly a reference to Hargreaves’ decision to drop its peer-to-peer platform. However, outsourcing also has challenges and consolidation around a few tech providers means there will be a slower pace for all those working on projects according to Aberdeen head of digital and Parmenion Martin Jennings.

Consumer engagement is a key battleground and Santander’s James Dunne advocated using “Daily Mirror language” to talk to consumers. He also talked about taking compliance with you on the journey of building a proposition and its messaging.

The People’s Trust co-founder Daniel Godfrey thinks we need to give investors more kudos than we do for understanding of some investment concepts like the difference between permanent loss of capital and short-term volatility. His advice: “When the plane hits turbulence, it’s better to tell the passengers to put on a seatbelt rather than a parachute.”

Finally, we heard from Paul Lewis, the presenter of Radio 4’s Money Box, on the “ridiculous distinction” of “advice” and “guidance”. Cutting down the “ridiculous options” that are thrown up as a part of a guidance process is common sense but turns guidance into advice.

Paul talked about how millennials want their pension to work through an app but how artificial intelligence will make this possible through a voice-activated system like Alexa. (AJ Bell Youinvest would point out it already offers account interaction via Alexa.)

To quote Paul: “The future of financial guidance is financial advice. The future of financial advice is artificial intelligence.”

Jeremy Fawcett is research director at Platforum

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