THE FUTURE OF INVESTMENT – Part 2
Following on from my article (‘The Future of Investment – The Next Generation’) I wanted to revisit this topic again and to examine further what sort of advice (if any) millennial investors will want.
In the last article, I looked at five potential areas for investment services providers of the future to gain an edge:
- Low Cost of Entry
- Reward & Integration
- Peer Review
A number of recent conversations have got me thinking about the part that data will play in investment services (with the much maligned Yahoo Finance and their delivery & presentation of data being criticised from a number of parties) which then led me to consider how investment advice would work.
An angle I had not considered previously was the potential damage of releasing complex information without a detailed level of advice & understanding. For example, an ‘amateur’ investor will certainly need guidance and advice, not just on how to sensibly invest their money but also on how to interpret and analyse the increasing levels of data that are available.
Is this the responsibility of the data providers, the firms offering the investment services themselves or is it purely down to the individual? Where will the biggest market lie, in pure data provision or by putting a premium on providing investment advice (and taking all the regulatory impacts that come along with this)? The current set of investment services providers e.g. Nutmeg, while providing a much more ‘millennial’ feeling interface, still provide precious little detail on the actual nature of invested funds however there are a number of competitors which allow greater input & control.
It is possible that a divide will form between platforms & providers that cater to the truly ‘amateur’ investor (credit your account and sit back) or the more ‘interested’ side of the market (specific control, access to wider global markets and a greater integration of data and visibility). If this is to be the case, I predict that a further divide will form between those data providers (and in this instance, will the institutional data vendor heavyweights like Reuters & Bloomberg try to capitalise on the emerging retail market or will those who already supply other types of data in user friendly formats clean up e.g. Amazon, Google etc) and those who actually allow the routes to market including individual portfolio management and advisory services.
Either way, the feeling is very much that there is lots to be gained by developing an attractive proposition for the next generation of investors and having conducted more research following my last piece on the topic, there is unlikely to be an appetite for the older, high-barrier to entry type investment provider to try and attract what will be a higher volume and lower value part of the market.
If you are involved in the investment community in any way I would love to hear your thoughts on this subject.
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