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The good, the bad and the ugly DIY investor experience
Jeremy Fawcett
Friday, October 16, 2015

This week Jeremy Fawcett (@jfawcett), Head of Direct, reveals the results of our recent test driving exercise for direct platforms…

Today we publish our latest D2C update on the investor experience and we’re seeing improvements. It’s fashionable to bash financial services for being in the dark ages when it comes to the end consumer and their use of digital technology, but we found the D2C players were all well able to do the job. They are fit for purpose… but some are fitter than others.

Without going into the gory details on the 63 secret shopping phone calls we made over our testing period and the nine categories that we test against, I’ll pick out a few observations on the D2C investor experience…

The good
Initial customer service is generally excellent. What differentiated the leading platforms is the following:
• Consistency – of response times and ability to handle enquiries.
• Ability of the first receiver to handle the call through to completion.
• If they can’t… how well is the call passed on and dealt with by someone else?
• Can they deal with more complicated requests?

The bad
Mobile development is either all or nothing at the moment. Either multiple apps for handsets, tablets, iOS and Android. Or barely optimised websites. The jury is out on how essential mobile is to DIY investors and what needs to be included in the mobile proposition (for example, whether trading is required as well as monitoring). Our view is that we are close to the tipping point where new and existing clients will expect the service that they choose to have a capable mobile proposition.

The ugly
Usability could be much better. Here is my ‘statement of principles’ on how I would like to be treated by a direct platform:
• Enable me to immediately fund my new account and trade.
• If you can’t verify my ID electronically, I won’t sign up to your service (honestly, I’ll never get round to sending those verified photocopies).
• If I can’t generate my own username and password I won’t remember how to login and probably won’t come back.
• Give me a big fat search box that sources any investments I fancy and returns result that I can understand (go easy on the share classes).
• Show my portfolio performance this year, last year and every other year… like a proper wealth manager.

Who fared well in our beauty contest?
• Fidelity Personal Investing wins the prize for Best Direct Platform for Guidance.
• Charles Stanley Direct and Hargreaves Lansdown share the honours for Best Direct Platform for Service.
• Hargreaves Lansdown secures the overall prize as Best Direct Platform.
• Charles Stanley Direct were best on cost for smaller portfolios with AJ Bell Youinvest and Interactive investor best for larger clients.
• For usability: Interactive Investor, Hargreaves Lansdown and Trustnet Direct.
• AJ Bell Youinvest, Fidelity Personal Investing, Hargreaves Lansdown and TD Direct Investing had the best mobile propositions.

The internet has made DIY investing a truly viable option but we’re still in phase one, a bit like online mapping was a decade ago... it was maps, online. (I was working at Yahoo when they were literally scanning enormous paper maps onto their servers.) Nowadays, Citymapper shows you where you are, your destination, how to get there, how long it will take and how much each option will cost. In fact, it virtually escorts you there, drawing real time data (unbeknown to you) from satellites, sensors and traffic/transit databases. It even sends an ETA to my wife, just in case she’s not tracking my progress on a ‘find my friends’ app already. Wouldn’t it be good if D2C 2.0 looked a bit like that?

We’ll be looking at all this again in our report on workplace savings later this year which will include a section on employee engagement. We hear that the robo advisers are coming to an office near you soon to drive up savings rates and to achieve better outcomes for investors. We’ll see whether the promises live up to reality.

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