Online business and its big data are now the world’s key drivers in giving consumers what they want or need. And what consumers increasingly want is to self-serve, to make commoditised buying decisions on their own so allowing trusted brands to sell them goods and services they feel confident in.
So far so obvious. And while in such helter-skelter change it is the appropriately named fast-moving consumer goods that lead the way, financial services is not that far behind, at least not in places like Hargreaves Lansdown and the price comparison sites.
But those who know that personal advice is vital if consumers are to make the right decisions are necessarily lagging behind, because digital cannot do that level of personal just yet.
It can guess very cleverly, but that is not comparable to regulated advice.
So how do we grow our businesses amidst the digital blitzkrieg?
I think there are three routes through for advice:
Carve out a niche where your way of doing it will work even if the rest of the world moves on. Financial planning (or similar) for busy, rich folk will do that, so that is where loads of us are staying or going.
Develop an advice service that connects well into the digital space, perhaps through existing players or through social media marketing and advertising. This is much harder than finding your niche, but the potential rewards are far greater, as is the risk, and there are plenty of success stories.
Go digital and trade online end to end. The bravest route, with very few success stories and many expensive casualties, including one of mine as it happens. If you lined up all the launch press releases against the ones celebrating success actually achieved, you find very few are still talking. Capitalism is a quiet assassin.
Route three will one day dominate our market, but do not hold your breath, because for the foreseeable future there is a huge hole in the everyman space where analogue advice is still needed because digital solutions are not yet capable of achieving good consumer outcomes. That hole needs to be filled, and will do for many years yet, by some sort of connector between the scattered advice sector and the uncertain online mass-market consumer.
Of course there is one already, one much derided in these pages over the years, but not so much just latterly. Let’s hear it for the Money Advice Service!
Its several previous leaderships have burned many of our millions to no real effect but the new and current team has started its tenure by acknowledging that many who access the MAS will need regulated advice in all its various forms. And it has hired the wise and able Teresa Fritz, who has long been a fan of advice at Which? and elsewhere, to help them “build a workable process that takes its users to the right parts of the regulated financial services system to get appropriate advice or take appropriate action”.
That sounds like the right kind of connector to me, so I will be trying to help Teresa open up that route and make it workable. No easy task but imagine there being a well marketed, easy way for consumers to access advice that they love, like they do Amazon or Ocado even, and how good that would be for them and for advisers and society generally.
I know you will believe it when you see it but I think we should rather try to help it become a reality by accepting that past failure never stopped future success and working with the new MAS.
Tom Baigrie is chief executive of Lifesearch