This article was originally written for The Findings, published by Owen James Events as part of their Meeting of Minds programme.
It could be the synopsis for Mission Impossible IV: your mission, should you choose to accept it, is to flog financial products & services in the midst of the worst recession on record, and after some of the biggest names in the industry have cost each family in the country over £4,000, in estimated additional tax liabilities, to bail them out.
You will operate in an environment scarred by the abject failure & subsequent abandonment of the regulator’s principles-based regime, the continued uncertainty surrounding the Retail Distribution Review and its EU equivalent, the ongoing consolidation amongst manufacturers & distributors, and the emerging threat of an additional layer of product-based regulation.
That sounds like a bridge too far, even for the likes of Ethan Hunt & Co.
At the heart of this epic challenge is the issue of trust, or more accurately, the lack of it. The great British public simply does not know who it can trust to look after its money any more.
For many people, that trust in traditional financial institutions has been gradually eroding for the past three decades, starting with the demise of The Man from the Pru and continuing through the endowment mortgage and pensions mis-selling scandals to the present-day bank charges, mortgage fraud and PPI headline-grabbers.
Indeed, the day that The Pru, Royal Liver etc. stopped knocking doors is a very significant one. From that point, traditional financial services product providers and distributors lost the capability to nurture a personal relationship with the mass market. Instead, they gradually shifted their attentions to focus on the more lucrative high net worth individuals. It should come as no surprise that the “Savings Gap” first cracked open around this time.
Today, as the recession hits that mass market the hardest, the industry finds itself being accused of being morally bankrupt as it continues to hunt the whales at the expense of the people who need suitable products & advice the most.
And therein lies the greatest opportunity this sector is likely to encounter for several decades. We really are in the midst of a perfect storm for anyone considering a move into mass market retail financial services distribution.
Arguably, the mass market has perhaps never been more conscious on a daily basis of personal and national finances since the end of WWII. This, coupled with technological advancements which are revolutionising the way we communicate, means that more and more ordinary people are going online to research, discuss and recommend financial products and services to each other, and then purchase across a variety of distribution channels. Remarkably, since the onset of the Credit Crunch, ordinary people have started to save again.
They are not limiting their attention to the traditional scope of financial services. A new medium of ‘micro-finance’ is emerging, which focuses on budgeting and cost control in areas such gas & electricity, mobile phones & broadband, travel & shopping .
Almost three quarters of a million people visited Martin Lewis’ moneysavingexpert.com website in just ONE DAY last week, viewing over three million web pages. They were looking for discount codes, restaurant vouchers, coach & train deals, free wills guides, and the top savings accounts.
It isn’t just information that is being sought; these people want advice and validation of the decisions they are making, prior to purchase. This is the very heart of the opportunity – the mass market is looking for a new source of trusted advice to fill the vacuum left by those now trawling for whales.
Retailers that are considering offering financial services, have multi-channel distribution capability, five-star customer service reputation, trusted brand, integrated social media strategy, and transparent product pricing – your time has come…
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