RETHINKING DISTRIBUTION

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Scenario Planning e-Investors

Figure 18

Informed Investors

‘Crowd’ Investors

Advisers will be able to regain investors’trust and the loyalty of the investors will remain high. However, investors will also use and leverage on social media and technological change to collect information which will impact their choice of products and relationship with financial advisers and distributors.

Investors rely largely on the opinions of many strangers via social media networks or business models to take their investment decisions and are not committed to a specific financial adviser or distributor brand.

Use of Social Media High Low

Independent Investors

Business as usual

The growth of social media does not have an effect on the decision-making of the majority of investors, and these investors repeat the behaviour which has been traditionally seen in the market and remain loyal towards their advisers and distributors.

Although these investors will access information from a variety of areas, they will ultimately rely on their own personal judgement for their investment decision and will not be influenced by brands or social media.

Loyalty towards financial adviser and distributor

Low

High

The growth of social media from a leisure activity to a serious marketing and information sharing medium may have a potentially serious impact on the relationship between individual investors and their financial intermediaries. Avid social media followers are more likely to respond to information, messages, advice and ‘tips’ received through their online interaction than to engage a paid professional – essentially becoming a ‘crowd’ investor, or an investor

influenced by the opinions of many others with whom they have no personal relationship. Alternatively, they may simply gather information to challenge their professional adviser(s), necessitating a more informed client relationship. The axes represent loyalty to adviser versus importance of social media, where we attempt to chart the likely outcome of this juxtaposition of established relationships and new communication forms and norms (see figure 18).

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