When I considered investing in MF I did my due diligence and although I work in asset management myself, it was difficult to wrap my head around the MF proposition. I took @tom_mf more than two hours of face-to-face time to both convince and educate me.
Now we are going mass market with the £10 portfolio, we need to think about how we tell the MF story as at this moment in time I feel that it’s too complex, too much jargon and not easily understood how it differentiates itself.
I have seen lots of research that tells me that when it comes to investing, people are very nervous. And although they feel underserved by the blue chip companies and that they don’t get value for money from them, they still prefer to put their hard earned money with an established and reputable brand over a FinTech. The question they ask themselves is: “Is my money more safe with a company that has been around 200 years, or an unknown quantity that for all I know may be run by two guys from a shed?”
FSCS protection helps, but most people have not heard of it or don’t understand it. We need to consider how we can overcome this initial trust hurdle. Simple, jargon-free plain English helps, as does evidence around performance, as does a certain degree of AUM.
We also need to think how we can clearly articulate how we differentiate from other offerings.
ETFs are growing and attractive, but mostly beta focussed with low-cost, but very passively managed.
CFDs are more like gambling, and the fast majority of people lose money on it.
DIY stock brokerage is growing, but takes time to make it work and even then most people can’t outperform the market.
Actively managed funds seek alpha returns, but have high charges and only available to high network individuals.
Micro-investing like MoneyBox is simple, but performance typically isn’t great as charges are comparatively high and rather erosive.
Robo-advice isn’t really either - it’s neither automated as it has lots of human interventions and neither advice, as typically you get an ETF based on your risk score.
MF is a mix of the best of all the above, minus CFDs but with options thrown in - but that’s bloody difficult to get the head around for a lay person. I am trying to almost get to a strap line for MF that summarises it, but the best I can get to is:
“Alpha returns on autopilot”
It’s short and sweet, but has too much jargon and doesn’t reference comparatively low cost.