7 trends reshaping financial services
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TRANSCRIPT
Geraldine D. Leder
June 2009
1Populist backlash rips the wealthy
2Trust is broken, value is compromised
3Cost-conscious clients rethink going it alone
4 Tax burden will be oppressive
5 Winners and losers emerge in distribution
6Digital is operating force in 21st century
7Winners use crisis to review, regroup, reform
7 trends reshaping financial services
1. Populist backlash rips the wealthy
Populist sentiment sours for top income brackets
Perception gap widens between wealthy vs. “working families”
Wall Street has gone from revered to reviled in eight months
We lack heroes to rehabilitate the industry’s image and standing
Implication:
Government action has become a wild card in the business model
2. Trust is broken, value is compromised
Innocence lost – big job to regain trust and reestablish value
Dissatisfaction spreads like wildfire online
Brand confusion and merger fatigue prevail
Implication:
Time to sharpen the
meaning and value in full-
service relationship.
Clarify the brand promise,
what firm stands for
3. Cost-conscious clients rethink investing on own
Cost is an issue in the absence of value
Online account openings – up!
Fee compression is near certainty
Clients will dictate the terms of engagement
Implication:
More investors want
investment firms to
“help me invest with you”
– argues toward multiple
business models
*Spectrem Affluent Marketing Insights 2009
4. Tax burden will be oppressive
Tax burden changes wealth/consumption habits for ourselves and our clients
One-third of voters (taxpayers) pay no income tax and this number is rising
Preservation of wealth from taxation requires attention, focus
Wealthy retired people change their state of residence to avoid high
tax states in favor of places where they can keep more of their
income. (Heartland Institute)
Implication:
Lower returns + higher taxes = bleak prospect. Provide insight and help before they need it
5. Winners and losers emerge in distribution
Distribution drives opportunity
Innovation and long term focus are keys to staying alive
Lower margins will mandate bigger books, doing more with less
Need NEW clients and client segments
Implication:
Throw out conventional
thinking about models,
products, compensation
and client targets. Learn
from growing providers.
Distribution prediction: winners & losers
Source: Predictions by Chip Roame, Tiburon CEO Summit XVI- 4/09
Gainers
Online financial servicesIndependent repsFee-based financial advisors
Unclear
DC plansRetail banksDiscount brokers
Losers
WirehousesInvestment banksInvestment consultants
But what about the day AFTER tomorrow….?
Variable Service Model “straw man”
High touch •Systematic contact•Annual review•Go to meeting/video conferencing
Medium touch •Online trading•Chat and instant messaging (dedicated coverage)•Online collaboration•Education/non-sales seminars and webinars
Automated •Call center & live chat service•Online trading•Education/training
Source: LederMark Communications, LLC
6. Digital is operating force in 21st century
Companies, advisors will use social media to:
Market into customer communities
Leverage voice of consumer
Educate, engage, encourage
Become more customer-centric
Implication:
Experiment with social media. Use this unlimited ability to segment and
personalize to grow your business, cut costs, win
advocates
Companies are reconfiguring marketing budgets
Source: Marketing Sherpa, Marketing and the Economy SurveyMethodology: Fielded September 24-29, 2008. N=382
7. Winners will use the crisis to review, regroup, reform
Seismic changes in our country’s economic system will restrain growth as far as the eye can see
Brands that show courage to rethink all business assumptions will have the best chance for success
Innovation: new service model, pricing structure, business model and client segments
Grandfather current advisors and rethink model for the future
Don’t let the crisis go to waste!
Implication:
Restore prosperity
through technology for a
better, more client-centric
model, improving firm-
client dialogue, speaking
out against bad industry
behavior
What to do next….
Continued cost focus
Work on the new model – time is a-wasting
Look to different clients, not to squeeze more from existing ones
– More teams, bigger books
– More business specialization, gender/ethnic diversity
– More choices among service models
Experiment with social media -- blog baby blog!
Nurture a more client-centric culture – speak out against business practices that fail our clients, increase dialogue with all clients, young ones especially
What else is “next”?
How LederMark can help…
We work with broker-dealers, RIAs and mutual fund companies in the following areas:
Consulting services Strategy – positioning firms, businesses and products
Qualitative research – exploring market needs, from research design through facilitation and analysis
Marketing project management – examples include:
• “fresh look”
• outsourcing
• marketing campaign development
Marketing communications Integrated marketing campaigns/projects
Creative services and production
Content development
• Selective financial writing
• “repurposing” institutional content for other audiences: e.g., financial advisors or retail investors
Contact us
LederMark Communications, LLC401 Washington Avenue, Suite 600Baltimore, MD 21204-4837
Gerri Leder, [email protected] 443.279.7901
Fran Minakowski, Managing [email protected] 443.279.7903
Heather Koziol, Administrative Assistant443.279.7904
Facsimile: [email protected]