The Power of Consistency

The Power of ConsistencyConsistency sounds boring. We’re going to have chicken and broccoli for dinner again. I ran my 30 minutes on the treadmill again. Consistency doesn’t lead you to discover the perfect town when you’ve made a wrong turn or meet the band when you’ve stayed well past the encore at a random weekday concert. But consistency can be powerful. Continue reading

If Opportunity Doesn’t Knock, Build a Door

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Despite new challenges in the financial services landscape, changing market dynamics offer new opportunities for those willing to adapt.

The economy is strong, with record low unemployment and robust market performance. Furthermore, the Dow topped 26,000 for the first time in January. However, rising trade tensions, divisiveness and political uncertainty are causing many investors to question when the bottom will fall out. For active managers, many of which lost share to index funds during this period of stability, the question arises, could there be a silver lining?

At first glance, the competitive environment appears inhospitable to firms lacking the scale to compete on price. Vanguard and iShares have amassed record inflows over the past year, pressuring competitors to lower their expense ratios. We’ve also seen increased M&A activity among mid-sized managers seeking global scale and broader distribution for their products as broker-dealers constrict the number of managers on their platforms. Continue reading

Three Principles of Effective Innovation for Utilities

Three Principles of Effective Innovation for UtilitiesNew products and technologies are changing how customers interact with their energy provider and have opened up opportunities to offer additional products and services designed to drive engagement, trust and revenue. The utility of the future will need to engage with customers through value-added products and services that go beyond simply providing reliable service, but how do utilities pivot from operating as a regulated monopoly to becoming innovative and inspired product marketers in a competitive landscape?

The good news for utilities is that they have abundant resources and capital to support new-product development. The challenge, however, is that they are accustomed to putting those resources to use within a very structured, regulated environment that is not well-suited to the free-thinking and “willingness to fail” ethos often required to successfully generate ideas and turn those ideas into new products and services. Simply put, innovation as well as product or service development requires a culture and skill set that many utilities lack.

Utilities should keep in mind three principles as they work to evolve into innovators and product marketers.
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Opportunity is Knocking—Are You Listening?

Opportunity Knocks—Are You Listening?Addressing Hidden Needs in a Mature Insurance Marketplace

A recent TechCrunch article spotlights Lemonade, an insurance upstart that is boldly reimagining the customer experience. The young firm has already made waves with its use of cloud technology and artificial intelligence to sell insurance, and now it is going a step further by crowdsourcing a full rewrite of its insurance policy from scratch, with the goal of devising documents that consumers can actually understand.

Lemonade has correctly identified a critical pain point for insurance consumers—the underlying product is begging for innovation. Traditional policy documents are inscrutable and full of legalese and were never written with customers in mind. The policy is a great place to start the insurance product revolution, but does Lemonade go far enough?
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The Missing Piece in Xbox One’s Big Comeback

With the Electronic Entertainment Expo (E3) coming up in a few days, the gaming community is eagerly anticipating what companies have in store. This year, many eyes will be on Microsoft, who has been secretive on what it plans to reveal. Their shift from the E3 show floor to the Microsoft Theatre at LA Live, just across the LA Convention Center, has heightened the intrigue.

Many people in the gaming community are hopeful that Microsoft’s move to its own space is a sign that the company has big things to share during its E3 press conference. Reading through pre-E3 online commentary, we find a community seeking a refresh of the Xbox brand, which seems to be falling behind in the current generation of game consoles. Reception for its latest console, Xbox One X, is tepid, even if it has the most powerful technical specifications.

So far, Sony’s PS4 has outsold Xbox One two-to-one.

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Is ESG Investing Relevant in the Institutional Market?

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Environmental, social and governance (ESG) investing is continuing to impact the wealth management space. As individual investors become increasingly concerned with the ethics and environmental impact of the companies they are supporting, they are passing that concern on to the institutions that manage their investments. In fact, ProxyPulse*, a report by Broadridge and PwC, found a growing momentum of ESG proposals in proxy meetings in 2017. Following the US withdrawal from the Paris Climate Accord, the report also suggests an expected increase in questions from shareholders on environmental impact and climate change in 2018.

To keep a pulse on the growth in the ESG category, Cogent tracks interest in and usage of ESG investing among all the audiences we survey: financial advisors, DC plan sponsors, affluent investors and institutional investors. Specifically in the institutional market, we added a new question to this year’s US Institutional Investor Brandscape report, fielded late in 2017 and publishing this month. We asked institutional investors in the US how likely they were to adopt ESG investing in the next 12 months. We found that, while few institutions have already incorporated ESG in their portfolios, usage is considerably higher in the non-profit sector, where the approach to investing tends to be more mission-based than is typical among pensions. Continue reading

The Internet of Things: A Story of the Haves and Have Nots

The Internet of Things: A story of the Haves and Have Nots A Market Strategies study identifies diverging points of view between two emerging groups of consumers and workers in the IoT market

There’s little doubt that the Internet of Things (IoT) is one of the most exciting and profitable sectors in technology today. IDC is predicting that global spend in IoT will reach a stunning $1.2 trillion by 2020—a figure that represents a compound annual growth rate of 15.6%. A recent Forbes Insights study even found that senior executives now see the IoT as the most important set of emerging technologies.

But the IoT market is also a competitive one. Companies in virtually all industries are now eager to join the IoT gold rush. Thriving in this emerging but lucrative market will require a deeper understanding of what consumers truly need, want and might adopt, whether for use in a personal or work context. Continue reading

Fighting Feature Creep and Creating the Right Credit Card Offer

Fighting Feature Creep and Creating the Right Credit Card Offer

Editor’s Note: As seen in Forbes Magazine, this study reveals which features consumers really want in their credit card.

A colleague of mine was strutting around the office the other day, excited about getting Hamilton tickets. A pretty good get, I have to admit. And then he told me that he had used the concierge service that comes with our corporate card to get access to a sold out show. Both of us were surprised to learn that our corporate card even had a concierge service—and that it seemed to work well. That got us thinking. Do most card holders even know the benefits of their credit card? And, if they do, does it matter?  So, of course, we decided to do some research.

It turns out we are not alone. More than half of credit card holders know about few if any of the features and benefits offered by their card. Which means the laundry list of features and benefits that accompany many cards is not having much impact on acquisition. Credit card issuers seem to be constantly adding new features in an attempt to lure more people to open their card. The question is, do any of these features matter, and if yes, which ones tip the balance?
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How to Avoid a Robotic Approach to Product Innovation

For many of us, robots seem to be more of a concept than a reality. We may receive a shipment from Amazon that was picked from the shelf by a robot, and we may drive a car with electronics and mechanical parts built by robots. Yet, with just a few exceptions, these robots labor behind the scenes where we are largely unaware of their impact and the role they play in our lives.

Enter Walmart, who has begun to test “shelf-scanning robots” in 50 of its stores. Designed to move up and down aisles and determine the stocking status and needs of each shelf, these robots have the potential to reduce labor costs and increase revenues through improved shelf maintenance. Not surprisingly, Walmart feels these robots could add millions of dollars of profit to its bottom line.

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Despite an Uncertain Fate, DOL Fiduciary Rule Leaves Its Mark

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A Shift Toward Level Compensation for Commission Products Is Likely to Shape the Future Product Landscape

While the regulators in Washington, DC, continue to kick the can down the road, there’s no doubt that the DOL fiduciary rule is prompting changes in advisors’ practices. As previously reported, advisors are moving further toward fee-based compensation, and predominantly fee-based advisors and RIAs are the only advisor segments that are growing.

Recent research with variable annuity (VA) producers further supports the trend of changing compensation models. Nearly half (44%) of VA producers agree that their firm is encouraging a level compensation structure that does not vary with the particular investment recommended. This proportion climbs to more than half in the National and Bank channels (56% and 57%, respectively). As a result, advisors expect to allocate fewer new dollars to VAs going forward, with one-third of advisors looking instead to the best interest contract exemption for commission products.

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