translation

If you work in the investment industry, I'm sure you've often found it difficult to explain what it is you exactly do to people outside your professional circles. I don't know about you, but I often prefer to avoid the subject for the sake of having a simple conversation. Then there was also that time when you would simply steer clear from the possibility that people would think you were one of those 'evil bankers' when financial institutions were in the doghouse.

can you keep a secret
can you keep a secret

A few years ago, I remember bumping into a client at an airport. He ran the investments of his country's largest pension fund. He was in the company of his closest personal friends and about to travel out for a stag weekend. Before we could even start talking, he took me aside and asked me not to mention anything about work because as far as his friends were concerned, he was 'just a director' at an insurance group.

What is wrong with this picture? I would say 'everything'.

We seem to keep forgetting that financial services actually is a consumer industry. If it weren't, why would banks have so many branches and spend so much on advertising. It goes beyond mortgages and savings accounts. The ultimate beneficiaries of pension funds are individuals and mutual funds were originally conceived to provide 'Mr. & Mrs. Smith' with acces to financial markets via expert fund managers.

It used to be all about access. Not that long ago you still needed an infrastructure and a license to trade financial markets. Now, this is no longer true because technology has brought markets directly to the people thanks to the Internet.

It also used to be about knowledge and information. That has also become something of the past because today an abundance of data and insight is available to anyone with a smart phone.

People have access to all the information in the world but that doesn't mean they know what to do with it. Investing is not exactly an intuitive process and whenever it becomes one, you get 'behavioral finance', which is ultimately a fancy term for emotionally driven gambling and the herd mentality that makes people irrational and greedy. It makes them buy at the top and sell in panic at the bottom.

What the work we do is supposed to be all about is education, guidance and ideas. This seems obvious. However, most of the industry still communicates with people in the same cryptic insider language they used before when they held all the cards.

There is a new generation of millions of people who either live in emerging markets and have no financial background or grew up associating financial institutions with 'trouble'. When it comes to these people, it is not about winning them back because they were never a part of the system, but it is all about helping these absolute beginners understand how they can benefit from finance.

There is a huge untapped market for those who know how to entertain people while educating them to make smart investments. I believe a great way to do this is by either gamification (more about that soon) or using cartoons, one of mankind's oldest ways of communicating (think cave paintings, ancient hieroglyphs and even safety instructions leaflets, etc)

Let me make the point with an example: