STRATEGIC DESIGN MBA
CLIENT REPORT October 17, 2016
Special Thanks to‌ ...Avery Williamson, Client Experience Group, Product Owner: for her generosity and patience in answering our endless questions. ...Lea Munjone, Design Manager: for her time and flexibility in organizing meetings and setting up external discipline calls. ...Jessica Powers, Marketing Manager: for her support and insights. ...Professors Natalie W. Nixon, PhD, and Valerie Jacobs: for their guidance, and push to constantly go deeper. ...Our classmates in Cohort 4, SDMBA Class of 2017: for their insights, feedback and support in everything from design thoughts to technical assistance in our presentations.
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Table of Contents ABOUT PHILADELPHIA UNIVERSITY’S STRATEGIC DESIGN MBA PROGRAM ..Error! Bookmark not defined. ABOUT THE PROJECT TEAM....................................Error! Bookmark not defined. SUMMARY OF KEY FINDINGS...................................Error! Bookmark not defined. KEY FINDINGS .........................................................Error! Bookmark not defined. INTRODUCTION ..........................................................Error! Bookmark not defined. KEY TRENDS...............................................................Error! Bookmark not defined. Social Sharing .........................................................Error! Bookmark not defined. The Gig Economy ....................................................Error! Bookmark not defined. Technology Touch Points ......................................Error! Bookmark not defined. New Customer Segments .......................................Error! Bookmark not defined. SETTING SAIL .............................................................Error! Bookmark not defined. SKIPPER & THE CAPTAIN .........................................Error! Bookmark not defined. LAND HO! ....................................................................Error! Bookmark not defined. SUMMARY ...................................................................Error! Bookmark not defined. REFERENCES CONSULTED ......................................Error! Bookmark not defined. APPENDIX ...................................................................Error! Bookmark not defined.
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About Philadelphia University’s Strategic Design MBA Program The Strategic Design MBA combines the best of business school with the best of design thinking to prepare graduates to better solve problems in today’s volatile, uncertain, complex and ambiguous business world. At Philadelphia University, design thinking is already a major tenet in our graduate and undergraduate curricula. The main features of the Strategic Design MBA build on our existing framework of industry inspired collaborative learning and are tailored for accomplished professionals looking to enhance their skills. Business thinkers have been trained to approach every challenge by asking, “What is the solution?” Design thinkers have been trained to ask, “What is the problem?” Hybrid thinkers ask both, and in the process ask and answer, “What is the opportunity?” This MBA is a low-residency program with intensive industry application. It features a cohort of seasoned professionals from diverse industries and faculty who blend state-of-the art practitioner experience with excellence in the classroom. Graduates exit the program with a network in place that is capable of bringing long-term value to themselves and their organizations that extends well beyond the formal material covered. This Project was the focus of Style and Brand Strategy, Course Six in the SDMBA curriculum. In this course students learn to interpret the fundamentals of brand strategy as a tool for strategic execution and as a builder of reliable metrics for profitability. Style, a component of branding, will be analyzed as a competitive differentiator and contributor to firm's’ value propositions. Students will explore how brand development is built over time, assessing multiple touch points and identifying the fiscal value of brand investment. Students will
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learn a brand strategy methodology that incorporates style, and culminate with a brand audit project.
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ABOUT THE PROJECT TEAM Nate Davis-Olds is a Lead Software Engineer at Benefits Data Trust and lives in Philadelphia, PA. “In life, I shift roles all the time. I am a neighbor and a landlord. I play chess and swing dance. I juggle and beat box. I program and design. Often, one role enhances another. Similarly, the SDMBA program enhances business with design, suiting me perfectly (plus, it has whiteboards).”
Jennifer McLennan is Director of Design at Marriott International and lives in Boyds, MD. “I am interested in the mindset of design thinking and how it can solve real issues. The SDMBA will permit me the ability to put this mindset to practice as it relates to the world of business strategy, design, and social innovation. It's exciting to apply what I am learning directly back to my role and push the limits on creativity, innovation and product/service development.”
Kafi Waters is a Technology and Business Solutions Project Manager at AARP Foundation and lives in Washington, DC. “I chose the SDMBA to learn more about design thinking and business strategy, with a cohort of like-minded hybrid thinkers. As a teenager, I sold my first piece of artwork the night before a gallery opening. Nowadays I take photos of my husband, dog and cat and enjoy exploring local wineries.”
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Summary of Key Findings Vanguard was founded in 1975 around one man’s innovative vision. Mr. John C. Bogle started the company with the sole purpose of bringing diversified investments with limited risk and reduced fees. This challenged the accepted practices of active management investing. The greatest minds in investing declared index funds to be a fad; it would never last they believed. But Bogle’s index fund wasn’t for the traditional investor; instead it was for average people. As people invested with the index fund, this new concept didn’t retire from the industry as predicted; rather, it reshaped it. Over that last 40 years Vanguard has experienced phenomenal growth within the industry. As Bogle organized the Vanguard Group, he carried over the philosophy behind his index fund and established guiding principles that remain today. Avery Williamson, Creative Strategist, maintains that the “company culture built off of these guiding principles is what makes the difference when you compare Vanguard with other like companies “. From its origins in 1975, Vanguard was a renegade explorer. It represented a departure from mainstream investing thoughts and practices. As Virginia Postrel points out in her TED Talk; many businesses use Glamour to allure prospective customers to their product, however more pointedly, “the glamour of industry is how it creates a magic spell to achieve a purpose”. The index fund produced a glamour of security, efficiency, and looking out for the people. When interviewed, a former employee recounted her deliberation to decide to accept a position at Vanguard. Ultimately, it was a comment her father said that was the deciding factor. He had an assortment of jobs including fireman and warehousing. Yet, he shared with his daughter that he invested all of his retirement funds, from any of the jobs, with Vanguard because he believed they were “looking out for [his investments]”. She took the job knowing that she would be helping people like her own father. For those aware of the history of Vanguard, their people-centric differentiation shines through. However, as the economics of the world and investing culture shifted over the last forty years, Vanguard began to lose its novelty. Seeing Vanguard’s success, leading investment companies introduced index funds of their own. Looking to distinguish themselves from other financial institutions, Vanguard sought to emphasize the benefits to investing with them, particularly the low
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cost. Popularized by Toyota’s Six Sigma program, Vanguard began streamlining processes and lowering its expenses. In doing so, the brand of Vanguard became commoditized as another index fund competing on price. To the savvy investor with knowledge of its rich history, Vanguard still represents that trustworthy environment away from Wall Street, but to those unaware of their investment history, Vanguard is a service for the older generation. The website (Figure 1.0) favors verbose text over iconic pictures and summarizing statements. It strives to explain itself with insider terms and acronyms which alienate potential investors. Minimum starting balances of $3000 aren’t accessible for investors new to Vanguard. The
Figure 1.0
service structure is tiered toward rewarding those making higher investments. Vanguard believes it is a company looking after the majority of people but the majority of people are looking for modern and affordable ways to invest.
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KEY FINDINGS Over the course of eight weeks, the SDMBA team analyzed various published works, articles, trends and survey data; while conducting multiple interviews, including 3 separate call center crew phone interviews. The team’s findings were as follows: 1. Vanguard has lost its connection to the average customer. 2. The current value proposition is out of touch with the everyday customer who relies on social tribes for information and advice. 3. FinTech is drastically taking over and using technology to ravage various touch points that traditional institutions used to rely on.
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Introduction “My biggest prediction for the future is that people are going to start looking after individual investors” - John C. Bogle In our initial meeting with Vanguard representatives on August 26th, 2016, the quote above would remain an underlying theme throughout our research. The team at Vanguard asked us to identify the unmet needs of customers new to financial services. Finding and learning about the unmet needs of potential Vanguard customers was indeed a large task. During the initial research it became clear that the financial industry is old, outdated and disconnected. There is also an underlying perception that the financial industry, together with Wall Street, has been taking advantage of hardworking people. We began to ask ourselves, how can Vanguard compete in this new playground given these perceptions? And how can they connect and create trust in an otherwise broken financial landscape? How Vanguard as a brand connects with their guests needs to change. We can show a direct correlation to other brands that have failed to
Figure 2.0 Megan O'Neill, Business Insider
change and have lost everything. Take for instance, the movie rental industry and the dramatic shift we saw with Netflix and Blockbuster. As Netflix embraced the internet and streaming touch points; Blockbuster was adamant about sticking with their brick and mortar stores. If Vanguard does not adapt and create tools which easily connect to people’s lives, the same outcome could happen to them. Diving further, we wanted to understand what customer segment should be their focus. We conducted 15 one on one interviews to learn more about people’s thoughts on investing in their
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various life stages. What we discovered was amazing. People at all life transitions need investment assistance for many different reasons. A few people we interviewed stated that they have started to seriously consider investment opportunities because they had a new baby or a job change. One person who is not investing stated, “[my money] is going to childcare, education and saving for college.”(Appendix M) People make major financial decisions at major life transition stages and understanding this can give Vanguard a competitive edge.
Figure 2.1
Through our research we have discovered that money ebbs and flows through these different stages of life: inheritance, changing a job, new baby, parents saving for kindergarten and college, etc. During the primary research phase, we interviewed a woman named Monica and asked “When do you think about financial decisions?” Her response was telling - “I think about it every month - only when I am doing my budget but I don’t do anything about it.” How can Vanguard connect to Monica once a month when she is thinking about investing?
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KEY TRENDS Through our research we identified 3 major trends that impact how Vanguard can attract customers. Those trends are Social Sharing, Gig Economy and Technology Touch points. While each trend has a dependency on technology, we specifically call out Technology Touch Points to take a future-forward look at how Vanguard can use cutting-edge technology to attract and retain new customers.
SOCIAL SHARING People use technology to share their lives and form tight social circles and Vanguard needs to meet people where they are in their lives. Technology has made the world a more socially interconnected place and enables people of all ages to connect with words and pictures in ways that weren’t possible more than twelve years ago. People trust their social networks more than an expensive advertising campaign; and this trend spans the generations. In the Stylus article, ”New Retirees: Boomers Embrace Millennial Values,” Boomers are “embracing the same attitudes as millennials, approaching retirement with optimism, creativity and a sense of adventure...Boomers are even embracing millennials' enthusiasm for technology. ” Just think back to when we used to only get news through newspapers, radio and tv. Today, news is generated 24/7 by anyone with access to the internet via Twitter, Facebook and other social media platforms. There is opportunity for Vanguard to reach new customers through their online and offline social networks. By better connecting with people through technology and giving the impression that they “get” the issues surrounding their life transitions, Vanguard would build stronger new customer base.
THE GIG ECONOMY As businesses downsize and constantly review their operating models, it is plain to see that the usual 9 to 5 is slowly disappearing. As a result, people today are working various jobs to make ends meet. Income flows in forms of temporary work placements and gives rise to an new entrepreneurial customer which means investing needs to come in alternative investment platforms. Businesses such as Uber, Etsy and Airbnb are all example of companies leveraging the Gig Economy trend with
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great success. In the Forbes article, “Uber Banks on World Domination,” an Uber driver in California says, “This is my full-time job now,” “I wake up when I want to wake up, and I decide how much money I want to make each week.” We began to wonder how the investment industry would function in the Gig Economy.
TECHNOLOGY TOUCHPOINTS The third trend centers around technology touch points and the rapid growth of internet-connected societies. When you think of how technology has improved over the last 10 to 15 years, it’s a dramatic shift. We liken it to the mobile app, Pokémon Go. Just ten years ago, kids at that time were trading Pokémon cards and doing “battles” with paper card stock. Fast forward those 10 years and we are seeing the Pokémon Go augmented reality app receive over 200 million downloads and create a social phenomenon. Games, like Pokémon Go and Candy Crush use referrals to draw in new players. Just as augmented reality apps are making an impact, we see that wearables and connecting them to the ioT (internet of things) is bringing about a new generation of connectedness. A great example of this is the Under Armour Health Box . Using technology, Under Armour connects your physical fitness routines, sleep patterns and eating habits to design specific workouts for your body. It begs the question, what will be Vanguard’s ioT?
NEW CUSTOMER SEGMENTS But who are Vanguard’s potential new customers in life transitions? The 15 in-person interviews we conducted helped us to understand all stages of investing. We concluded that while there are 8 life transitions, we would focus our trends on three specific customer targets. The first was Jane (Appendix Q). Jane is a mother of children headed to college soon and thinks only about investing once a month when paying her bills. She would like to know more about saving for college and has little to no investment experience. The second persona we identified was John (Appendix Q). John is single, has no children and has just been promoted. He loves to learn about investments and enjoys helping his friends with their investments. He is also looking to retire early. Finally there is Joan (Appendix Q). Joan is recently divorced and nearing retirement. She is a shopaholic and would love some sort of assistance to help her rethink her spending and learn about saving.
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We identified three possible solutions for Vanguard to implement; a short term solution, a mid-term solution and finally a future-forward opportunity to build out over the next five years. We look forward to sharing outcomes that would require further exploration once Vanguard has moved beyond the website rebranding.
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SETTING SAIL THE WEBSITE As mentioned previously, how people invest and conduct their financial investments has changed significantly since the 1980’s. In just the past 30 years, traditional financial institutions have had to compete with each other, the presence of the World Wide Web, a global economic crash and now the rise of FinTech. But how has this happened and how did we get here? Well, let’s go back. For many years, consumers have trusted banks with their money. It was impossible to imagine that anyone’s amount of wealth would not be safe and secure in a bank. After all, banks were considered “the” place that the average person could store and save for their life ahead. As the population began to grow older, people soon realized the necessity of investments and a path to an easier, secure retirement. The more people were looking for investment opportunities, the more banks and financial institutions looked to service them. It was then in the 80’s that Money Market Accounts were introduced as a saving opportunity. From there we saw financial products change and evolve today into what we know as stocks, bonds, mutual and index funds. A push forward shows that a large public perception, especially in the last 15 years, is that Wall Street and financial firms have been getting rich off of hardworking people. This became even more evident in 2008 when the Global Economic Financial Crisis left many with depleted savings account and retirement funds. It’s a little ironic that in 1975, Vanguard was one man’s revolutionary idea and now in 2016 Vanguard appears to become the people they were trying to get away from. Forty years Figure 4.0
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ago they were for the people and now they are perceived as just being for the elite. This perception of elitism has given rise to a new financial technology known as FinTech and it is taking the financial industry by storm. Startups like these are connecting people for more than conversations and picture sharing. They are making connections, building trust and creating better technology touch points with customers and their giant financial competitors. Instead of competing with these competitors head on, FinTech startups are revolutionizing specific segments of the industry. They use the latest understanding of mobile and internet trends to connect to people. And people are responding. In a Bitcoin.com article, author Allen Scott points out that “A cashless society is becoming more imminent, growing stronger in certain regions but showing progression everywhere….And as more and more people become aware that there are now better alternatives, we will likely see more and more bankers fleeing this sinking ship.” While FinTech continues to grow, traditional investment firms have resisted change because it was more convenient (and profitable) or cited regulatory restrictions. FinTech startups have embraced change and are conveniently finding a way through regulatory concerns. But what exactly does this mean for Vanguard as a brand? We found an interesting infogra phic of “Unbundling of a Bank” (Figure 1.4) and there are compelling parallels between Vanguard and a potential loss of services. Take for example, the services that are being picked off and built out subsequently faster and quite possibly better than traditional banks and even Vanguard.
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Figure 4.1 Source: Ron Shevlin, Smarketing
To get a better understanding, we look at a major touch point - Vanguard’s investor website, and examined how Vanguard can compete in this increasingly changing landscape. To begin, we asked a focus group of 10 to 15 people at the Marriott International Headquarters (Appendix A) to examine the website and give feedback on the first impressions of it as potential investors. The feedback from this group was telling. While people liked the site, many commented that is was boring and not inspirational. In fact, when asked if the website makes investing easy to understand and fun, one person responded “No, definitely not easy or fun. Looks like something that would take me all night to research and learn.” Then we looked at another touch point - the Vanguard mobile app. Considering all of the FinTech competition, we wanted to better understand what customers are saying about the Vanguard app. Upon pulling the app from the App Store, the reviews spoke volumes.
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Figure 4.2
Figure 4.3
The Vanguard app (Figure 4.2) fetches 1.2 stars in the App Store. Titles of the reviews cite the app as “Broken” or “Garbage”. If the Vanguard mobile app isn’t stable for a mobile device, a customer may ask “why should I trust my investments with them?” With that we reviewed a FinTech app, Acorns, (Figure 4.3) to understand if customers had a different experience. Interestingly, Acorns gets 4.5 stars and the reviews express an easy experience. Customers use words like “Simple” and statements like “Set it up and forget about it”. As the website is the largest touch point, we decided to test a more human centered approach with content and imagery; we took a deeper look at how a persona may interact with it. One story on the website introduces Paul for “Advice for real life”. The thing is, a mother like Jane looking to send her children to college won’t identify with a customer like Paul.
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Figure 4.4
To understand how to entice the “Jane’s” and other new customers to use Vanguard’s website, we decided to test a homepage prototype.
Components Tested in the Prototype •
Renamed Vanguard to “Avantgarde”
•
Removed the banner image and replaced it with a financial goals form to funnel users directly to the information they need
•
Changed the language from product phrasing and used more human-centric language, such as “Build your plan with a savings buddy.”
We designed a survey comparing these two prototypes and we received 31 responses. The existing site produced reactions like “boring,” “old,” and “meh” with some favorable reactions of “easy,” “authoritative” and “clean”. The new
version had some negative reactions like “unappealing” and “cluttered” but people mainly used words like Figure 4.5
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“straightforward,” “enticing,” “intuitive” and “engaging”. And while this may seem small in some respects, the reaction to the change was very positive. Of the respondents, 74% of the people surveyed thought that the new version of the website would entice them to become a new investor. One person commented on it as “makes it more accessible to those with less investing knowledge and probably means it is more engaging.” To connect more customers like Jane to Vanguard and improve the website touch points, we recommend that Vanguard update the website with more aspirational images and simpler language. During three separate call center interviews, each crew member cited that they would be excited to see Vanguard update the website to make it easier for customers to navigate. One crew member stated “Often times, you know, other departments will do something, won't necessarily be explained well or will be done without the input of a frontline rep…..They assume but they don't ask the folks that are speaking to the clients every day. And that's somethings I really wish…” when talking about what Vanguard could do to help their customers utilizing the website.
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SKIPPER & THE CAPTAIN FINANCIAL BUDDY SYSTEM Just as people are sharing life events on social media, they are also relying on the same social circles to get news and advice. During the 15-person focus group we conducted (Appendix M), we asked the test subjects if they knew if their financial planner loved them. While we were often met with a resounding giggle, the more the test subjects thought; the more we heard over and over was that they did not feel that their financial planner showed any love toward them… but that they were still a great resource. One person cited, “Love me? They don’t even know me.” When we interviewed people over and over, there were mixed reviews as to whether interviewees considered a financial planner as a friend. Those nearing retirement seemed to think of their financial planners as friend or as a little more than acquaintances. But many that Vanguard would want to attract felt like they either didn’t need one or didn’t know that they needed one. Keeping the trends of social sharing in mind, we found that people like our persona John were very much interested in sharing financial advice with their peers. During an in-person interview, one person even mentioned “Service based platforms are better because it helps me manage my family and my life. I can stay connected through my apps’. In fact, we heard over and over that people take advice more from my family and friends. Another interviewee quoted “My brother is really good at investing and manages an account for me.” Our recommendation is to create “My Buddy”, an online investment platform that encourages people to create their own investment tribes. As people continue to share their lives within their own social networks, there is an untapped opportunity for Vanguard to embrace the John’s of the world to utilize Vanguard's products while maintaining trust in an established network. Additionally, the trend of social sharing and the gig economy demonstrate that 9 to 5 jobs are slowly disappearing and are creating a need for individuals to make money in different ways. We point to the rise of AirBnB, Uber and Etsy. Because people are making money differently, how people invest needs to diversify as well. And there are startups that are attempting to do this already. We looked deeper and found an example of how other brands are helping the average John’s change their
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financial landscape and where larger institutions are not. Motif is an online investment brokerage that allows their customers to “act on their investing desires” as stated by the website. We believe that Motif is a possible partnership that Vanguard could pursue or company they could purchase to create a subscription model investment business. The Wall Street Journal quoted Motif as “giving the little guy a taste of the IPO”. Partnering with a company like Motif would allow Vanguard to connect with people at various life transitions and at all financial levels. Creating a buddy system not only allows customers to share information across their networks, but we believe that there is an opportunity here for organizers to help their friends make money while they make some residual income as well. Take for example our average John - who is very financially savvy. If he lives in the same neighborhood as Joan and Jane, John would be able to set up a portfolio for their neighborhood using Vanguard's products. Together as buddies they would work together to make some solid financial choices for their life transitions.
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LAND HO! SHOPGUARD, THE FINANCIAL WELLNESS TOOL How technology touch points have evolved impacts not just the financial industry, but nearly every industry from newspaper publishing to retail. Earlier in the report we refer the website, which is typically a customer’s first technology touch point with a financial institution. The next touch point is often the company’s mobile app, which puts the company in the hands of the consumer and their financial information just a few swipes away on their mobile device. According to a September 2016 Statista report, there are over 2 million mobile apps in the app store and as of summer 2016, over 130 billion apps have been downloaded. The competition is fierce, even in a category like Finance, which only has 2.23% market reach. Simplicity and ease of use are important characteristics for consumers, and especially our persona, Joan, a recent divorcee who knows she needs to spend less and invest more. When we look at a persona like Joan and connecting to the future, we envision an app or experience that is simple, easy to use, but more importantly, keeps finances top of mind. To connect customers like Joan to the future, we recommend that Vanguard develop a mobile app that enables customers to check finances and investments as easily and as regularly as they may check their fitness device or even Facebook. This app helps to keep investments top of mind. Recognizing behavioral economics , the app would serve a pause button before Jane makes a major purpose. Using this app, customers would quickly understand the impact of their purchase and how her financial future would be affected. Take it a step further and Vanguard could build in rewards or badges that Joan would share on their social sites; and their tribes could cheer them on. By understanding the financial and emotional triggers of Joan, Vanguard can emotionally connect to customers like Joan and learn better ways to serve their investment needs.
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We developed a mobile app prototype to illustrate one way Vanguard could integrate into the lives of their investors on a daily basis with a financial health app. To further this thought, we wondered what the next application for Vanguard could be. Building an app and then a wearable would be a natural transition to future forward thinking. But what would the wearable do and how would it work? We dove deeper and determined that ShopGuard, the financial health app, becomes the Life Wellness Wearable. Financial activity and net worth are calculated and measured on a daily basis just like steps counted, nutrition consumed and hours of sleep. Think of it as Fitbit for your finances. Each purchase, investment and debt is captured on all of your mobile devices from smartphones to smart watches. To build this platform, Vanguard would benefit from partnering with a developing FinTech company to prototype and build in this space. Alternatively, Vanguard could create an in-house incubator for FinTech firms to develop mobile apps and wearables for the brand. The in-house incubator provides benefits in terms of building up and partnering with startup firms to deliver fresh ideas and innovative solutions that bring a different perspective. Corporate groupthink won’t have as much an impact on pushing the FinTech envelope when taking this outside-in approach. Investing in a tool like the ShopGuard app for compulsive shoppers could lead into the wearable space where Vanguard can position itself to be a leader in not just financial wellness, but overall holistic life wellness.
Figure 6.0
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SUMMARY The financial industry is under attack from various institutions and FinTech. The rise of FinTech is attracting new customers and Vanguard needs to differentiate itself in the sea of sameness. Focusing immediately on the website as a major touch point, Vanguard can create connections with customers that promote a sense of modernism using clear, relatable language. The “Jane’s” of the world will feel comfortable saving for college and will learn more about investing and saving along the way. By creating social investment tribes, Vanguard will escape the perception of elitism and can ground itself with the everyday “John’s”. Peer-to-peer networks inspire trust through established relationships, fuel self-promotive trends, and utilize the next technology touch point. And the after effect is simple - everyone makes money. And finally, a future forward Vanguard has the potential to become a technology investment firm versus just the investment firm it is today. Embracing apps, wearables and startups can help Vanguard grow their brand in a direction that was once not even conceived as a thought. The possibilities and partnerships are endless in this area. By re-establishing trust and better connecting to people through their life transitions, Vanguard can maintain a brand that can withstand another forty years. Connecting to people, connecting them to their tribes and connecting them to their future is the best way Vanguard can differentiate themselves and move forward into the future.
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REFERENCES CONSULTED http://www.pewresearch.org/fact-tank/2014/06/05/generation-x-americas-neglected-middle-child/ - Overview of Gen X perception on all fronts - government, investing, etc. http://www.ted.com/talks/virginia_postrel_on_glamour - In a timely talk, cultural critic Virginia Postrel muses on the true meaning, and the powerful uses, of glamour — which she defines as any calculated, carefully polished image designed to impress and persuade. https://www.nerdwallet.com/blog/investing/best-investment-apps/ - The best investment apps for 2016 http://www.bloomberg.com/news/articles/2016-07-18/is-this-what-you-had-in-mind-for-retirementhere-s-what-actual-retirees-found-out - What retirees have expected from retirement vs. the reality https://www.myirionline.org/docs/default-source/research/the-retirement-readiness-of-generation-xjanuary-2014.pdf?sfvrsn=2 - The overall feeling and preparedness Gen X is for retirement http://time.com/money/4258451/retirement-savings-survey/ - How much American’s really have saved for retirement, 1 in 3 have $0 https://www.consumeraffairs.com/automated-investment-services/vanguard.html?page=2 Consumer Affairs website regarding Vanguard https://www.learnvest.com/ - Educating people that investing is not as hard as it seems, provides tools and resources http://closethegaps.fisglobal.com/ - Indicates that up to half of banked consumers globally will turn to a provider other than their primary financial institution for advice and lending to support their life events – or don’t know where to turn for financial assistance
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https://thefinancialbrand.com/58528/consumer-banking-brand-loyalty/ - This article is well written with a ton if jumping off points into grounded research around how banks are thinking differently to win business http://money.cnn.com/gallery/investing/2016/06/10/10-best-investing-apps/ - 10 best investing apps - Betterment and Acorn are both listed, along with a variety of others for investors of all types http://www.wsj.com/articles/jack-bogle-the-undisputed-champion-of-the-long-run-1472855372 John C Bogle discusses success with the 40th birthday of Index fund and how to navigate in today's new investor http://www.skyword.com/contentstandard/storytelling/innovator-series/why-brand-storytelling-isthe-new-marketing-an-interview-with-robert-mckee/ - Robert McKee discusses the importance of connecting to customers with a great story, not a logo http://www.nytimes.com/2010/03/15/business/media/15adco.html?_r=0 - Interesting article - it talks about “Vanguarding” back in 2010 when Fidelity launched the “Green Line" http://www.fool.com/investing/general/2015/09/27/vanguard-or-fidelity-which-is-the-betterretiremen.aspx - Great comparison of Vanguard vs. Fidelity http://www.mrmoneymustache.com/betterment-vs-vanguard/ - Great blog from the personal point of view when using Vanguard vs. Betterment http://www.forbes.com/sites/micahsolomon/2015/09/24/your-customer-service-style-is-yourbrand-the-ritz-carlton-case-study/#6b42b5f1b8a8 - Ritz Carlton case study around service branding http://fortune.com/2015/12/30/faith-popcorn-predictions-2016/ - Great trend convo on how to reach consumers and all things 2016 http://www.aarp.org/content/dam/aarp/research/surveys_statistics/life-leisure/fantasies-fears-reslife.pdf - AARP Life Reimagined Survey Results: Fantasies and Fears: Attitudes and Fears of Adults 35+ http://www.inc.com/magazine/201509/maria-aspan/2015-inc5000-fintech-finally-lifts-off.html Talks about Fintech and how the Big Banks are paying attention to its success. http://www.faithpopcorn.com/index.php?option=com_content&view=article&id=224:our-cashlessfuture-has-arrived&catid=97:culture-pulse&Itemid=676 - Interesting trend article around a cashless future http://www.psfk.com/2016/09/financing-service-wants-to-make-saving-money-morefun.html#.V9RFuvDMXAU.email - Qapital is an app designed using a series of set-it-and-forget-it rules to make budgeting more enjoyable.
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http://www.psfk.com/2016/08/meet-ai-to-replace-hedge-funds.html - EmmaAI is a new fund automated through advanced machine learning to help make intelligent bets on the market, aiming to replace hedge funds. http://www.stylus.com/phqwft - British Airways is trialling a new service to allow passengers to automatically check in to flights. Selected travellers flying out of French airports will be checked in 24 hours before their flight, and provided with assigned seats and electronic boarding passes. http://www.stylus.com/dztdrl - In 2012, Target adding QR (quick response) codes to the packaging of its 20 top-selling toys. A downside: Besides requiring a certain amount of digital know-how, downloading the app to a smartphone in advance is arguably more complicated than being able to directly access a brand’s ecommerce site on screens in-store, for instance. http://trendwatching.com/trends/the-future-ofluxury/?utm_campaign=Free%20Pubs&utm_medium=Front%20Page%20Title&utm_source=TW%20 Front%20Page%20Tile - Five trends reshaping luxury consumerism in 2017 and beyond! http://www.stylus.com/mbkzfv - Olli, an on-demand, self-driving, 3D-printed electric shuttle bus, has been unveiled by Arizona-based start-up Local Motors. http://www.psfk.com/report/mobile-commerce-playbook - A lot of great information - especially the section around the Top 6 Apps that make transactions frictionless. Referencing one touch purchasing. http://www.emarketer.com/Article/How-Social-Media-Influences-Shopping-Behavior/1013718 Article reveals how 45% of digital consumers read reviews and comments on social sites. This has effectively influenced their buying decisions; thus demonstrating that social sharing is even more powerful than a marketing campaign. https://www.luxurydaily.com/henrys-discretionary-spending-remains-high-despite-lingering-debt/ This article is on the “HENRYs”: high earners, not really rich. This may go with our investing theme as we interview people. https://www.luxurydaily.com/american-express-blends-finance-with-contextual-tips-in-facebookchatbot/ - This link describes how AMEX is using a chatbot to communicate with customers. www.huffingtonpost.com/news/marriage-age/ - The average age for Americans getting married has reached a historic high -- 27 for women and 29 for men -- a jump from the 1990 average marrying age … www.babycenter.com/0_surprising-facts-about-birth-in-the-united-states_13...BabyCenter - In 1970 the average age of a first-time mother was 21.4. In 2013 the average age was 26. How old were you when you had your first child? In 2013 the birth rate in the United States was 62.5 births per 1,000 women age 15 to 44.
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http://money.usnews.com/money/retirement/articles/2014/05/12/the-ideal-retirement-age-andwhy-you-wont-retire-then - Working Americans expect to retire at age 66, up from 63 in 2002, according to a recent Gallup poll. But most retirees don't stay on the job nearly that long. The average retirement age among retirees is 62, Gallup found. http://www.nextavenue.org/full-house-guide-surviving-multigenerational-living/ - Multigenerational living has been increasing since the economy took a hit, and details experiences of those in these types of situations http://www.aarp.org/work/retirement-planning/info-2016/survey-more-people-expect-to-worklonger-lr.html?intcmp=AE-WOR-RP-PFS-LR Boomers are no longer planning to retire at age 65 and are feeling the pressures of managing their finances through new life transitions. https://www.thinkwithgoogle.com/articles/turning-micro-moments-into-growth-opportunities.html This article touches on micro-moments, the key moments in a purchasing decision that drive results. Something to keep in mind as we think about our transitions and the type of information our personas might be seeking at key moments in their journey https://challenges.openideo.com/challenge/financiallongevity/brief?utm_source=OpenIDEO+Challenge+News&utm_campaign=4c2969a5b6email_mailchimp_finlongevity_launch&utm_medium=email&utm_term=0_ba905080b14c2969a5b6-303690209 - IDEO Challenge that could potentially be a thought starter for Vanguard http://www.foxbusiness.com/features/2016/09/13/where-baby-boomers-spend-their-money-andhow-to-profit-from-it.html - Article on Boomers and spending power. Thinking about how a financial app or service could piggyback off of one the spending areas to stay top of mind for consumers http://qz.com/548137/all-the-names-for-the-new-digital-economy-and-why-none-of-them-fits/ - Other terms for the gig economy: gig economy, the platform economy, the networked economy, the sharing economy, the on-demand economy, the peer economy, the bottom-up economy Here is the article reference http://www.boozallen.com/insights/2015/12/booz-allen-financial-services-industry-trends-fo The financial services industry is being shaped by pressures that impact firms’ ability to deliver strong, sustainable performance
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APPENDIX A: Website Focus Group B: Website Focus Group Feedback C: Non Traditional Customer Review of Website D: General Investing Survey - Results E: Competitive Overview Map F: CTQ (Critical To Quality) Tree G: Value Proposition Map H: Brand Position Map I: Brand Resonance Model J: Trend Research K: Statistical Research L: Pinterest Possibilities and TED Talk M: Personal Research Interviews N: Test and Learning Cards O: Business Model Canvas P: Value Propositions for each Life Transition Q: Customer Personas R: Story Doodles and 5E’s for Each Customer Persona S: Touchpoint Maps for all Life Stages and Personas T: Value Proposition for Customer Personas U: Headline Scenario Planning V: Recommendation Building W: Future State Business Model Canvas X: 3X3 Story Telling Exercise
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Y: Crew Member Interviews
Appendix A: Website Focus Group
Held an open session at Marriott International Headquarters to review the Vanguard website.
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Used multiple iPads for the participants to explore the Vanguard website.
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Participants actively reviewing the website as a potential investor.
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More participants viewing the website and offering documented feedback.
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A list of the questionnaire handed out and the iPad with the Vanguard website.
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Appendix B: Website Focus Group Feedback
Feedback from the Marriott Headquarters Website Survey.
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Feedback from the Marriott Headquarters Website Survey.
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Feedback from the Marriott Headquarters Website Survey.
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Feedback from the Marriott Headquarters Website Survey.
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Feedback from the Marriott Headquarters Website Survey.
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Feedback from the Marriott Headquarters Website Survey.
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Feedback from the Marriott Headquarters Website Survey.
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Feedback from the Marriott Headquarters Website Survey.
Feedback from the Marriott Headquarters Website Survey.
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Feedback from the Marriott Headquarters Website Survey.
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Feedback from the Marriott Headquarters Website Survey.
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Feedback from the Marriott Headquarters Website Survey.
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Appendix C: Non Traditional Customer Review of Website
We showed the Vanguard website to a group of kids to get their reactions to the site.
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Appendix D: General Investing Survey - Results
Garnering what their reasons were for investing
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Establishing what the monthly income was to see if we could draw parallels to the contribution amount
Trying to understand how many customers have financials planners currently.
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The we were seeking to understand if they truly wanted to have someone to work with as they build their investments.
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It was interesting that the majority of those surveyed were Gen X.
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Interesting to see that the majority of the income is from a higher wage margin.
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Appendix E: Competitive Overview Map
Appendix F: CTQ (Critical To Quality) Tree
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Appendix G: Value Proposition Map
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Appendix H: Brand Position Map
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Appendix I: Brand Resonance Model
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Appendix J: Trend Research
Boomers are embracing the same attitudes as millennials, approaching retirement with optimism, creativity and a sense of adventure.
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The stock market crash of 2008 and the turmoil that ensued in the financial system might be keeping would-be retirees on the job longer. "A lot of people may be feeling less secure about their retirement and deciding to stay on the job a few years longer,". The grim prognosis is of an older generation staying in the workplace but not spending their money – preferring to save for a decent retirement.
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Gen X revealed the poorest financial habits of the four generations studied, having the largest proportion of "informal" planners, more spenders than savers and the least likelihood of possessing more savings than debt. This lack of planning is affecting Gen X's sense of financial well being and future outlook.
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As the baby-boomer generation hits retirement, the number of younger workers replacing them is failing to keep pace, as more twenty-somethings delay entering the workplace to stay in education.
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Facebook teamed up with London-based brand consultancy Sparkler and surveyed people aged 45 to 70 in France, Italy and the UK to identify their attitudes towards ageing. Earlier this week, Facebook IQ released the first-round results of the study. Some 61% of respondents said that they are still passionate about their careers and see no reason to retire. The group also has more money and time now than ever before, allowing three in five to pursue their goals and passion projects.
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“In 10 years, it will be commonplace for 70-year-old boomers to be in work,” says Green, who argues boomers will redefine the very idea of retirement. “But there is a huge movement towards career reinvention.”
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Article is rich with information on how many business are educating customers not only about their product - but through various brick and mortar experiences.
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Bite Size Banking: FUTURE INVESTORS Nutmeg's design research suggests that future investors will demand instant answers, control over their portfolios, high ethical standards and excellent user experience. They will increasingly turn to peer reviews to make decisions.
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Families are craving brands and lifestyle is rich with the behaviors that match their individuality.
Appendix K: Statistical Research
Unique perspective on why people seek an early retirement. Source: Statista
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Wow‌ 77% of people will continue to work after they reach retirement age.
Source:
Statista
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What a transition from 1965 to 2010. Women have essentially gone from a workforce within the home to literally the workforce. We looked to find the comparison for men as more dads are staying home and were unable to locate it. But rather was able to locate the graph below from Statista regarding stay at home dads. Source: Statista
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What is interesting in this graph is that our original perception was that more fathers were staying home for either role versal or because of job loss. When in actuality this graph that more men are stay at home dads due to illness or a disability. We would like to see the income disparity between the man vs. woman working and the man vs. woman stay at home.
Source:
Statista
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While this was not US based, we felt that it was a good representation as the economic situations are similar. While above we could say that more women are working, it was difficult to breakdown if it was part or full time. In any event, it is true that more and more women are taking to the workforce. Which begs the question of income equality and how might a brand target themselves in a way that help this segment of the population build their investment power? Source: Statista
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Interesting how much people have save - seems small compared to the age bracket.
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This was sad to see and currently researching if this is still the case. Perhaps there is an opportunity to prevent this here.
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Interesting overview of how people are saving for retirement.
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Good comparison with regards to Millennials and Boomers and the knowledge gap.
Source:
Statista
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Appendix L: Pinterest Possibilities and TED Talk Pinterest: https://www.pinterest.com/mclnnnjenn/branding-vanguard/ TED Talk: https://www.ted.com/talks/shivani_siroya_a_smart_loan_for_people_with_no_credit_history_yet Great talk on how a mobile data is being used to create credit for 2.5 billion people in the world who don’t have credit. Interesting correlation to using big data in our trend finding to attract new users/customers. Stylus Modern Families: https://www.youtube.com/watch?v=7PQez3MegTA#action=share Modern Families Overview - Interesting points of how the modern day family has evolved and how brands/companies can target the changing demographics.
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Appendix M: Personal Research Interviews Subject 1: Tell me about the best customer service you had and why? Ritz Carlton, Kansas City, MO, Had high tea, handed me a bill, it had syrup on it, they were sorry, comped my tea, called afterwards and wanted you to come back What is your favorite brand and why? Target. I think they're affordable, yet present themselves as cutting edge and accessible Do you currently invest? Yes Tell me what your reasons for investing are? To not be a burden to children, travel Tell me about when you started to think about investing? After husband had heart attack, what the investments are, life insurance and password Tell me feel about your future financial situation? Okay, not great, I worry, hear things on the news, presidential candidates, concerned Talk to me about how often you think about investing and/or saving money? 4-5 times a week, save for investment instead of buying a new computer Would you share who you currently invest with? Morgan Stanley Does your investment firm love you? How do you know? Yes, they tell me, one of my best friends, became friends through investing, suggested book, shared interests, listened to me and knew me personally
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How would like your investment firm to love your business? I would like them to value my opinions, morals and beliefs, whether they agree with them or not, respect, socially responsible investors, important When you think about managing your day-to-day finances, what has been particularly helpful to you as you manage your money? Text message everyday telling me my balance, through bank How does this help you manage your money? Puts it front and center Can you tell me if there are any tools or services that you wish were available to make it easier to manage your investments? I don’t know what they would be Let's pretend that you would like to save a little more money. Ideally, how much would you like to save each month? What would you do differently? $200, like to start bringing lunch and breakfast, and with that money use part of it for a summer beach house for kids Would you consider using your smartphone or tablet to help you save more money? •
If yes, how?
Yes, savings strategies, how much money in account, updates on goals Age - 55 Sex - females Marital Status - married Employment Status - employed Kids - yes / no mentioned 4 kids, 6 grandchildren
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Subject 2: Tell me about the best customer service you had and why? I’m just going to ay Bakers and Baristas. Tracey knows my name and is super friendly and I just like the vibe of the place, even though there are a million other places to get coffee What is your favorite brand and why? Trader Joe's. You know I’m not really brand loyal, but there is something about Joe's that makes it easy to shop and I don’t feel like I'm buying junk food even when I am Do you currently invest? Yes, I work with a financial planner, part of my adulting Tell me what your reasons for investing are? Financial security, I was able to buy my house using my investments, retirement Tell me about when you started to think about investing? Probably as a kid, you know my dad… I learned from him Tell me feel about your future financial situation? I plan to keep investing, hopefully make more money, just keep doing what I’m doing Talk to me about how often you think about investing and/or saving money? Every day? All the time really, especially now that I am a homeowner Would you share who you currently invest with? T Rowe Price for work, my financial advisor and USAA Does your investment firm love you? How do you know? I know my financial advisor loves me, because they are looking out for me, I don’t’ know about
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TRowe Price How would like your investment firm to love your business? Make it easy When you think about managing your day-to- day finances, what has been particularly helpful to you as you manage your money? Online banking and since I am friends with my advisor, I talk to her pretty frequently How does this help you manage your money? I know how much I have and what I need to do to grow my wealth Can you tell me if there are any tools or services that you wish were available to make it easier to manage your investments? Not really, I think I have a pretty good setup right now Let’s pretend that you would like to save a little more money. Ideally, how much would you like to save each month? What would you do differently? $500, stop drinking, but since I’m single, I do go out more Would you consider using your smartphone or tablet to help you save more money? • If yes, how? I’m not so sure, I check things online, but I also like talking to people Age - 33 Sex - female Marital Status - single
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Employment Status - working Kids - yes/no N Subject 3: Tell me about the best customer service you had and why? Jetblue, great experience, changing tickets, vacation overseas and doing a package, used some of our visas points and it there was a language barrier and they called on our behalf because we wanted to be closer to the each, above and beyond What is your favorite brand and why? Asics cross training sneakers, I really love them they are high quality and feel and it never had bad foot issue always feel like I’m not damaging my body Do you currently invest? Yes Tell me what your reasons for investing are? Long term income security, college funds and retirement Tell me about when you started to think about investing? Late 20s Tell me feel about your future financial situation? 4 retirement plans, refinancing ad pay off cards every month, only debt is mortgage Talk to me about how often you think about investing and/or saving money? Not so we make tweaks here and there, more middle of the road, try to be stable, hopefully made sound investments to ride out the market Would you share who you currently invest with?
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Socially responsible companies, someone who owns outlet stores, I think I do have vanguard from old job, USAA, Hancock
Does your investment firm love you? How do you know? I feel like I have no relationship with them, I get perfunctory, I never talk to a person, go online a lot How would like your investment firm to love your business? Little perks or points or something, points towards products, some low cost perk When you think about managing your day-to-day finances, what has been particularly helpful to you as you manage your money? Everything is online, when we can and I do like running reports, spend everything on credit cards to get points and track How does this help you manage your money? Eye opening, how many may times did I go to Giant? Did you go to lunch Can you tell me if there are any tools or services that you wish were available to make it easier to manage your investments? I need to do a little homework, prefer to do it online, do it at night, tools about upcoming opportunities, hot investment firms, heads up on funds, economic alerts Let's pretend that you would like to save a little more money. Ideally, how much would you like to save each month? What would you do differently? $200-300, lunch and dinners out adds up Would you consider using your smartphone or tablet to help you save more money? •
If yes, how?
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Yes, payments on my phone, money management apps, Can I? Pay directly Age - 47 Sex - female Marital Status - married Employment Status - working Kids - yes/no? 2
Subject 4: Tell me about the best customer service you had and why? Genesco (event production company) Fantastic, did everything they were supposed to do and I have no complaints would want to work with again What is your favorite brand and why? Don’t really have a favorite brand, well, I like Starbucks, yeah Starbucks I drink their coffee at least once or twice a day Do you currently invest? Through work Tell me what your reasons for investing are? Mostly retirement, didn’t save much for my kids’ college Tell me about when you started to think about investing? Starting working Tell me feel about your future financial situation? I have my 401k and pension and my husband has his 401ks, I think we’re okay
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Talk to me about how often you think about investing and/or saving money? I look at paycheck and money coming out each month, then I might log into TRowe website once a month
Would you share who you currently invest with? T Rowe Price Does your investment firm love you? How do you know? What kind of question is that? I just use them for my 401k, they use and take my money. How would like your investment firm to love your business? It doesn’t matter because I invest through work and I don’t have a choice When you think about managing your day-to-day finances, what has been particularly helpful to you as you manage your money? Checking my account online, not having to talk to anyone How does this help you manage your money? Don’t need to rely on anyone for my account information and I can control it myself Can you tell me if there are any tools or services that you wish were available to make it easier to manage your investments? Something that would help me save for my daughter's college since it is too late for my son Let's pretend that you would like to save a little more money. Ideally, how much would you like to save each month? What would you do differently? $500, stop buying stuff for my fisds when they ask for something Would you consider using your smartphone or tablet to help you save more money?
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•
If yes, how?
Sure, if there was something that could help me stop spending money on things I don’t need Age - 44 Sex - female Marital Status - married Employment Status - working Kids - yes/no? 2
Subject 5: Tell me about the best customer service you had and why? Trader Joe's What is your favorite brand and why? Not really a brand name person, I need to read brand for dummy. Trader Joe's. Friendly, convenient, no trash in the store, like trash food, small, just give you enough fresh produce, I like them being simply, healthy and fits my lifestyle Do you currently invest? I guess 401k, not day trader or individual investments Tell me what your reasons for investing are? Retirement, grow your , financially stability, grow your wealth, who doesn’t love money? Tell me about when you started to think about investing? My first job, 401k and what it means, whole company match Tell me feel about your future financial situation? Own property, real estate, college funds, will be considering
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Talk to me about how often you think about investing and/or saving money? Saving, I don’t think about much, because I am doing on a daily basis, , auto transfer, money is accumulating , investments, I don’t think about . Look at quarterly review of 40k portfolio Would you share who you currently invest with? TRowe Price, and Fidelity Does your investment firm love you? How do you know? I think so, because I don’t bother them that much, probably don’t love me that much because I don’t give them a lot of opportunity to profit from my account. I rarely bother them. If I don’t move my money, then it's good that they have my account, taking out like I’m their cash cow
How would like your investment firm to love your business? Not bombard me with irrelevant marketing email. Quarterly, anniversary I really interested, sends me things based on my interests, feel like they really know me and not like shocking me love When you think about managing your day-to-day finances, what has been particularly helpful to you as you manage your money? Easy access to my account, Dashboard, resources, like search for details , how I can easily contact the customer service. How does this help you manage your money? Gives me the just in time resource that I need, because it's so easy that I don’t have to waste a lot of time, versus spending 30 minutes calling and on logistic Can you tell me if there are any tools or services that you wish were available to make it easier to manage your investments? Always go to chart with account, looks at performance on grid, nice to see graphic I’m more picture than work. Side by side comparison like buying a phone Let's pretend that you would like to save a little more money. Ideally, how much would you like to save each month?
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What would you do differently? $500, go out and eat less Would you consider using your smartphone or tablet to help you save more money? •
If yes, how?
Maybe not for security reasons Age - 40 Sex - female Marital Status - married Employment Status - yes Kids - yes/no? Yes
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Subject 6
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Subject 7:
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Subject 8:
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Subject 9:
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Subject 10:
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Subject 11:
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Subject 12:
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Subject 13:
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Subject 14:
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Subject 15:
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Subject 16:
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Subject 17:
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Subject 18:
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Appendix N: Test and Learning Cards
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Appendix O - Business Model Canvas
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Appendix P: Value Propositions for each Life Transition
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Appendix Q: Customer Personas
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Appendix R: Story Doodles and 5E’s for Each Customer Persona
Multi-Generational Families
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Coupled
Uncoupled
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Appendix S: Touchpoint Maps for all Life Stages and Personas
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While all of the personas are different ages - you can see that they would interact with Vanguard for different reason and at different stages of their life. There is no recommendation to attract the customer early, but rather promote the security they can achieve while investing at life stages.
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Appendix T: Value Proposition for Customer Personas
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Appendix U: Headline Scenario Planning
Developed future scenario headlines around the trend Social Sharing.
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Developed future scenario headlines around Gig Economy Trend
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Developed future headline scenarios around Technology Touch Point trend.
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Appendix V: Recommendation Building
The recommendation build out.
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Refreshing the website experience.
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Building the Buddy Investment System.
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The app, wearable and incubator recommendation.
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Appendix W: Future State Business Model Canvas
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Appendix X: 3X3 Story Telling Exercise
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Appendix Y: Crew Member Interviews
Marcel Interview:
Jen:
Marcel, thank you so much for you time today. We really, really appreciate it. We are working with Vanguard. Let me back up just a second. So we are a group of business MBA students and we go to Philadelphia University where we studying for our Master's Degree in Design Strategy. So this specific class is all centered around Branding and we are having this really unique opportunity to work with Vanguard to help diversify, I guess is the word we could use, the customers to which you attract. So on the phone we have two groups. We have a group centered around a millennial focus and then we have the other group that is centered around everybody else. That everybody else is really trying to understand, perhaps life stage customers that Vanguard could better attract. So we wanted to spend a few minutes of your time today to ask you a few questions. Just about your job in general and the types of customers that you talk to. And then both groups will have questions that kind of target their particular segments that they are looking at. That's it. Hopefully we are easy on you. I think we will. We got a lot of great information yesterday, and so I think we will continue that trend today.
Jen:
So can I pause for a moment and then open up any other questions from you Marcel or the group if I forgot anything.
Marcel:
I don't have any questions. Though it might be helpful just to talk really quickly about my background here at Vanguard. I've been here three and a half years now. The first nine months that I was here at Vanguard, I was just on a regular phone line, taking all sorts of inquiries. For the next two years, I worked with a department called New Client Experience, which was a pilot group focused on new clients coming into Vanguard, helping them set up their accounts, meeting their needs. I am pretty familiar with the concerns of new clients.
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In the past year I have been with a group known as, here at Vanguard, known as Select Services, which focuses on basically positioning advice and advice opportunities to clients, like our personal advisor services and helping them to consolidate assets from other institutions here at Vanguard. So that's kind of my experience here. I just thought it might be helpful before we begin. Jen:
Well you are an excellent candidate, because all of that catches everything that we wanted to cover. So perfect. That's wonderful. Let me pause again for the team. Any additional questions before we go through. I think I heard someone else jump on.
Kellie:
Yes this is Kellie.
Jen:
Kellie, hi. Welcome
Kellie:
Thank you
Jen:
Okay perfect. Let's go ahead and we will start with just some questions and then we'll pause in between. But just to start off. On average of the calls that you answer, how many of them are new investors versus existing investors? And this could go back to Marcel, kind of where you talked about being everything focused on new clients or if there is another opportunity to connect them to the role that you are in now.
Marcel:
Right. I would say my old role was solely focused on new clients. That's all we took. My current role, I would say new clients, I don't get to talk to them as much unfortunately. It's probably about five percent of my calls if that.
Jen:
Okay. What is on average the number one issue that you assist your customers with in your current role?
Marcel:
I would say, mostly helping people with doing things online. You know at
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the end of the day, if I'm not... If it's probably a problem here at Vanguard, like say money has disappeared from their accounts or their having some sort of issue. It's basically helping people work through things online or helping them with transfers. Jen:
Got it. And then how savvy would you say that the customers that you deal with are around the language to which we use? I think one of the things that's kind of popped up in our research is that, not a lot of customers are all really savvy in terms of what an index fund is or an ETF, and so on and so forth. So in your opinion, how savvy do you think these customers are?
Marcel:
Not very. I would say the savvy people generally do things by themselves. They do everything online. They're not calling in. If they do call it's because they have a problem. I would say a large part of my job is just figuring out what people are trying to do, because you are right, there is a very wide vocabulary and people use a lot of different vocabulary for the same thing. And so I think that's one part of the job that you get good at is trying decipher what folks are trying to actually say.
Jen:
And there is a particular process that you do that?
Marcel:
Generally asking questions is the best thing. Open ending questions. You know trying to find out exactly what they are describing. You know for example, if somebody has a 401K, their IRA, a small business plan, and they say "Oh you know, my plan." I can't necessarily assume they are talking about the 401K or their employer plan. They might be talking about their IRA or even sometimes people call the IRA the 401K and vice versa. They just got the vocabulary confused in their minds, and so I ask a lot of questions. I'm always trying to confirm what I think they are saying just so there are no misunderstandings.
Jen:
Do people get annoyed with that when you ask a lot of questions or do you find that they're patient?
Marcel:
I think generally they are patient, because I think that they are aware.
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They don't necessarily have the vocabulary or they are aware that they are not saying things right. It is a bit of um... Well obviously you don't want to play too dumb, but I would say ninety percent of people are fine asking questions to clarify. Jen:
Okay. And then what would you guess the average age of the customers that you deal with. What is the average age of the customers that you deal with that would call in?
Marcel:
Right now I would say sixty. I would say when I was in New client it was a bit younger. I would have said New Clients maybe would have been on average forty.
Jen:
Okay. And then We also learned too that one of your principles is all about plain talk. Can you share some of examples of how you use plain talk when speaking with people in the call center?
Marcel:
I think part of plain talk is associating, you know what people know. Linking these investment concepts back to everyday objects, metaphors, telling a story so that people can understand what's going on. You know, certainly stripping out a lot of the jargon. And so.. let me think of an example that is not particularly too in depth. Here's one: Just to summarize quickly, we have two types of mutual fund share classes at Vanguard. There is investor shares, that uh... It's the same fund and the same portfolio. But investor shares has a lower minimum than the admiral shares, however if you invest a higher minimum with the admiral shares, you have lower expenses and thus you get more dividends at the end of the year. Though occasionally, you know, the share prices can differ between the two types, and so people will be like, well the investor shares share price is cheaper than the admiral share price. I want the investor because I want the cheaper deal. And so they are the same funds. They have the same returns, you are just getting more dividends with the admiral shares. So a lot of times I will use, like a little metaphor and say look you are going to be investing ten thousand dollars into this
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fund. If I gave you ten thousand dollars, would you care if I gave you in tens or twenties? And they say no wouldn't care. I say well that's the same thing with these funds. It's the same fund, you are just accessing it in slightly different ways. So let's not worry about the share price, let's look at the total return and get you into the one that's going to save you more money on the long track. So as I said, linking it back to things people understand, things that people can grasp in real life is very helpful. Jen:
Excellent. Okay. Do you happen to have a story of someone that you helped who's with investing that was wasn't one of your regular types of calls?
Marcel:
Well I think it's hard to say. It's hard to say what a regular call is, but I think frequently what will happen, things when people come in, they don't know anything. Often times when people inherit money, maybe the husband... I've had that call a few times, you know the husband passes away and the wife calls in and knows absolutely nothing. You know beyond that Vanguard takes care of the money. So that's going to be an hour long conversation that you really have to explain how it works. I would say those would be a little bit more involved when somebody comes. You know they have a lot of money, but they don't know how they got it and they don't know what to do with it. So those I'd say were the toughest. The other ones can be a little tougher. It's just you know, younger folks, people my age, they are fresh out of college, they just started a new job and they've been told hey you know you've got to invest for retirement but they don't know what that means, they just hear from their parents or their friends, and you know, call Vanguard. But they really know nothing. And so all they know is call Vanguard and so we have to help them through the whole thing. So those are going to be involved calls, you have to... You know it's starting somebody out at the basics and working up from there.
Jen:
Great. Okay. What do you think your average length of call is?
Marcel:
If I'm having an actual discussion about Vanguard, I would say ten to fifteen minutes. Generally my calls are pretty efficient on the phone. I
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would say I am usually surprised if the call lasts more than thirty minutes. More than an hour is very rare. That's only, generally if there is a real problem or its one of those calls where somebody is calling in with nothing. You know they have no information. But I would say in general, ten to fifteen minutes. Jen:
Excellent. Okay. And then what's the one things you would love to see Vanguard do to help your customers? [inaudible 00:12:09] perspective.
Marcel:
I would say just in terms of a marketing perspective I really wish that Vanguard would pull, I'm very happy you guys are talking to me, pull our crew more about changes to the website or changes to our marketing information or changes, you know letters we send out. Often times, you know, other departments will do something, won't necessarily be explained well or will be done without the input of a frontline rep. So the clients call in, they're confused, we're confused. You know, they're saying "why does it say that? You know, why does it sound like all my money's being taken away when you are just, I don't know, Maybe you're updating the bank information. Why does this confirmation sound like, all my money has disappeared or something like that. And so a lot of times I wish that, you know, whomever making these campaigns. You know we really ask frontline reps, what do think the questions from the clients are going to be, because often times people just do things, and they say "oh the reps will figure it out or the clients." They assume but they don't ask the folks that are speaking to the clients everyday. And that's somethings I really wish... Vanguards been getting better at over the last year or so, but I really wish that they would make a little bit more of an effort.
Jen:
Excellent. Marcel before we continue through, the team reminded me that they would love to be able to record. Do you have your permission just to record the information so we could go back to the tips and the points you are offering?
Marcel:
Yeah that's fine.
Jen:
Okay. Thank you. I apologize for not bringing that up earlier.
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Okay. I have two more and then I will let the millennial team ask you some questions. For you what is the most important thing that you do to connect with your callers. Marcel:
I think that at the end of the day, you really have to listen and you have to be actively listening. You know as I said, I like to ask questions and make sure that they understand what I'm saying. Often times, you know, sometimes people, if you seem impatient they will pick up on that, and they won't maybe necessarily ask questions or they won't reveal things that are bothering them. So I really think just being able to step back, listen, and make sure that they are along with you. Ask open ended questions is the best way to connect with somebody. Also I would say if its a problem situation, showing the client that you're the advocate for them. And so, a client calls in, we're large, we're a faceless corporation, and sometimes we can be very bureaucratic and just letting the client know that hey I'm on your side, "Mr. Jones, I'm going to get this done. I want to be your contact here at Vanguard. I want to help you." That's a great way if clients had a bad experience or they're feeling unsure. Letting them know that you are there for them is the best way, I feel like, to gain their trust. Get them on your side.
Jen:
That's fantastic. That's such an excellent answer. We have come into a few other things as well. So thank you so much. I have one more question. When do you hope to retire Marcel?
Marcel:
Man, I would like to retire. I have a pretty high savings rate, I have to say, working in this job. Probably out of the most people, it's hard to say. But just looking at my parents health and everything, probably by the time I'm fifty five.
Jen:
Good for you. And are you in the generics, millennial?
Marcel:
I would consider myself a millennial. I'm almost twenty seven.
Jen:
Awesome. Okay. Let me check in with the millennial team. Cause I
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really absorbed most of the time. Kellie, Marisa, Denita? Any additional questions for Marcel? Kellie:
Definitely, yeah. Thank you so far. You've just been really incitement. The only [inaudible 00:16:57] the things that you've been saying that I think we are just looking for a little clarity on, for instance, you said that you become the face of Vanguard when customers call in and you let them know that you are their advocate, but can the caller specifically request to speak with you each time that they call in?
Marcel:
Yes, so generally, you if I feel that it's a situation, that requires it I can put it on the account transfer these calls when the client calls in, transfer these calls to me, I'm taking care of it. Generally, we don't do that, just because, say I like talking with so and so but if it's an issue, it's a problem, something we are working on, that's definitely an option for the clients.
Kellie:
And if it's a matter of the client just being comfortable and having your repose established in some ways?
Marcel:
Some people. It's kind of up to the reps. I would say you are not really supposed to do that but I do know, I've done this before if I really liked the client. I'll say hey, you call anytime always ask for me, that's fine. I know I have some colleagues they have a couple clients who call them. Generally that's not how our motto works with the folks who have under a million dollars here at Vanguard. So I would say it's pretty rare, beyond if you are directly working on something.
Kellie:
What do you find that customers see as the most frustrating aspect. [inaudible 00:18:42] What gets them the most emotionally involved or riled up?
Marcel:
There's a couple things. I would say if we are talking on the meta-level here. Not properly setting expectations in regards to doing things. So that can be a problem. So say if you tell a client, oh it's going to be a day for this to get processed, it takes five. No easier way to get somebody annoyed. I would say the second thing is when clients call in, maybe
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they're web savvy. They're trying to do something online, there's no directions or it's very unclear. That's the other type of things that we do that get people annoyed or something changes in their.. they can't, say they've learned how to... they're an old person. They are seventy five, you know they don't go on the internet that much. They just go on to take their money out of their account once a month and that's that. They know how to do that well. They're very comfortable but other than that they are shaky. You know, you change the website on a client like that. Now think, nothing more guaranteed to aggravate them or annoy them. So that can be tough when you are doing website changes. Cause you know we will have people call in and say, "I don't know how to do it. You guys changed it. I was great. You're changing things." So I would say the two things as I said that rile people up is if they want to do something online it's not clear or you don't set expectations for the client. Kellie:
Okay. You've been at Vanguard for quite a few years. I believe they used to use more like standardized scripts and now it's reaching more of a conversation.
Marcel:
Yeah. Yeah. Yeah. Especially in certain areas like when we are talking about our funds, and talking about investment options and guidance that has been become a lot more freer of a conversation. Though I think it depends. I haven't been here long enough to say that it's going to be a trend that's going to to continue indefinitely but I do get the feel from folks who used to work here, a lot of times we would just say no I can't help you. I can't give advice or anything like that. Now we're more encouraged to be a little bit more conversational when you go through the disclaimers and stuff, instead of, it used to be if you said a word wrong its out. Now when we talk about disclaimers, our quality department will have points that we need to hit. So as long as you hit the points in what you're disclaiming, you're good. But you don't have to use the exact vocabulary. But I would say it's a trend. It's not a huge one here at Vanguard, but it's certainly something that's been happening.
Kellie:
Then something we have heard a few times now is that a lot of people that call and don't know the basics. So other than just having a
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conversation that starts from the ground level. How can you... What is available as like a resources to help them learn the basics? Marcel:
Right. Yeah. And some people just call in because they're not sure where online to go. This is more of a millennials question I would say. Cause millennials are just a lot more comfortable looking stuff up online. A lot of times they would call in and say "hey I'm just looking for information on this. Where on the website can I get to it?" And you show them and they say " Hey, great this is what I needed. I just wanted to read up on my IRA's." And then that's the call. I would say, generally we just recommend Vanguard's website for information. If it's a specific resource? I never have, at least in my department, I never have a problem, like say its an IRS rules they need to look at or something like that. Helping the client say hey this is what the document is called, you need to look at this. I can't help you with tax advice or something like that. But I would say generally, you try to direct them to the resources on Vanguard's website because it's fairly comprehensive and certainly those are calls sometimes where people are just looking to where to find information.
Kellie:
Okay. And do you find that when you do direct them to places where people read that information that they usually don't have any issues comprehending?
Marcel:
I would say personally, I think, and granted I am maybe not the best person to look at it cause I'm in this everyday, but I think our pages explain stuff are pretty easy to understand. There's not a lot of small print. There's a lot of white space. It hits on the points that... I think we are pretty good about explaining information and generally when I read stuff online, I think it hits most of the questions people ask. So I would say I do think the website... If you can find the information it's generally will answer what you are looking for. I would say the problems in that, on our website in particular is the search is not good. Its very hard to find online by searching the site, so that's not something I like. Also it's our frequently asked questions is pretty hidden. And so the answer would be on the website but people can't find it.
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Kellie:
Okay. Great. Marisa and Denita do you have any other questions?
Marisa:
No, I'm all set. Marcel, thank you so, so much this has been really, really helpful and informative.
Marcel:
Oh, well certainly. Hey look, you know. As I said I like when Vanguard gives us a chance to share our opinions and certainly that makes it easier for our clients or especially young folks getting the information they need to invest is a good thing. Which means happier people calling in and I can never fault that. I just want to thank you for listening to me and you have a good one all right.
Jen:
Thank you.
Danita:
Thank you so much.
Marisa:
Thank you.
Lea:
Thank you.
Marcel:
All right bye bye.
Jen:
Bye
Chris Interview:
Jen:
One more person jump in. I know they were hopping meeting to meeting.
So Chris, thank you again for your time today. Just for a point of reference, you're talking to two separate groups that are working with Lea and Avery and team. We're really working with ... We're students at Philadelphia University and we are basically working towards our MBA in Strategic Design. And the course that we're in now in centered all around branding and how we
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essentially assist working with a client partner, kind of on re-‐branding and maybe helping Vanguard specifically shift to a targeted approach.
So the interesting piece about your company is, is that, are two groups One is focused specifically on Millennials so you'll get probably some questions focused around that. And the other group, that's my team, we're centered on kind of everybody else. So, really, how do we attract new investors and how do we really kind of make Vanguard more attractive to these people in these different life transitions. So we've got just a varying amount of questions for you and I know we're pressed for time so we'll get started. But just wanted to set it up and give you just an opening of who you know your audience is and do you have any questions for us before we begin.
Kris:
No, I think as far as questions go, I don't have any at this point. Sounds good to me.
Jen:
Great! And if I'm correct, I have Marisa and we have Danita, or Kellie?
Marisa:
Danita couldn't make it today.
Jen:
Got it. Okay, Marisa. Is Kellie on the line, or is it you and I?
Marisa:
I'm not sure if Kellie's able to join either.
Jen:
Okay, awesome. So you've just got Marisa and I. And, so, we'll get started. How's that sound?
Kris:
[inaudible 00:01:59]
Jen:
So, I think Marisa will start with some of the questions that (beep) that the other group. Oh, I think we have a joiner. Is that Nate?
Nate:
Yes, Hi. Hi, this is Nate.
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Jen:
Hi, Nate. I just, we're joined with Kris and Lea. And Kris joins us from the call center. (beep) So, just gave him a brief overview of what it is we're trying to accomplish. Uh, we have Marisa as well on the phone. So we're just going to start [inaudible 00:02:20]some questions.
Nate:
OK
Jen:
Okay, excellent. So, Kris, on the average of the calls you answer how many of them are new investors versus existing investors?
Kris:
I would say existing investors for me, just where I'm at and the type of calls that I deal with, it's going to be the majority. So probably, I would say 60 percent.
Jen:
OK
Kris:
65 percent on average.
Jen:
Excellent. And what is, you know, on the average calls you take on those, what's the number one issue that you assist your customers with?
Kris:
With me, I'm in the retirement center here so I deal with more of the complex retirement issues. So I would say the number one thing that I probably talk about on a daily basis is really going to be kind of that more contribution limit, deduction limit, income that you can have. And then we typically roll into, like an excess removal or conversion type scenario. Usually they are looking for information on that. So, you know, I get a lot of people in our kind of direct call center that says, "Hey, I don't necessarily know if I can help them with this. Let me have you talk to them about that." And they're, kind of looking for, "Hey, based on my scenario, can I contribute to this type of retirement plan, or what can I do." Things like that.
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Jen:
Got it. And then, how savvy would you say that the customers that you talk to in that group are, in terms [inaudible 00:03:52] the language? So, when you're talking about funds do you feel like they're pretty well educated on what they're talking about, or do you need to spend some time educating them, or talking them through some of the terminology?
Kris:
Yeah, I say we would spend more time than maybe we should. On average, just because once you get to me, I feel like a lot of the times too, the people I deal with are small business style accounts and servicing those, so ... You know, SEP IRA, I401(k)s, 403(b)s, things like that. Those types of plans, especially if you're a self employed individual, or you're somebody running a business, you may be helping your employees [inaudible 00:04:30] retirement plans, so I feel like you should already have at least a basic knowledge. But a lot of the times it ... we do drill down until what's a mutual fund? What's an ETF?
Jen:
Mmm hmm.
Kris:
So, I feel like at this point we should be kind of getting past.
Jen:
Right, got it. Okay. And then what would you guess is the average age of the customer that calls you? Just a guess.
Kris:
I would say, if I'm going to guess, I'd put it probably somewhere between like the 43 to 47 range.
Jen:
Okay. And then we know that your principals is all about plain talk. Right? We've heard ... We've seen a lot of materials, talked to a couple of people that work inside the institution. Just wondering what some examples of how you use plain talk when you're speaking with people over the phone?
Kris:
Yeah, so, a lot of the times what I'll use so just a few examples. For example when it comes to commingling of assets, they have a lot of clients who maybe make too much money to contribute directly to a Roth. But they want to do a [inaudible 00:05:39] backdoor conversion. But then you realize, hey, you've
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got $300,000 in your traditional IRA. You can't just contribute after tax money to that and then separate it out in the conversion. It's going to be co-‐mingled. Is going to be done on a proportional basis. That type of mentality ... That type of, you know, vocabulary, they start to get a little lost. So it's like hey, let's say you went to Starbucks. And you bought a cup of coffee. That cup is like your traditional style IRA's and the black coffee that goes in that cup is going to be the pre-‐tax money. Jen:
Mmm hmm.
Kris:
Now by dumping some after tax money in there, or non-‐deductive money, you're putting cream in your coffee.
Jen:
Mmm hmm.
Kris:
So, if you're okay with that, that's great. But if you put too much cream, you're going to have to go buy another $10 cup of coffee at Starbucks. You're probably going to be pretty mad.
So, that's kind of some of the things I'll use. I use it a lot of the time too when we're talking about investments. I find that clients are ... They're looking for, you know, "Oh, well I have three accounts with you." "No, you don't. You have one Roth IRA with us. But you have three investments. Three mutual funds, three ETF's, whatever it may be." It's sometimes hard for them to visualize that. Especially if they're not online with you or you can't walk them to something.
So, a lot of the time I'll use essentially, like building a house with furniture. So, the house is the account type. That's your Roth IRA. The investments, or the mutual funds are like the furniture in that Roth. So essentially what you're doing is, you could buy more furniture. You could sell furniture. You could move the furniture around. It doesn't change the house that you're in. It simply changes how that house performs. Right? Is the couch in the way of the living room or anything like that. So, I would say that would be another one.
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And another good one too, is when we're talking about in-‐kind transfers ...
Jen:
Mmm Hmm
Kris:
That just ... That word in general seem to be a block for a lot of people. So, essentially it's kind of like saying "Hey, for [inaudible 00:07:31] transfer, we can take your couch and move it from your living room to your den. That's in-‐ kind. You're moving the same couch, it's just changing rooms."
Jen:
Mmm hmm
Kris:
Or, what we can do, is we can sell the couch. Use the money to buy a new couch to put into the den. So, you know, we're not moving it in-‐kind. Those types of things typically tend to, I guess, resonate a little bit better and people start to think, Oh, okay. I can actually view this. I can think about this. Maybe I've done this in my life.
And, so those are the types of things that we talk about. I would even say, too, when we're talking about different types of investments I like to use, you know, the analogy of kind of using, like the car, for example. So, you know, they're talking about ... Well, I want to do this, and then they take some investment that they've heard of and it completely doesn't work. And it's like, well you could invest in that, but with the goals that you have it would be kind of like taking your, you know, your Toyota Camry off road.
Jen:
Mmm hmm.
Kris:
It might do it, but it's probably not going to be the best way to do it. You know, if you could go ahead and use your neighbor's Jeep, that might be better. So, those are some of the types of things that we typically like to use. And everybody has their own thing. I've heard instead of household furniture, I've heard bowl of ice cream being used. Where it's like hey, your account is like the bowl. The different, you know, the different investments that you have are like different flavors of ice cream. So you can always add more, but the bowl's still the same. So, a lot of that stuff we like to use just because it makes it a lot
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easier. On the client. Jen:
Well, I have just learned some things. So thank you. All of those examples just helped me kind of understand just a little bit more. So that's awesome information. Thank you so much.
Kris:
Of course.
Jen:
Do you have a story of someone that you've helped during the investment process that wasn't one of the regular types of calls. And can you just kind of just tell us just a little bit more about that?
Kris:
Yeah, I think, for me it kind of does center around maybe like the Millennial type of thing. Those are not really the regular calls that I get. Usually I'm talking to people who already have accounts or maybe know a little bit of what they're doing. Just enough to be dangerous. Occasionally I get those calls where it's somebody who's just out of college. And maybe they're starting to make money now and they want to know what should I do with this? What should I do with that? Maybe they've ...
You know, I had a client one time who, just out of college, who's making good money. He hadn't really started putting away for retirement.
Jen:
Mmm hmm
Kris:
He had just started his company's 401(k). He also had some money he had inherited. And it was about $20,000. And so, you know, we talked about kind of some things as far as education goes. I got to talk about the difference between traditional and a Roth. You know, those types of things. Really educating everything. But also then, you know ... And sometimes I do get to do that. But then also taking a turn into, well, what should I do? Which again, not being in the advice role I can't really do. But when you're asking hey, should I use this ... He's saying should I use this 20 grand that I inherited recently to pay off my student loans?
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Jen:
Mmm hmm
Kris:
Or, should I invest it?
Jen:
Mmm hmm
Kris:
You know, I might want to buy a house in the future. So what should I do? And again, while I can't answer that, I can also give some alternatives, or just some things to think on. So, it was really good to have that conversation, you know. It takes a while. So we were on the call for, I would say, well over an hour. But we're talking about those things. Getting him educated on how to invest for retirement, the types of accounts and things he can do.
And also talking about what should you do. And it's like, well, let's take a look at this. You know? And I kind of talked to him about what's the percentage rate? What's the interest you're paying on your loan? And he was, you know, like I don't know. Like 3 1/2 percent or something. Pretty low. I was like, well, you're lucky! And I said secondly, you know, what are you ... With you being younger, what are you looking to put this in? And we kind of talked about some of the investment options that we were looking at. And I said, well, if we look over ten years, average annual return for this investment that he may put it in has been ... While, it's not guaranteed, it's sometimes used as a good indicator. So that $20,000 could be making you an average of 10 to 12 percent a year, potentially.
Jen:
Mmm hmm.
Kris:
While it's sitting in that account, or you could pay off the loan that you're paying pennies on. In comparison. You know? Which one would you decide to do? And it's truly going to be his decision, but those are kind of the conversations that I find a little bit more rewarding. It's not just ... Hey, I've put too much money in my Roth. I need to an excess removal. It's more of ... Hey, what can I do?
Jen:
Mmm hmm.
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Kris:
Give me some help with this. And then so, those aren't really as typical. But, it's nice when you get to have them.
Jen:
What's your average length of time on a call?
Kris:
What should it be, or what is it? (Laughs)
Jen:
What should it be and what is it. Both.
Kris:
So, typically done in the form of seconds, I think it's somewhere around ... I think we're somewhere around the 565 to 575 seconds is the goal.
Jen:
Uh huh.
Kris:
I would say I probably push more in the mid six to high seven range. Or, mid six to low seven range. I would say. As far as seconds go. So, somewhere between like 655 to maybe 725.
Jen:
And you're timed on that. Is that correct?
Kris:
We are. It's one of those things where it's kind of ... It depends on who you're talking to. So most of us here, you know, we have this goal. Every call is timed and we do have an average handle time. But, you know, you'll see that the management here is more about like, hey, if you're adding that value. That's what I want to see. If you're adding the value to the client that's great. If you're ...
Because we also have that thing where, you know, I can click a button basically and after the call, if I need to send out a form, or if I need to update the client's account, or if I need to do something with them [inaudible 00:13:31] not online. I won't get a new call immediately. If we're queuing, or if we're backed up. So, you know, that's another thing that goes into that handle time
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metric and it's going to be one of those things where if you're talking to the client you're adding value and you're doing a good job, great! If you're over the handle time and you're comprised mostly of you just sitting there, "sending a form", it's going to be a different conversation, obviously. Jen:
Right.
Kris:
So, you know, it's used as, I think, more of a barometer for things. As opposed to, hey you have to hit this [inaudible 00:14:02]
Jen:
Got it. Okay. Before I let Marisa jump on I have one more, just one more question. And what is the one thing you would love to see Vanguard do to help your customers?
Kris:
I think, just appealing to them more, I think for that younger generation. In the way that it's marketed and things like that, we don't do too much of it here. But there are so many cheap, different ways that we can do it social media and things of that nature to get out to the younger clients. I'm one of the people where, you know, I grew up with two parents who didn't go to college. They went to trade school. So my Dad built a business and they've done well for themselves. But when it comes to retirement, they don't have anything.
Jen:
Mmm hmm.
Kris:
And I have a lot of friends that don't have anything. I'm fortunate enough to ... I've gone into this [inaudible 00:14:51] and I have a great retirement program. And I've learned a lot about it. So, I'm going to be better off, even if I quit my job tomorrow and went to a job that was making way less money than other people, I'm probably still going to be better off in that retirement space or that savings application.
Jen:
Mmm hmm.
Kris:
And I feel like a lot of people that are younger don't get that. They're just
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looking for ... Let me get the paycheck, let me do what I can. And I think appealing to that generation could help bridge that gap. Because Social Security's probably not going to be there. Jen:
Yeah.
Kris:
And we can't work forever. I mean, my Dad owns a landscaping business. He's got two bad knees and four herniated disks in his back.
Jen:
Ooh, yeah.
Kris:
He's in his mid-‐fifties. He has hardly any retirement. It's not something that's practical to look at doing this in his eighties. So, you know, just having that ... Maybe just a little bit more of a thought process on it. Any of the commercials you see, anything you see is typically geared towards somebody who is either my father's age or older.
Jen:
Yes.
Kris:
Approaching retirement, you know? It's boring. I turn it off. I don't want to see it. (Laughs) You know, so finding ways to kind of appeal to that, so that they start getting that education sooner. So that that call where I'm educating a young kid out of college is more of what I'm taking, so that I can help them.
Jen:
Perfect. And then Kris, can I ask are you a Millennial yourself or are you Gen X, or ...
Kris:
I am 25. So yeah.
Jen:
Good stuff. Okay. Marisa, I'm sorry I've taken a lot of time. Did I ... I hope I answered or asked some questions that were on your bucket list as well. (Laughs)
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Marisa:
And Jen, you did a awesome job. I only have one or two more to add.
Jen:
Awesome.
Marisa:
So Kris, I was just wondering, do you think there is one message that Vanguard really expresses well to it's customers?
Kris:
Yeah, I think really, honestly the thing that we express really well is kind of that control what you can control and just try to not worry about the things that you can't. So, and that's really big for us because we're always talking about the fact that we're an at cost provider with a low cost solution. A low cost option.
So, we're talking about, hey this is something that you can control, right? The reason that we're here is because you don't need to be paying 1 percent or 1 1/2 percent when you could pay 30 basis points. You could pay just point 3 percent. And so you start talking about those things as to hey, let's diversify out and let's do this. As opposed to the mentality of well, what if the market fails? Well, if we have a total market crash and everything goes, you know, for lack of a better term, to Hell in a hand basket, I'm don't think I'm going to be worrying about my retirement account. I'm probably just going to be worrying about staying alive. (Laughs) So, let's not worry about that because that's not something that's necessarily, completely happened. Even the Great Depression wasn't an end all, be all. So if you're thinking about total Armageddon why are you saving for retirement anyway?
So, we start talking about those things and say hey, let's control the things that we can so I can diversify out. I can get the most exposure for my money. I can invest in a cheap manner. I can do things that I need to do and the things that I can control. And the thing's that I can't, let's leave them off the table and not worry about them because they cloud my judgement.
Marisa:
Okay, great. And so the flip side of that, is there a message that you thing Vanguard can push further?
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Kris:
I think there is. And it kind of hinges on that same thing. So we talk about being at cost a lot. But I still feel like there's a barrier with, for example those Millennials or the younger people in that most people that are younger think that they can't invest. They're like I don't have three, or four, or five, or ten thousand dollars to invest. And they think that there's this barrier to entry. So I think on top of saying, hey it's low cost, we can also say hey, you can do it. Do you have two hundred bucks? Can you put away $25 a month? I mean, you can. And that's how you can do that and I think there's a lot of ... That's not getting out there as much.
And that's one of the things I hit in the finance class in college was ... First assignment I had, my Professor said hey, I want you to think about how much does it cost you to go out on a weekend if you're going to take your girlfriend to dinner and a movie? He's like what maybe 50 bucks? We're like yeah, we'll save $50. He goes okay, so instead of doing that four weekends a month, let's do it ... One weekend a month you stay home. You don't do that. And you save that money. And then we actually looked at what we would be with an average investment. That's something I got as a finance major, but or an accounting major taking a finance class, but somebody in an arts degree or as an English major isn't going to get that same experience.
I think we need to push that and let them know, hey you don't need $10,000 to start out. This isn't something that you need. Granted, you might at other places. But there are ways to show hey, it's cheap. You can get the education you need here from us. Especially with us being at cost. I don't work from commission. So, I don't care if my conversation with a client takes an hour and I don't "sell them anything." I'm just there to help them find out what they need for retirement. So we can push the hey, you can get what you need. You can get the education. You don't have to have tons of money. There are low barriers to entering this market. Or this option that can put you better off for when you retire, or when you get to that older age.
Marisa:
And as a Millennial, just building on that, what way do you think that message is best received?
Kris:
I think it has to be something quick, easy, and accessible. I think it needs to be
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something that kind of wows them. Gets it into their face maybe, in a quick manner.
Again, with social media on the rise and things that they are. I don't typically read things that I see on my phone or my computer all the way through unless I'm really interested in them. So it's got to be in your face. It's got to be kind of quick. A few things that you can hit on and say from there, okay cool. I'm interested. Let me call or let me pull of this web site. Or let me do that.
And it's got to be something that's going to draw the attention because there are so many things out there that do draw that. So I think it's got to be visual. It's got to be a quick hit. And it's got to be something that grabs that attention so that they do decide hey, now that I've looked at this real quick I want to know more. How can I do that. How can I turn $25 a month or $50 a month into $100,000 or whatever it's going to be. I think really it's just got to be something that appeals. You know? I mean we have so many things now. Snapchat. Facebook. I don't even think Facebook is been really popular anymore. We've got Instagram. We've got these things that we can use to kind of draw that attention and I think that it's got to be something that really makes it, maybe a little bit more fun because typically it's not something viewed as sexy or appealing.
It's one of these things that like my Dad's been telling me to put this money away for the last ten years and I don't really care. I want a new pair of shoes. I mean, I was a car guy. I came from a car family. I spent more money on vehicles and customizing trucks and Jeeps and things like that growing up than I ever should have had in my hands to begin with. If I'd have just saved a little bit of that. If it had just been a little more appealing, I think that ... or grabbed my attention. I would have looked at it. If somebody would've told me hey, if you saved just a hundred dollars every summer and start getting into that mentality by the time you get to your thirties you could have a hundred thousand dollars. I would have stopped and looked real quick. So, I think it's just trying to find a way to appeal to that sensibility.
But again, nobody reads an article or anything anymore. They scan. They want a visual and they look at it. So doing something like showing a graph of if
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you're in your forties and you start with $50 a month. Investing at an average of six to eight percent a year, this is what it looks like by the time you hit sixty. Versus if you do that very easy thing starting at twenty. Let's just put the two graphs up there and let's just see. Because the difference is significant. It's almost doubled. And it's not hard to put away fifty bucks. Marisa:
Yeah. That's a great point. I don't have anything else unless Nate or Jen, you have anything?
Jen:
Nate, do you have anything? We have about two minutes left. Nate, you're on mute.
Nate:
No, I'm okay.
Jen:
You're okay?
Nate:
He answered all my questions. Thank you very much Kris. [inaudible 00:23:47]
Kris:
Yeah, hey. I appreciate you all's patience and just let me know if there's anything else you need.
Jen:
Oh my goodness. This was fantastic. Honestly, I just learned a ton more. (Laughs) The more we talk to the crew members at Vanguard I ... Marisa and Nate, I don't know if you feel the same but the more I learn, not just about your corporation, how great it it, but just some really interesting insights in terms of how we can help you really kind of shape what you're doing. So we're really, really excited. We really appreciate your time. And if there's anything we can do, please feel free to reach out to Lea and again we appreciate your time.
Marisa:
Thanks so much.
Kris:
I appreciate your all's patience. Hope you have a great day, and best of luck.
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Jen:
Wonderful. Thank you. Thanks Lea!
Lea:
You're welcome. Bye!
Marisa:
Have a good day.
Jen:
Bye now. You too.
Daniel Interview:
Dan:
... Communication wise, as far as what is going on with this stock trade or this ETF trade, or even explaining corporate actions that happen with different securities.
Jen:
Got it. That's fantastic. How would you say, ... How savvy are the customers around that language or do you spend more time clarifying with examples?
Dan:
Yes. Vanguard actually is, we've been known for how we use plain talk with our investors and that skill is something that we do even with brokerage. It's a little harder because the brokerage terms are just so specialized. Often I'll use conditional phrases or something like that just to help explain those corporate actions or whatever is going in their account, using analogies and things like that just to make sure that we actually are talking in a way that everyone really can understand. Of course there are those investors who are really smart, like very astute and they know. They've been trading their entire life and those are the types of clients that we can just kind of talk without really -
Jen:
Having to explain?
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Dan:
Yeah. I was going to use the term using a little more flowery explanations, but I wasn't sure how that would make sense or if that does makes sense.
Jen:
No, that's great. Thank you. What would you guess is the average age of the customer that calls you?
Dan:
Okay. Average age, probably in, those aging baby-boomers. So probably in the 50, 60's I would say is most of the calls.
Jen:
Great. As you mentioned, the plain talk, right? That's been one of your principals. Can you give some more examples of how you use plain talk when speaking with people over the phone. Is there a particular example or a scenario that you use where you really have to be able to use those principles to guide someone through an investment or some advice that you were giving?
Dan:
Sure. I'll give you a couple actually. For investment guidance, one of ... Because we focus mainly on asset allocation is the first thing, kind of setting up the goal and then from there figuring out that rate asset mix for a portfolio. I often use, it's a little bit cheesy, but I use boat analogies. So you know, for younger investors, those new investors in college, they can take a little more volatility in their portfolio because they have a lot more time to make up for those bumps. So I kind of use an analogy as a speedboat or something like that, or a wave cutter, because it's choppy, it's very choppy. It's not really a super comfortable ride and that's something that is good to bring up because while it may be a little bit rocky and there are a few waves along the way, you can get to your goal eventually. You have to be able to weather those, that choppiness along the way. Now for an older investor, it depends on the person. I try and play off of them and the conversation, but sometimes I'll use a cruise ship because it's got that wide berth and when you're on a cruise ship you don't really feel those waves. It's slower. It can't really turn as quickly but it's something that is a little more stable. It kind of tugs a little more toward a heavier and bonds in the portfolio.
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I try, I don't really base the entire conversation off of that, but I find that using those sorts of analogies kind of helps sometimes. Let's see, another one that I like using is with the inverse relationship of bonds, when it comes to price and interest rates. I've used this on a few people and they like it. I've actually gotten a lot of laughs out of this one. One summer I was jumping over a little creek bed to the other side of the creek to a hill on the other side. So I think of that sort of the inverse relationship of bonds and interest rates. When interest rate rises, the price of bond is going to go down and that's sort of like the gully of the little river bed. Jen:
Oh, okay.
Dan:
But then on the other side, when you get to the hill. That's sort of like the rising interest rate. As time goes along, it's presumed that over the long run that actual total return of the bond should be higher in the long run because of the rising interest rate.
Jen:
Excellent. Okay, that's great. Thank you.
Dan:
Sure.
Jen:
What is the average length of time you spend on a call?
Dan:
Okay. I'd say average probably going to be maybe about 6 or 7 minutes I would say. Although that is more average. I take a little more time with people. I'm a little more didactic and explanatory. Sometimes we really have to dig into the issue or the concern in the call or do research to try and resolve problems. I'm really good at resolving problems. That brings my average up a little bit, but then you know, sometimes, especially since I had mentioned that I help with some of our personal advisor clients, a lot of times with that, because I'm not an advisor, I can't give them super detailed information because they have, they pay for that service for a certified advisor which I just help with those accounts. Those calls actually
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tend to be a little bit quicker because I'm doing a little bit of the clerical, setting up appointments and so forth, but also really just providing basic services that aren't really guidance as far as investment goes, but they're more like account balances and doing minor transactions that they are pretty much telling me outright. Jen:
Excellent. Okay. Then I just have two more quick questions left.
Dan:
Sure.
Jen:
Then we'll let the millennial team ask some additional questions. What's the one thing you would love to see Vanguard do to help your customers?
Dan:
What I would love to see Vanguard do. I would like us to improve some of our technology that we provide to our clients. We have a lot of resources available to us and I'm actually on a team that is based on design thinking that we're actually trying to improve our system so that it's much more user friendly, both to our crew as well as our clients. You know whether it's the website which is externally available for our clients, but also for our crew because then we can help our clients better, quicker or a little more efficiently. Those sorts of technology improvements. That's the one thing that I would focus on
Jen:
Great. My last question. When do you hope to retire?
Dan:
Probably in the 60's I would say.
Jen:
In your 60's? Are you Gen X or Millennial now?
Dan:
I am 28 actually.
Jen:
Excellent. Okay. Thank you Dan. I'm going to let the new, ... Danita just joined us and -
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Dan:
Okay.
Jen:
And so I know Danita and Kellie probably have some questions from a millennial perspective as well. Ladies?
Kellie:
Okay. Hi.
Dan:
Hi.
Kellie:
I just have a few questions based on what you have just told us.
Dan:
Okay, great.
Kellie:
You mentioned that you correspond with clients via email. That's not something that I think we were aware of happening I guess. Is that a recent initiative to have access to email support?
Dan:
Okay, that's a great question. We call it our multi-channel team because it does provide that written email correspondence. Now it's actually been in existence for a number of years. It hasn't been very highly used until I would say probably the last year, maybe two years. It's something that, especially when we rolled out the secure message center on Vanguard.com. That's when it really started to pick up. I forget exactly when, but I think that was within the last year and a half. It kind of correlates there. We do get a very broad variety of emails that come in. Sometimes they are maybe only a sentence, but the amount of research that has to go into providing a very detailed complete response to that can take a good amount of time because it's kind of like a client asking in a sentence, "I had so-and-so stock. Now it's not there. What happened?" Well, then when I go in and do my research, I find out that there was a spin-off of that stock and then I have to go and explain the spin-off and where it went and what happened to it. Depending on what the client, what their activity has actually been. That can actually, that can make the request get that more detailed.
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Kellie:
So what exactly is the secure message center?
Dan:
Sure. Sorry, I probably should've started with that. On Vanguard.com, when we have clients, they, every client has a Vanguard profile whether they register online or not that's a different story, but if they were to register online, then they would create their username and password and so forth, answer security questions and they could log in externally and inside of the site there is a message center which is where we'll send electronic communications, if they choose electronic delivery of statements and such, we'll send them there. So that way we're not sending out clientsensitive information to a non secure email. That could be a security concern and we don't want to put any of our clients in that position. When we have to send secure information, we'll either send it through U.S. Post or we'll send it to the message center depending on the preference. In that message center there's a way to actually compose an email. It's not really using the personal email like JohnSmith@gmail.com, even though we could, we still can receive non-secure emails, but we prefer having a secured email because that way the client has to actually log into their profile, pass all their security questions and then when we receive that we know that it actually is coming from a secure channel.
Kellie:
Gotcha. That makes sense. Do users receive an email to their personal email account alerting them that there's a new message in there message center?
Dan:
Yep. We certainly do, but it's a very generic email. It really just says you have a message in your message center. We send the same generic type of email to the personal account if they have their statement being sent to them. It's basically just saying you're statement is available in your Vanguard.com message center. Please login to view it.
Kellie:
Gotcha. Okay. It seems like there's a lot of functionality that's available once you've actually logged in, when you're on the phone, or when you used to be on the phone with someone who is a potential new client, they don't have a user name, password, and they need to learn some of the basics of investing, I know you have a lot of educational information on your site but could they access that? What would they do instead?
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Dan:
Sure. That's another thing that Vanguard really has focused on providing investor education out there. Much of that I actually available without logging in. The advice on Vanguard.com at the Advice and Guidance tab as well as the News and Perspective tab, you can access our tools for selecting suitable investments as well as just plain learning about account and trying to hone down your goal. Also we do provide all of our research, the Vanguard research. We call it White Papers. We provide that under the News and Perspective tab which actually is available without logging in at all. Those papers are actually very technical, well pretty technical. There out for there for anyone to read and often actually I've heard of advisors who go in and they read those, external advisors, not Vanguard advisors, who go in and they read those and they go to the advisor portion of our website as well but a lot of that, the point of that really is that it's available even without logging in. Once logged in, being a Vanguard client, we actually extended some other really great analytic tools that actually really do pick apart the individual profile and asset allocation. It used to be, it's call Portfolio Watch. It's an analytic tool that will dissect the individuals accounts, let me bring that up so I can, alright, the Portfolio Watch used to be for our Voyager clients and above. That's 50,000 and above. We've actually moved that down. We, as far as I understand, we offer it to everyone now. Believe it or not, it actually does provide, it's a cost, to actually have this portfolio analysis tool offered to everyone. That's one reason that it was only offered to Voyager and above before, but we've extended that. What this Portfolio Watch tool does is, it'll give you very detailed breakdown. This profile's not too detailed ... What it will do is it will break down, for instance, a stock analysis. It will dissect that into domestic versus international. It will break it apart into the style box and a percentage of each different style box. Are you familiar with the style box?
Kellie:
No.
Danita:
No.
Dan:
Okay. It's pretty much like a nine-square box that will categorize stocks. You have mid-cap, large-cap, small-cap, I said that out of order, and then
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you have lend-type stocks, grid stocks and value stocks. It's basically a nine-square box like that where you can place the type of stock fund that you have. Depending on the characteristics of the stock, for instance large-cap blend. That would have both value and growth type stocks in it but all very big companies. So a good example would be the Vanguard 500 index. That would fall right into that category. Knowing that information and the characteristics of those stocks can be a really useful way to actually look at a portfolio and see what type of risks the portfolio has. Is it a little too heavy on the value end or the growth end or is there, is it very much over-weighted in one sector or another? Which this tool actually does break down portfolios even by sector, like the industrials or the pharmaceuticals or the textiles and so forth. The tool really does help ... For someone who knows how to read it, it's a little more technical but it does provide very beneficial analysis of a portfolio. It really does the same thing that it does for stocks, it does for bonds as well. Then also kind of looked at the costs and tax implications of the portfolio. That's something that the fingertips of pretty much all of our investors as well, know, if they just log into their portfolio. Kellie:
Okay. Great. Thanks.
Dan:
Sure. I don't know if that was too much or too technical for your, but I thought it was helpful.
Jen:
I think it was very insightful. Thank you.
Dan:
Great.
Jen:
We have probably about a minute left. Any other questions from Nate or Kellie, Danita?
Kellie:
No, I'm all set.
Jen:
Okay.
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Kellie:
Okay.
Jen:
Nate, anything to add? He might be on mute.
Dan:
Oh.
Jen:
Well, Dan, thank you so much. We really, really appreciate your time. This has been really unbelievably helpful.
Dan:
Sure. You're welcome.
Jen:
And Lea, thank you. We appreciate you setting these all up and giving us a half an hour of your lunch time.
Lea:
Yep. Any time.
Jen:
Have a great day you guys.
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