Re-Imagining the Investing Experience

Insights from Day 2 of Online Broker Summit

October 20, 2020

Challenger Panel: Re-Imagining the Investing Experience:

Self-directed investors opened new accounts at a record pace, which enhanced the volatility of the initial Covid-19 crash and generated historically high trading volumes.  Investopedia’s anxiety index told the story of the high anxiety experienced amongst investors. This rapidly expanding market is bringing in new personas, and brokers are taking up the challenge and making new bets on how to best meet the opportunity. They’re adapting fast to capture a share of this new attention and to retain new accounts as life-long customers. Let’s see how incumbent brokers and new “challenger” firms alike are putting value propositions on the table for consumers to choose from.

The panel was moderated by Theresa Carey, Brokerage and Investing Expert at Investopedia, and included:

Let’s start with two long-established brands.

Merrill Edge - Heather Teschner is a digital channel consultant working on user experiencefor the platform’s newer, most innovative products including Stock Story, Portfolio Story andDynamic Insights. The bedrock of those projects was adopting a new way of thinking. Theysought to take complex topics you can find now on just about any broker site and removethe jargon, summarizing the facts up front. Their vision was centred around the clarity ofan “RXBAR” that communicates concisely "what's inside". Compliance was one of thebiggest challenges internally. They addressed this by reiterating that all steps are tobenefit the client; the goal of simplifying the language is not to hide information but ratherto allow them to consume data in a way they’ll understand. Heather asked theircompliance team to review with this lens, and was ready to adapt as needed.

Vanguard - Larry Focht is head of product management for the Vanguard Digital Advisor,targeted to a younger audience. The new service is meant to complement their hybridrobo advice service, Personal Advisor Services, but targeted at a slightly differentdemographic. PAS is highly adopted by the pre-retiree and retiree segments. They knewthey could do more given their mission is to deliver low cost, high quality advice to themasses. Inside a massive firm with a legacy name, Larry set up a go-team untetheredfrom normal processes and rolling a new technology stack. They incubated this smallteam with very few layers of management. A success factor was establishing the rightconnection to the senior constituency, not only to provide oversight but also delivering thesenior level buy-in that made it possible. Vanguard Digital Advisor used a lot of data andinsights to fuel what it looks like. It’s very much in its infancy and they’re tuning to datainsights they receive on a daily basis.

Now let’s review two firms building from scratch

Stash - Dale Sperling is CMO at STASH, founded in 2015 to help people grow wealth throughfractional share investing and saving. They tie these together with a Stock-Back debit cardprogram that leads people into investing through their own buying behaviour. 80% arebeginners and even though STASH brings them on in an easy seamless way, withautomation tools to encourage people to contribute on a regular basis; people are stillstuck when it comes to what to do, what to invest in, even if it's a dollar. More recently,STASH is taking a stronger approach to advice and guidance, with a new PortfolioDiversification Score encouraging clients to diversify in more asset types. The stock aclient has in mind might not be the best suited, so go ahead and buy what you'reinterested in but then let us educate you on what it means to diversify your portfolio, tellthem where they're over-indexed and also make specific recommendations so that theycan balance out their portfolio. We’re spoon feeding education in a relevant, fun,lighthearted way.

dough - Victor Jones is CEO of dough launched in 2018. He’s on a mission to offer people anactive financial lifestyle. Victor is not a proponent of passive involvement in managingone's wealth, saying that if people are capable enough to earn an income, they arecapable enough of managing it. While many firms are “simplifying”, dough believesthat people are starved for intellectual challenges. dough is out to make people think; togive people a place to express and explore their financial curiosities. They represent thisfrom the inside out, for example, with a 3-hour live podcast aimed to help peopleunderstand options. People are interested in these vehicles, they need partners inunderstanding them, understanding how to position for risk; not just to regurgitate aheadline and remove jargon, but to have a long-form conversation to understand strategyand apply it with critical thinking. People like to see decision making in real time so they cancompare their decision making. dough puts risk and opportunity in context for people,setting up a long-lasting relationship which is centred on this deeper understanding.

Finally, let’s hear from the space that’s unbundling online brokerage from the investingexperience.

Tradier - Dan Raju is CEO of Trader, the “brokerage as an API'' that powers 200+ trading andinvesting applications, making them one of the larger aggregators of volume in the market.Tradier also provides a marketplace for all these platforms for people to choose, drivingvalue to the market. This situation offers a unique perspective of traders, with data on whatthey choose, and how they travel through the journey from new to experienced. Unpackingthe power of investing out of the typical vertical package of an online broker, allowsinvestors to bundle and create their own experience using Tradier’s ecosystem to help. Danexplains that traders are hyper-alert right now, spending more time on the platforms. Andfrom his unique vantage point, the data shows that for people who trade 10x per month,you are never going to deliver all the capabilities to them. The more active they get, themore diversified they get in what they use; so you are better off embracing and allowingthem to use other platforms too.

How interesting to explore the diverse responses to an expanding market for self-directedinvesting. Whatever path you choose, Trading Central can show you how our solutions canallow you to get there sooner to take advantage of the ripe opportunities to engage, andwith a new cost-effectiveness that’s essential in this industry climate.

Moving faster with Trading Central embeddable apps and APIs

A challenge firms face is to pursue a grander vision while delivering wins for the businessand for its customers in the short term. Partnering is a great way to achieve this, and it's whywe provide a powerful combination of embeddable apps and APIs. In her presentation,Kathryn reviewed a case where we used such methods with our newly re-launchedStrategy Builder product and stock ranking API, to increase adoption of screening tools farbeyond expectations of what would be inherently possible.

Our embeddable apps integrate seamlessly like a chameleon into your responsivewebsites and mobile web containers while meeting your accessibility requirements. Thishelps you to instantly deliver the rich, layered experiences that address an expandingmarket of investors. We offer pillars in technical and fundamental analysis, news sentimentanalytics and economic insight as well as cross-suite services ranging from ranking andscreening, topical themes and portfolio-driven insights. Compact visual insights provideimmediate meaning, yet flow through to rich transparent data as and when eachindividual is ready for it.

Once you have the embeddable app launched, now it's time to differentiate. Our APIs andcomponents allow you to place high impact insights into the moments that matter toinvestors, whether it's looking up a stock or reviewing their account holdings. Capturinginvestors in these important moments with not only an offer of a tool but rather a usefuldata insight like TC Scores, is an effective way to surface the great research and toolsavailable to help them succeed, now much more proactively along their pathway.

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Insights from the

Online Broker Summit 2020



October 20, 2020

Larry Focht

Head of Product Management

Dale Sperling

Chief Marketing Officer

Dan Raju

Founder, Chairman & CEO at Tradier

Heather Teschner

VP Senior Digital Manager
Bank of America Merrill Lynch

Victor Jones


Theresa Carey

Brokerage and Investing Expert