Hyper Investor Vs Steady Investor. The race is on.

Everyone knows that you need to stick to your investment plan. But people often switch due to extraneous factors thus losing out on the ability to create wealth in the long term.
To highlight the various factors that entice people to switch and educate them on the need to "Buy Right & Sit Tight", Motilal Oswal Financial Services has come out with an innovative digital film. Mirroring the arcade car racing game, it demonstrates how a Hyper Investor may get tempted to switch lanes due to various factors and which makes him lose out to a steady investor in the long term. In essence communicating that too much portfolio switching is injurious to your wealth

Do have a look at the DVC/TVC

And the Digital Amplification

As well as some ambient media

"V" for Volatility

VUCA World

We live in a VUCA world. And as you know, VUCA starts with Volatility. There is no industry where volatility is as transparent as the stock markets. With stock prices changing tick by tick, you can monitor the ups and downs of your portfolio every second. Access to technology via stock market apps and 24x7 media/social media news has made this even easier in recent years. This volatility leads to increasing investor restlessness. Who wouldn’t be restless when you see your hard earned money going up and down second by second? It’s only a matter of time before smart-watch based stock market apps synch your portfolio with your heart rate monitor!

While volatility has always been a part of investing, in the recent years this has shown an increase With the euphoria of market performance in CY2017 followed by the see-saw conditions in CY2018 and while not apparent in the Sensex performance (at all-time highs; but driven by only 4-5 stocks), the broader markets in CY19 have seen peoples portfolios getting hammered . This market volatility can be seen in the increasing Volatility Index.

Source: NSE Website

Brand Challenge

Increasing volatility has led to increasing challenges for financial services. It is a known fact that while investments maybe a rationale decision (based on company earnings, performance, track record etc); investor behaviour is emotional. Infact, investing is based on two key emotions – Greed and Fear. The ability to not be swayed by euphoria or not deviate from your investment strategy during transient underperformance is what distinguishes a successful investor. Like advertising, investing too is based on emotions. These emotions oscillate daily during times of volatility. Typical brand planning requires a consistent message communicated over time. A level of brand consistency builds brand trust. Managing volatile investor expectations/emotions while providing a relevant message is what would make brands stand apart. But how do brands stay relevant in terms of volatile times without sounding schizerophreniac?

How can brands survive and thrive in volatility?

To start with, brands must realise that the stock market is like a cardiogram. It has its ups and downs. If it becomes flat; it dies. So rather than get intimidated by volatility, financial brands need to embrace it. In financial services, this can be done by addressing needs of different customers by their investment horizon and state of evolution as investors.

Customers can be segmented by:

1.       Investment Horizon: Just as some people prefer watching a slow and steady Test match while others prefer watching dhana-dhan 20-20, there exist Long Term Investors and short term Intraday/Positional Traders. Needs of these two segments differ in terms of expectations, risk appetite as well as products

2.       Need for advice: Based on how evolved they are and the level of control they want, there are some investors  who completely delegate their investing decisions (Delegators) while some who may need advice but take their own investing decisions (Validators) . There also exist a set of completely DIY ( Self Directed)

Different products and education campaigns need to be created for each of these mind-states, given volatile conditions. For example, in times of volatility, a long term Investor who has delegated his money to a mutual fund needs to be educated on the need to Buy Right and Sit Tight. While a Self Directed Trader whose complete capital can vanish with a volatile trade needs to be educated on the necessity to keep a Stop Loss.

From a communication point of view; brands need to adapt an agile approach by creating a mix of focused/topical messaging for various market conditions. As these messages would change frequently they need to be held together with a distinctive brand personality and brand idea. Quite like the different verses of a song held together with a common hook/chorus.

Over a period of time, topical brand messaging with a distinct brand look and feel under a master brand idea not only builds relevant communication, it also differentiates.

This approach is what we have followed through our various communication messaging for Motilal Oswal over the past 3 years. We have adopted a master brand proposition of an “Equity Investing Expert” and come out with focused and topical messaging that is relevant to a particular time in a volatile market. The common brand line (Think Equity Think Motilal Oswal) and distinct brand personality has been maintained across various market conditions.

For eg. when markets are buoyant, everyone was looking to invest in equity (either through stocks or equity mutual funds/PMS). The brand messaging hence revolved around the fact that incase you are thinking of investing in equity, invest through the experts who have only been focused on equity for over 30 years. (See campaign here)

When markets turned volatile, the messaging changed to the fact that volatility can unseat most people. You need an equity expert to pick the right stocks and have the discipline to hold onto them i.e Buy Right. Sit Tight. (See campaign here)

When markets underperform and investors lose money due to investing in penny stocks, we created a campaign on the need for investing in Quality businesses/stocks as those are the ones that create wealth over the long term.( See campaign here)

Even for different customer types (Investor / Trader), we created different mobile apps to give them a customised experience based on whether they were Delegators/ Validators/Self Directed (See ad Here )

While advertising creates the brand messaging at an overall level, we also continuously come out with thematic studies based on the market conditions (See Wealth Creation Studies Here )

Even though the messages seem disparate, each communication provides the investor with relevant and topical equity messaging. A common brand personality and executional elements ( music, use of experts in their fields, , tag line etc) has been used to provide brand consistency. We have also consciously stayed away from clichéd BFSI category imagery (happy family, dream fulfilment etc) for differentiation and executional cut through

In summation, Equity penetration in India is less than 5%. As penetration increases, there would be a new set of customers with little experience in terms of handling market volatility . With  Volatility here to stay, brands that provide customers with the knowledge and education to not just survive but thrive in volatility (rather than be intimidated by it) are those that would succeed over a period of time.

EASY. ECONOMICAL. EFFECTIVE

10 years back when Motilal Oswal Asset Management first launched its passive funds under the MOSt Shares ETF platform  (https://bcwithrc.blogspot.com/2010/07/nifty-re-mixed-not-your-run-of-mill-nfo.html) , it garnered a fair share of buzz. However, actual investor adoption was low.. That's because there was little or no understanding of Index Investing. Also, investors at that point of time depended solely on their advisors to suggest products to invest in. Advisors were more keen to suggest active funds given the alpha they were able to generate.

In the past 10 years there has been a change. A new investing class of new/first time DIY investors using digital platforms to invest in direct plans has emerged. While they may want to invest themselves, they still have a long way to go in terms of being able to identify the right stocks/funds. That's where Index Funds come in. They are a simple way of investing in the equity markets as they involve no stock/fund selection, are cheaper to buy and index typically provides good returns in the long term.

Index Funds have been gaining increasing acceptance among investors. In the first 8 months of FY 2019 /20; passive funds account for over half of equity fund flows   https://epaper.timesgroup.com/Olive/ODN/TheEconomicTimes/#

However awareness of Index Investing and its benefits is still low.

As an equity investing expert MOAMC was one of the first to introduce this product class. As an expert it is also one of the first to come out with a campaign educating on the product class and its generic benefits to a DIY investor.

The campaign is primarily digital educating investors on the 3 core benefits of Index Investing as the building blocks of their equity portfolio

1. Ease : If you don't know what to buy you can buy the whole market as Index Funds invest in the whole Index
2. Economy : Since Index Funds do not have an active fund manager, costs are lesser 
3. Effective : Over the long term, the stock market index is known to create wealth