An Education Called Personal Finance
Is The Financial Services Industry Really In The Business of Creating an Educated Clientele?
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When there are multiple solutions to a problem, choose the simplest one — John C. Bogle, The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)
Technology is forcing a reinvention of financial services in more ways than one. Gone are the days when a bank could sell a single product to a client and forget about it. These days, it all about clients that hold long term, meaningful and multiple relationships. Often, the route to develop meaningful relationships is to empower clients to make choices on their own. That is why — the world of financial services today has to become the modern day version of a ‘guru’ or a teacher that educates, empowers and then lets clients decide what’s in their best interest. This article envisions a future where the success of the financial services industry will lie in creating a new breed of educated clients. That education will primarily consist of teaching clients to declutter their financial lives and to choose the best options that work for them.
Finance As A Service
If you have ever used investing apps such as Robinhood or Titan, you cannot help but notice the focus on education. Customized newsfeeds based on your stock holdings, explanation of investing philosophy, investing 101 are all table stakes now. The idea is a very simple one: inspire brand loyalty by creating an educated client base. A client base that can make more meaningful and informed choices while saving on transaction costs such as brokerage fees. This incredible level of customization and client education is possible because of the advent of technology. FinTech providers without a brick and mortar base have a very low marginal cost of servicing the client even after the client has terminated his or her relationship with that provider.
