5 tips to engage the DIY investor
In recent months, as Brits haven’t been able to go on holiday, eat out, or visit shops, there has been an increased interest in personal finance and savings. Many of those who were fortunate enough to remain in steady employment have been able to save money during lockdown and this has spurred consumers to embrace the opportunity to create long-term wealth.
Robo-adviser, Nutmeg, recently conducted a survey revealing that consumers aged 25-34 “feel they will emerge from the pandemic wealthier, more financially confident and determined to use their money to do good.”
The findings show that half of the people surveyed cited “financial stability and prudent investing” as a top priority. But the research highlighted a worrying trend for financial planners and advisers, with many potential clients embracing a DIY approach to investing.
Findings from a survey carried out by Nutmeg in February 2021
Nutmeg is just one example of multiple low-cost retail platforms that have made trading and DIY investing more accessible. 21% of those surveyed by Nutmeg said they are “much more likely to make and manage investments themselves since the start of the pandemic”.
There’s no doubt that more people are opting to make investment decisions themselves. They have easy access to more information and believe they know what they are doing.
The question for financial professionals to consider is how to engage these self-sufficient DIY investors.
The first consideration to acknowledge, as CEO of Boring Money, Holly Mackay, pointed out in an Investment Week article, is that “good investing is boring”.
With that in mind, here are five useful suggestions for how to reach this self-sufficient audience.
1. Know the value of your expertise and how to sell it
Expert financial advice can lead to better results, less stress and more control over finances. These are all compelling reasons to at least spend some time listening to how a professional might be able to help.
Because many consumers don’t know the value of advice it’s up to you to ensure you know how to communicate your value in a way that is immediately relatable and relevant.
2. Adjust how you present your service to suit your audience
You can only do this if you understand your audience first.
In 2019, 15% of all trades were placed on mobile and the growing trend would suggest this number has since increased. But the research is still more likely to be done on a desktop, according to Boring Money.
This strong tendency towards accessing information online and making trades on mobile devices means you need a digital-first approach.
And access to data and information is going to be a key driver for those who are used to self-investing. They will expect 24/7 access to information about their investments. Deliver on this, and you’re far more likely to win over the self-sufficient client.
41% of global investors check their investments at least weekly
Source: Schroders Global Investor Study 2019
3. Have high-level conversations about the market and investing
DIY investors will be self-taught and value the information they have garnered on their investment journey. If they are talking to you, they’ll expect you to enhance what they have learned and provide a useful sounding board, while also proving to be a good sparring partner.
You should expect to have high-level discussions about global markets. The material you sift through and collate in your own work as an adviser, and through your investment committee, is exactly the type of information these clients will expect.
Consider repackaging some of this information to communicate with these investment-focused clients and it may help you discover a perfect – and profitable – meeting of minds.
4. Be a valuable source of information
DIY investors will be used to educating themselves and are probably hungry for more information and fresh sources.
By being a reliable source for financial education, timely information, and discussion, you will position yourself as a useful player. You may play a long game, but it could pay off, especially if you’re in the right place, messaging hundreds or thousands of DIY investors at the same time.
5. Market your services in the places where DIY investors are
Consider advertising on forums like Reddit, which have investors actively engaged in conversation. Better still, sign up and join the conversation. It may be time-consuming, but with an active audience, it could prove a good way to build awareness and create discussion that you can play to your advantage.
Create a social media strategy specifically designed to help you give DIY investors and younger clients information, and useful hints and tips. Try using #lifehacks or #moneyhacks to drive attention to your messaging and increase your number of followers.
Promote messages which your potential audience will engage with. Lead with your tech and explain how easy it is to work with you and the potential gains they can enjoy by investing with an expert to guide their decisions.
As with your other clients, eventually, there’s likely to be a life event that leads these self-sufficient investors to seek advice and expert help. If they have engaged with you, even lightly, chances are they’ll remember and turn to you when they need a steer in the right direction.
6. Upsell the value of a holistic financial plan
Instead of being disheartened by the rise in armchair investors, remember that with the increased numbers going it alone, there will eventually be a need for advice from a financial planning professional.
A self-sufficient investor may be great at generating growth, but what about buying or selling houses, retirement planning, tax efficiencies, or estate planning?
There’s plenty of scope for you to add value. You just need to know what that is, and be ready to strike when the opportunity presents itself.
Key life events such as house moves or retirement decisions are exactly when you can deliver more value. Watch out for these specific opportunities and be ready with the right messaging.
How AdviceBridge can help
AdviceBridge has developed a platform that helps financial planners deliver personalised financial advice to clients, through automating many of the manual processes in an efficient and cost-effective way.
The white-label app gathers personal and financial information from the client and digitises many of the time-consuming processes, allowing you to focus on the relationship, instead of admin, research or reports.
It also calculates the monthly income the client will receive in retirement, alongside a “safe to spend” figure of what they can spend on a monthly basis currently. Its sophistication and detail also shows the best way to invest across different tax wrappers, cutting fees and saving tax.
Get in touch
Find out more about our service and how we can help by emailing us at firstname.lastname@example.org or call us on 020 3925 3850.