Addressing financial skepticism at TD Ameritrade

Personal investing is on the decline.

Investors are increasingly dispassionate, less engaged and less participatory in their investing activities. The shared mental model across a number of different audience types is one of skepticism.

This is should come as no surprise. The crash of 2008 brought on by the financial industry’s own hubris and greed has left a vast majority of people skeptical of the stock market. Many individuals don’t trust financial brokers, financial advisors or the industry to do what is best for retail clients. 

Millennials display a lack of knowledge and overall trust in the market. Gen-Xers (my peeps) also have a lack of investing knowledge and need the money for family related aspects of life, such as schooling. Boomers have money to invest, but remain conservative as they are gun shy over lost assets during the ’08 crash. 

Brokerage firms are feeling this shift and are concerned. They need the public to understand that investing in the market is the better alternative to sitting on the sidelines. They want to address our skepticism and provide an alternate impression about the market. They want us to reverse sentiments that the market is rigged against us. Restoring trust is a big ask. It takes time and long-term consistency. No one wants to be a sucker for the professionals.

And yet, there is an inherent conflict at play. People are investing less, but are more confused than ever on what course of action to take. After all, putting your money in a savings account isn't even "saving" when the inflation rate is higher than interest rates.

Quote – "60% of baby boomers are more afraid of running out of money, than of dying."

This is a startling statistic and one that is driving brokerages like TD Ameritrade to better understand how they can educate, engage and partner with retail investors. Essential, how can they help people feel safe to invest again?

In May of this year, I spent three days thinking over this situation for TD Ameritrade. It was an interesting time and one that closely resembled the work I had done for Charles Schwab, a few years earlier. I collaborated with a group of twelve other professionals from marketing, behavioral science and digital strategy. We were joined by ten members of the public who represent the various audience types TD Ameritrade hopes to persuade. The entire workshop was orchestrated and facilitated by Eric Bruno, Paul Taylor, Brad Robertson and Gary Hirsch. They did a bang up job of managing so many people; keeping them engaged and creative.

We entered into a series of workshop activities using improv comedy techniques of colliding non-related ideas to find unexpected areas of opportunity. All of this was conducted for the purpose of generating and prioritizing a set of concepts that TD Ameritrade would test with consumers. 

At its core, any execution must build TRUST with current and future customers. Without building and restoring trust –which directly confronts skepticism– no idea will gain traction to become a robust program that leads to more individual stock market investors.

Themes

Some general themes that emerged: 

• Transparency - people want all the details and to know there aren’t hidden fees or legalese that scams them.
• Empathy (know me) - people want to be understood. Their goals, their challenges, their dreams… all of these are critical stories that must be communicated and heard. If an advisor is to be a partner, s/he will listen and reflect back how an individual’s situation shapes a portfolio recommendation.
• Mentorship - people want to learn from those who have more experience than them. 
• Education - a valid approach to decreasing skepticism it to learn. Humans must comprehend the basics in order to feel a sense of confidence in our decision making process.

Investment Notes

Some random investment ideas are worth listing here as they are great reminders for myself and me be for you too:

• Successful investing begins with a plan. As obvious as that sounds, it is often overlooked. Investing to achieve personal goals requires thought and discussion.
• The market and trading doesn't have to be difficult. Trade what you know.
• Professionals trade iteratively. Successful investing in "partials."
• Start slow and make it easy. Limit your universe.
• Personal exercise: What would my future self tell me about money and life?

Links

Here are a few "FinTech” products and concepts discussed over the 3-day workshop:

• Fintech definition -https://www.forbes.com/sites/bernardmarr/2017/02/10/a-complete-beginners-guide-to-fintech-in-2017/#184920463340
• Robinhood - “free” trading platform that has the mission to democratize the American financial system, https://www.robinhood.com
• Betterment - tech and human advisor services, https://www.betterment.com
• Wealthfront - automated financial planning and investing, https://www.wealthfront.com
• Acorns - invests spare change, https://www.acorns.com
• Stash - small amounts automatically pulled for investing in stocks that you believe in, https://www.stashinvest.com
• Tradewise - a TD Ameritrade product, https://www.tradewise.com
• Clarity Money - like Intuit’s Mint product… helps you take control of your finances by cancelling wasteful accounts, lowering your bills, getting you better deals and managing your financial life Claritymoney.com