SCM Private believes investors hungry for a spot of digital DIY

Much of the recent focus at SCM Private, a £100m (€125m) wealth management firm set up by marketing specialist Gina Miller and her hedge fund managing husband Alan in 2009, has centred around improving the interaction between clients and advisers.

Their theory was that this was the perfect time to launch a new digital experience, enabling more of a DIY approach to managing assets for both mass affluent and high net worth segments.

Although the firm had been looking at launching a platform for the last two years, they decided to hold back until new UK regulations were in place, once straightforward investments such as exchange traded funds had become acceptable to the public and once the required technology was available.

The final part of the equation recently fell into place with the development of a specialised wealth management solution from French custody house SociétéGénérale Securities Services, which helped SCM build its three-stranded initiative.

The ‘scmdirect’ web platform was designed specifically for 25-45 year-old professionals, ‘moneyshe’ aimed at female investors and ‘scm50’ targets the over-50 age group.

Yet just three weeks after launch, the sites have gone back into their testing phase. “It’s very difficult to launch something and test it fully without having real life investors on board,” says Ms Miller, who has caused a stir in the UK’s complacent industry through her repeated criticism of established firms and their practices.

“People typically say: ‘What does she know about finance? She is just a former hedge fund manager’s wife,’” smiles Ms Miller, who was involved in launching BMW’s car fleet in the UK, before switching to marketing financial services at Legal & General, Scottish Widows and New Star, where she met her husband to be, then the star manager under colourful boss John Duffield.

But having recently entered her 50s, Ms Miller feels she is perfectly placed to pave the way for engaging both older and women investors in managing their family’s assets more effectively and cheaply.

“The perceived wisdom is that you take less risk once you turn 50, but with many people now living into their 80s and 90s, this has changed,” says the Guyanese-born campaigner for lower and fairer charges for investors. “At 50 you now need to take on equities. This goes against the normal train of financial thought.”

This older age-group wants straight, no-nonsense communications, with “videos not going down well,” believes Ms Miller, and engages with their providers logically, coolly and without excessive emotions.

Her research and conversations with prospective clients however revealed many women are more reluctant to become involved in financial planning. “There is no lack of knowledge there, but a nervousness and lack of confidence.”

Women, says Ms Miller, navigate wealth managers’ websites in a totally different way to male counterparts, having a more sceptical approach to fee schedules and simulators of investment returns. “Their main question is who you are as a company and why you are doing this. Basically, there is a lack of trust. They are not trusting the industry or the investments they are recommended.”

Security has also been a massive issue, particularly with more stringent know-your-customer and anti-money laundering regulations, which meant balancing the number of questions with practicalities of customer patience. “You ask yourself how many questions people put up with before they go away,” says Ms Miller. “We set the barrier quite high, so quite a few leave before completing.”

That said, she has been pleasantly surprised at the amount of time wealthy and older investors are prepared to spend online. “There is an industry perception that people with a lot of money want to do things face to face, yet our average size of investor has £200,000, which is way higher than we thought,” says Ms Miller, revealing that her clients typically spend 11 minutes on the site.

“This is because they are sophisticated, not new investors. They understand and have experienced traditional systems and have been unhappy with what they have seen.”

One of the main reasons she sent the prototype sites back for testing was that some investors found they contained too much information to wade through. “Our challenge was to be able to cater for both the sophisticated and naïve investor,” says Ms Miller. “The answer is layering, so you can go deeper. Our mistake was to show too much info upfront for new investors, so they were blinded by science.”

A five-strong team is on hand to answer queries about markets and transfers. “You can be incredibly efficient with this,” she says. “You get similar questions from everyone, so we are banking them.”

But there was also a conscious decision not to encroach too far on customers’ privacy. “One of the tech firms we met told us they could follow a client after they had left the site and then ask them online exactly why had they left. This felt quite intrusive and a bit spooky. I would not want someone sending me an email asking ‘why have you just left our page?’”