Why Retail Brokers Don’t Convert Clients On Mobile - Black Swan

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Why Retail Brokers Don’t Convert Clients On Mobile

January 13, 2016

By Consulting Group

While working on Broker Compare, our tool that allows retail investors to choose the best value Stocks and Shares ISA, we started thinking about the role of mobile in this sector.

Broker Compare includes 19 of the UK’s biggest online brokers/platforms and is mobile optimised. So far so good, but only three of the 19 have mobile-optimised account opening.

Why is this? An excuse I heard once from someone in the FX / CFD sector was that ‘no-one opens their account on their phone’, but they were wrong.  Application processes need to be  mobile-optimised.  The gambling sector is being transformed by mobile – in 2014 William Hill reported a 298% increase in mobile betting revenues.’1

It is amazing that the majority of existing brokers/platforms are not addressing this and still don’t look at the behavior of other sectors and a minority of their users to determine how their future customers will behave.

Given this, what kind of reasons apart from budget and resource do we expect to hear from brokers / platforms for their lack of mobile optimised account opening?

Excuse Counter
There is too much info to fill in on a mobile. Well designed forms can easily address this. See Natwest mortgage application (on mobile).
I need to be verified by sending scans of my ID and utility bill. For millennials scanners are irrelevant. Photos of a DL, Passport, bill, even a selfie (location tagged) can be done on a smartphone. See Revolut.
Terms and conditions are too long to read on a mobile. Ts and Cs are too long on PC and mobile, full stop. They should be summarised, but available to review and emailed in both forms and clearly available when it comes to trading.
Why would anyone trade long-term investments on their mobile? The Hargreaves Lansdown app has been downloaded over 400,000 times with 7.9% of share deals completed via the platform in 2015.2
None of our competitors do it. Someone has got to be first. Just look at the effort Atom Bank goes to to collect info pre launch.

 

The reality is that mobile is here to stay and users will continue to do more and more on their phones – a friend recently celebrated the fact that they had applied for, and received, a mortgage offer on their iPhone 5.  This makes the broker platform situation even more frustrating.  Last year Facebook reported 72% year on year growth in mobile advertising.  Now if ad revenue is growing at that rate, but only 15% of equity brokers we looked at have any means of mobile account opening, how are they going to even begin to reach the mobile audience?

Given the situation, where does this leave the sector? It leaves it vulnerable to being upstaged by retail finance companies diversifying into the broker sector including the algo-investing and robo advice companies and the new discount brokers all of which are desperate to build their assets under management through multiple channels.

This is not meant as a criticism of the existing PC (and in some instances tablet) based services offered by leading providers to the existing customers, it is making the point that the penetration of share ownership will remain stubbornly low if providers don’t adapt to attract new audiences.

This spring, when the UK government sells £2billion of Lloyds Bank shares, why can’t all those millennials with an extensively publicised, government-backed excuse to start their investing careers, go to a mobile optimised comparison tool, sign up on their smartphone and invest? It should not be too much of an ask given that latest research shows that the average user checks their phone over 85 times a day…

The table below demonstrates how rare mobile account opening processes are for stockbroking platforms:

 Provider  Mobile Optimised Site  Mobile Account Opening
AJ Bell
Alliance Trust
AXA
Bank of Scotland
Barclays
BestInvest
Charles Stanley
Fidelity
Halifax
Hargreaves
HSBC
IG
II
iWeb
Selftrade
SVS
Telegraph
TD Direct
Share Centre

 

Black Swan Partners is a retail finance consultancy that specialises in product development, market analysis, pricing and social functionality. For a free consultation please contact us at info@blackswanpartners.co.uk

1http://www.stickyeyes.com/2015/02/18/gambling-report-reveals-big-opportunities-in-app-store-optimisation/
2 file:///C:/Users/PC%2011/Downloads/2015-Report-and-Financial-Statements.pdf

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