“We talked to 100 people, and we heard the same thing over and over again: the whole concept of investing was confusing, it was expensive, it was unrelatable, it isn’t my world,”
This is not consumption preferences. This is needing to do something you have no idea about—so you go to whoever claims to be an expert and you believe whatever he tells you. There are many people claiming to be experts, so it becomes crucial to use the right marketing to lure in the marks… err. customers. The old marketing style which mostly used a reliable-looking oldish white guy in a suit and a tie isn’t working all that well any more, so there is a new marketing style that goes for young and hip and cool and all that.
I still don’t believe that people consume and particularly enjoy investment offerings. Giving money to a mutual fund just isn’t a notable sensuous experience :-D
What I do believe is that it is very much in the interest of certain people to make you convinced that giving them money has special significance.
I think it’s important to note here that their fee is $12 a year. That’s a lot more in line with “paying for a good experience” than “paying for investment advice”. I don’t think this $12 a year product falls into the same reference class as typical financial advisors.
I think it’s important to note here that their fee is $12 a year.
I don’t see how this is a meaningful number. The cost to the user is much higher since they’re now stuck in a high-fee fund. And I’m pretty sure that a lot of Stash’s revenue comes from something other than $12/user/year. In particular, high-fee funds tend to pay commissions to those who sell them.
I think a much better analogy would have been “drink tap water instead of bottled water.” It’s a more similar instance of paying explicitly for branding with a misguided understanding of what’s for sale. (i.e. most bottle water is literally tap water)
I think a much better analogy would have been “drink tap water instead of bottled water.”
I drink bottled water. I don’t care about branding in general, but the particular water which I drink tastes different from the water in my tap and I can easily recognize the difference.
I think the key word here is “marketing”.
This is not consumption preferences. This is needing to do something you have no idea about—so you go to whoever claims to be an expert and you believe whatever he tells you. There are many people claiming to be experts, so it becomes crucial to use the right marketing to lure in the marks… err. customers. The old marketing style which mostly used a reliable-looking oldish white guy in a suit and a tie isn’t working all that well any more, so there is a new marketing style that goes for young and hip and cool and all that.
I still don’t believe that people consume and particularly enjoy investment offerings. Giving money to a mutual fund just isn’t a notable sensuous experience :-D
What I do believe is that it is very much in the interest of certain people to make you convinced that giving them money has special significance.
I think it’s important to note here that their fee is $12 a year. That’s a lot more in line with “paying for a good experience” than “paying for investment advice”. I don’t think this $12 a year product falls into the same reference class as typical financial advisors.
I don’t see how this is a meaningful number. The cost to the user is much higher since they’re now stuck in a high-fee fund. And I’m pretty sure that a lot of Stash’s revenue comes from something other than $12/user/year. In particular, high-fee funds tend to pay commissions to those who sell them.
I think a much better analogy would have been “drink tap water instead of bottled water.” It’s a more similar instance of paying explicitly for branding with a misguided understanding of what’s for sale. (i.e. most bottle water is literally tap water)
I drink bottled water. I don’t care about branding in general, but the particular water which I drink tastes different from the water in my tap and I can easily recognize the difference.