RETHINKING DISTRIBUTION

“ We are told that RDR is the next big thing we need to be thinking about, but I think it pales in significance compared to the impact social media will have on our industry.”

• Will newmedia and newgenerations of investors and advisers behave in the same way as previously or will they adopt new behaviour? • Canwe expect tomorrow’s consumers of financial products to place as much trust in personal relationships and one-to-one advice as before, or will they become more remote and data guided in their investment decisions? • Will a pervasive internet coupled with the explosion of social media and new norms of communication have a significant effect on the client and adviser relationship? • Will the new applications and channels afford real competitive advantage to savvy firms, or can we expect to see limited innovation in terms of client relationship management?

Phil Calvert, IFA Life - The Social Network of IFAs and Financial Planners

Targeting a new generation of customers

Investors still favour their distributors and advisers to access investment products, although they are likely to use many channels to access both advice and products. In the future these prime relationships could be challenged by the new generation of students and young professionals, who may be more financially literate.

Figure 13

Share of social networking users, % (2010)

46%

US UK SouthKorea France Spain Germany Turkey

43%

40% 40% 36%

Looking forward: IS the emergence of new technology likely to disrupt the current distribution channels?

34%

31%

26%

24%

Japan China India

The status of social media is steadily evolving from a leisure activity to a strategic marketing tool for the industry. What will the future role of social media be within financial services?

23%

12%

0%

10%

20%

30%

40%

50%

Source : Pew, 2010

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