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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
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
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?
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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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.
The Internet of Things (IoT) is catapulting the energy industry into a new era of products and services, and the demands and expectations of utilities are rapidly changing. According to the IDC, energy utilities are currently the third largest investor in IoT ($66 billion) and this will alter how these companies interact with their customers. As an 80’s kid, I am reminded of a memorable song by Stereo MCs entitled Connected. The song’s chorus goes:
If you make sure you’re connected,
The writing’s on the wall,
But if your mind’s neglected,
Stumble you might fall…
More than ever, our connections with people, places and things drive and define who we are and what we do. These connections are directly impacted by the IoT explosion across our society. Back in 2008, more “things” were already connected to the internet than there were people in the world, and the momentum of this trend has multiplied over the past 10 years.
With 73% of the population regularly streaming video, consumers are racing to get streaming-capable devices for the holiday season. Not only has it been reported that Amazon accounted for half of all online Black Friday sales, its own Fire TV stick was the second most popular item sold on its site. Likewise, one of the hottest items this season at big-box stores such as Best Buy, Walmart and Target are smart TVs. There is little doubt that today’s consumer has become comfortable with streaming video and is looking for more ways to stream content. Continue reading
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Opportunity Lies with IRAs and the Younger Generations
National and regional banks are facing a big challenge in establishing themselves in the wealth management industry—even among their best, most affluent bank customers. Although it would seem to be a natural extension of banks’ offerings, fewer than 20% of affluent investors would even consider their primary bank for wealth management products and services. Moreover, banks claim an average of just 20% of the total assets from the few customers who would consider them for wealth management offerings, so there is ample opportunity for wallet expansion among banks’ current client base.
To dive deeper into potential opportunity, we asked affluent investors how likely they would be to consider their primary bank for a list of wealth management product and services. Nearly one in five would consider opening an IRA with their primary bank. This positions IRAs as a gateway for aspiring banks to move traditional banking customers into their wealth management businesses and obtain a greater percentage of their customers’ overall assets.
Highlighting an opportunity to target further, significantly more affluent Millennials and Gen Xers are likely to consider their primary bank for wealth management products and services than not. Targeting these younger generations through their preferred digital platforms will give banks an edge and the potential boost to consideration from these investors. Continue reading
It’s not uncommon for financial services market researchers to have to share results that are not what clients and their stakeholders were hoping to hear. And yet speaking research-driven truths is an imperative when developing products and improving the customer experience.
This is especially true when consumers see a client’s product as a “commodity,” meaning something all financial services providers offer that are pretty much interchangeable in terms of features, benefits and costs. This is particularly tough when the client’s product team is involved because it can feel like a non-starter, as though there’s nothing they can do to differentiate the offering.
This couldn’t be further from the truth.
When launching a new product, many factors impact the success of the product: timing, marketing, ease of use, availability, price… I could go on. But, across the board, one factor makes or breaks the success of a new product: Relevance.
Now more than ever, a product not designed to fit into the lifestyle of the customer will fail. The only question in those cases is how long it will take! While this is true for any industry, this is particularly the case for the financial services industry. Additionally, as FinTech changes the landscape for financial services companies, the need for new and innovative products is significantly increasing. Continue reading