South Africa boasts a plethora of products available for the investor.
This array of products suits the needs of various clients. And if there is a gap in the market, have no doubt it will be filled very quickly.
As from June 2017 there were 1 556 rand-denominated collective investment schemes registered in South Africa alone, according to the Association for Savings and Investment South Africa (Asisa).
This is in addition to 1 054 foreign collective investment schemes.
Don’t get me wrong, product design is important, yes, but we need to shift our attention away from pure product and concentrate on the client experience.
Design thinking, a methodology used to solve complex problems and find desirable solutions for clients, has been around for some time, however it has not fully been applied to the investment and asset management industry in SA.
Design thinking is described by Tim Brown, the CEO of IDEO as “a human-centred approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success”.
The investment and asset management industry has for too long focused most of its efforts on designing products and not given enough attention to ensuring a seamless and enjoyable client experience.
The Apple iPhone is perhaps one of the most emphatic examples that incorporates client experience and ease of use.
When you purchase an iPhone you can immediately feel the quality in the fibreboard casing that holds the phone.
You lift the lid and you feel the unique suction design which, combined with the phone display in the box, immediately creates that “wow” feeling. You remove the phone from the casing and notice that there is no operating manual – everyone knows how to use an iPhone.
And if you don’t, not to worry, it is very easy to get to grips with. The new iPhone X doesn’t even require a charging cable, you charge your phone by placing it on a charging pad.
Not only is the hardware design immaculate, the user interface is very easy to use. So easy, in fact, that the majority of smartphones use some sort of derivative of this system.
And here is the important part: you don’t need to know how the algorithm for each app is written in order to operate the device and get an outcome! You do, however, get the expected outcome.
Of course, a financial product is not tangible like a cellphone, but the underlying user principle is still sound – you buy a particular product in order to meet a particular need or in the pursuit of a particular goal.
You buy a phone to make calls, access the internet, take pictures, and so on, and you buy an investment product in order to meet a future goal.
An important issue that largely remains unaddressed is that the “buying process” is not simple and often the seller does not ensure that the client understands how the underlying product functions.
Regulatory requirements are playing an ever-more integrated role when it comes to financial products, however, there is no reason why we cannot explore ways to make the client experience more pleasant, ensuring that they understand the products and making said products easier to use.
So where do we start in order to create such an experience? There are some quick wins.
First, signing up for a product needs to be paperless, easy and quick. This is simply a means to an end. Millennials and the generation that comes after them will most likely not have use for a pen with ink.
Second, online interaction is more than just “online” – actual interaction should be a key part of this.
Electronic advice should be paired with the possibility of a FaceTime, WhatsApp or a Skype call with an adviser or broker.
Third, product descriptions should be easy to understand.
The client should have a roadmap of what to expect in simplified language. No algorithm, but an idea of what to expect.
Ease of use and client experience should take centre stage. We tend to think more about the outcome rather than the process.
The entire process should focus on the client. What are their needs? What do they want? What is the desired outcome? The phrases “What does the client value?” and “How can I add value to the client’s life?” should resonate and be repeated constantly.
At the end of the process the client should feel that the product, or better yet, the financial journey, that is selected for them to walk in order to reach their objective is a path created and designed uniquely for them!
In recent years, there has been a lot of emphasis on designing products that speak to a particular need – or perhaps perceived needs – of clients.
In this regard, the industry has done a very good job, and perhaps even too good a job given the wide array of products to choose from.
Today, customisation, client experience and ease of use are the qualities valued across the demographic cohorts.
We should not settle for the standard design, instead creating the Rolls-Royce of solutions that is designed specifically for each client. And with today’s technology making it possible, why not?
Hannes Viljoen is a senior manager in the advisory team at Alexander Forbes Investments.
This article originally appeared in the October 2017 edition of Collective Insight, which appears in the 19 October edition of finweek. Buy and download the magazine here.