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Building a Customer-First Investing Framework

November 26, 2019

With all the trends impacting the investing industry, it is important to note that there are key factors at play – all intersecting and engaging with one another to move the industry ahead and define what tomorrow’s investment experience will look like.

There is a distinct intersection of 3 key trends that are shaping the investment landscape redefining the user experience:

  1. The New Age Investor and Demands for Personalization: Investors today are conditioned by their consumer experiences – they expect a truly personalized and customized experience that fits their needs.
  2. Subscription-based is the Name of the Game: Subscription – based models have also come as a result of broader consumer trends. Subscription offers have created a two-fold benefit, they set up a recurring process that removes some of the guess work for consumers, while also creating stickiness for the companies that provide them.
    – Bonus: Subscriptions within investing make the offers digestible and remove yet another barrier of entry for investors.
  3. Next Phase of Robo Advice- While not exactly new to the industry automated investment options (i.e. robos) continue to be introduced of enhanced – creating customized offers and platforms at all different price points.

The New Age Investor

Investors are being increasingly influenced by their broader consumer experiences. This means they require personalized advice that takes an individualistic view and is positioned as truly unique. When today’s consumer orders food, clothes or even vitamins, they have an expectation that it speaks to their truly unique needs and profile. And the same expectation is being built in their financial life as well…

So, there is this idea of – what about me? And how does this impact me personally?

In terms of investing, we have seen this need for personalization support the growth of socially responsible and environmentally concise funds. In fact, emerging investors are twice as likely to invest in funds that incorporate environmental, social and corporate governance considerations.

A personalized experience also means meeting the investor on their terms and through their preferred channels – more than half (63%) of Millennials demand a mobile platform for investing as they are, they ONLY way they choose to interact with investing.[1]

Getting a personalized experience does come with a price – namely sharing data and information to further personalize offers. Recent studies have pointed to the fact that half (50%) of global investors are broadly open to sharing personal information, in exchange for a customized solution.[2]

Personalization is in action today with the likes of niche players like Ellevest, Finhabits and True Link Financial that are showing that they know how to cater to specific audiences and create the solutions that work best for them.

The bottom line: Investors expect to have the option to personalize and customize investment options and demand full transparency in designing the approach that works for them.

Subscription-Based Model

Subscription-based models in investing remain nascent but are emerging as an easy way to open to potential new customer segments. This new pricing model matters because it considers the broader consumer trend of growing subscription services while eliminating additional barriers of entry to invest and receive advice.

If we look at the broad landscape, we see that the subscription e-commerce model has grown 100% per year over the past five years. With offers that increasingly target individuals 25-44 years old, this is a ripe area for investment platforms to differentiate offers.[3]

Studies have shown that many advisors are concerned about fee compression, and a subscription-based model can help combat that, bringing in more clients and tailoring their solutions in the long run.

Charles Schwab is getting a head start in the race to subscription-based pricing by integrating the new pricing model as part of its digital advisory service. The recently renamed Schwab Intelligent Portfolios Premium will now charge an upfront fee of $300 and a flat $30/month vs. the previous 0.28% of assets.

The bottom line: ‘Pay as you go and stop when you don’t’ is becoming a true consumer mantra as the appeal for on-demand products and services broadens its reach.

Robo Advice Enters Act 2

Robo-advisors have evolved a bit over the last decade with several players settling into niche offers and embracing a hybrid approach.

Robo platforms are increasingly important given that younger investor generations are coming of both age and wealth and are looking for investment options that speak to their unique needs.

The robo-advisors of today are more than just bot supported, they are seamless, data integrated and tailored to the unique needs of the individual. With over $980,000 in AUM today – robos will continue to enjoy a CAGR of 27% through 2023[4].

Options are proliferating – with 200+ robos on the scene today and more projected in the future. Robos are anticipated to continue to embrace a hybrid model that is supported by human advisory.

Betterment was one of the earliest robos and is a true success story as its business grows and evolves. Betterment was founded in 2008 with the principle that investing should be simple and open to everyone. Today with AUM of $18B+ Betterment has grown its base, thanks to $0 minimums and by embracing a hybrid model with access to advisors. The next stop…moving beyond retail and selling to RIAs.

The bottom line: Robos were introduced as an easy to understand solution in a complex industry. By making investing simple, while customized, robos have changed the mindset of investors and providers alike.

What does it all mean?

Given the changes in the industry – from provider advanced, to investor demands all occurring in the face of macro changes, there is a greater need to understanding the customer’s needs, wants and behaviors. At Big Village, we get it. Our business is built on addressing the what consumers believe in agreement with how they behave through refined data integration.


[1] “Personalization Is the Key to Winning Emerging Investor Loyalty.” Wealth Management. May 2, 2019.

[2] “5 Ways Financial Advisors Should Approach Personalization For End-Investors. FactSet Insight. January 11, 2019.

[3] “Amazon, Netflix and now Schwab: The risks in subscription models.” Financial Planning. April 3, 2019.

[4]“Worldwide Robo-advisor Stats.” Statista. 2019.