Platforms have done a great deal to move investments into the digital age. Many now offer straight-through processing capabilities and integrated tools that minimise manual intervention from the adviser, saving time, resources and money.
But while some platforms have made processing investments far more efficient for advisers, their impact on communications has been less significant.
Some 31 per cent of retail investors believe the fund industry is in the dark ages when it comes to fund information and 32 per cent feel that information is impenetrable for anyone but an expert investor, research by Instinct has found.
Aside from the suitability and treating customers fairly issues of investors not understanding their investments, there is also a commercial benefit to providing better information.
The research found that almost half of the respondents said they would be encouraged to invest if fund information was easier to understand.
Just more than half would also be more likely to invest with a provider that produced interactive fund data, while among the investors asked to rank the usefulness of fund information in different formats, interactive online content scored highest, ahead of verbal, hard copy and static online data.
In a world where we can access up-to-the-minute personal account information from banks, energy providers and even supermarkets, anytime, anywhere, it is not surprising that retail investors are keen to have that same interaction with their platform.
What is more surprising is that when advisers were asked to rank their priorities for accessing fund information, downloadable factsheets scored highest, followed by interactive online data.
There is clearly a gap between what investors want, what advisers want and what platforms are currently providing. It’s not about delivering more information – we’re currently being exposed to ever-increasing amounts, which makes decision making more difficult.
The RSA’s Wired for Imprudence report earlier this year highlighted that poor financial capability was not simply a problem of lack of information.
It found one of the main hurdles to financial capability to be cognitive overload: having too much information in your mind at one time tends to make you look for the simplest option, rather than the best option.
Unless we develop better ways to consume and process data, it could end up paralysing our decision-making capabilities.
When it comes to communicating information, financial services companies tend to rely quite heavily on lists, tables and text interfaces. But people don’t have the time to process and interpret all the data they’re being bombarded with on a daily basis.
The answer is data visualisation – conveying information clearly and effectively through graphical/visual means. By blending technology and creative design, exciting opportunities are opening up for firms to present data in a much more visual and intuitive way.
The need for companies to provide effective, engaging information is integral to the FCA’s approach, so there’s also a regulatory imperative to make improvements in this area.
