The information needs, consumption habits and expectations of asset managers and investors have undergone a transformation over the past three decades under the relentless tide of technology and industry change. Joining CoreData Research this month after 25 years in financial journalism, Matthew Craig shares a few observations and lessons from his time in the industry. The first part of this blog looks at the period 1994-2007.
Learnings from 25 Years in Financial Journalism
When Print Ruled Journalism
Back in the mists of time – 1994 to be precise – I got a foothold in financial journalism. While the UK was turning into Cool Britannia under the sounds of Britpop, Nelson Mandela took charge in South Africa and Friends was a new hit TV show.
Politically, some things haven’t changed much. A dogged Conservative prime minister, John Major, was at war with Eurosceptics in his own party. But other things have changed — back then Labour had a young and charismatic new leader, Tony Blair, after the untimely death of the respected incumbent John Smith.
On the technology front, mobile phones were bulky and expensive executive toys, while only the geekiest technophiles were online. All of which meant the financial services industry relied on print titles for news, features, opinion pieces, job ads and the odd spot of gossip.
Looking back, it was a great time to be a journalist. A spell of work experience turned into a job at Money Marketing, a weekly paper covering retail financial services. It was a talent factory at the time, with a team of eager young reporters vying to get their stories on the front page, driven on by impatient editors and their own hunger for success.
The exception to this was on Wednesdays, the day after press day, when everyone was positively encouraged to take long, liquid lunches in the belief that industry notables or wannabes would open up over a second bottle of wine. We also enjoyed regular press junkets, some of which were so lavish they would not be permitted now, even if the providers had the budget and inclination to do so.
The Dangers of Complexity
One early lesson was that complex stories could get more room than they really deserved if a writer could convince the editor that their dense verbiage was of earth-shattering importance. Stories on pensions or regulation or, even better, a mix of the two often got the coveted front page lead.
Another lesson was that ambitious journalists do not always worry about burning bridges with their contacts in the hunt for a juicy story. News is something that someone, somewhere, does not want printed but you had to learn to balance the need to produce good stories with maintaining good relationships with contacts. If you want longevity in what can be a small world, your reputation is important.
Complexity and a focus on the short-term were two factors behind a series of financial scandals we reported on. Personal pensions were mis-sold to occupational pension scheme members, endowment mortgages were mis-sold to property buyers, split-capital investment trusts were mis-sold to savers, while the high street banks mis-sold payment protection insurance (PPI) to customers taking out loans or credit cards.
These scandals invariably involved deliberately complex and often expensive products being pushed onto poorly informed customers by advisers or salespeople who were inappropriately incentivised. Such bad industry practices needed reforming — something that eventually happened but not before billions of pounds in compensation were paid out.
Complexity helped create fertile conditions for these scandals to take root, giving too many people the opportunity to lose sight of what really matters: providing the right products, with a good service, to help people achieve their financial goals.
Online Transparency and Innovation
In 1997 New Labour came to power, Princess Diana’s death induced a week of mass hysteria across the UK and I got my first work email account. Mobile phones were getting smaller, cheaper and ubiquitous and while print journalism was still dominant, the initial dotcom boom was about to take off.
In pensions, which I now covered at FT Business, part of the FT Group, the big developments were the growth of self-invested personal pensions (Sipps), the move from DB to DC pensions and yet another pension scandal which saw dozens of companies collapse and tens of thousands of blameless final salary scheme members left penniless. Complexity and lax regulation were again key issues, but rising longevity and falling interest rates were reshaping the pensions landscape.
Over the next few years the internet started to take the focus away from print media and onto content consumed on digital devices. It also brought a new level of transparency to journalism. With print, advertisers and sponsors might be happy with the look and feel of a glossy ad or editorial supplement. Online, there is far more clarity over who looks at what.
The internet also broke up the familiar structure of print publications, something to which we responded by launching an interactive, online training service for advisers called the Pensions Gym. Meanwhile, the migration of advertising online decimated one of the key income streams for print media. I left FTB in 2007 to go freelance, picking up work online and in print, but the balance would slowly swing to online writing.
And the switch to online was about to herald a step change in the way news was delivered and consumed. Speed was now the essence. Weekly or monthly deadlines were soon to be replaced with daily deadlines and hourly deadlines and it was all about getting a breaking news story out before your rival titles beat you to it. The rhythm, pace and intensity of the newsroom subsequently underwent a transformation, as did Caffeine consumption levels, as financial news outlets competed in an arms race in speed.
Earn Trust & Fight Complexity
What lessons did I learn from these experiences? Trust is vitally important — both then and now. In an annual trustworthiness index, journalists scored badly compared to most other professions. In 2018, for instance, journalists ranked below estate agents. However, they ranked above government ministers, politicians generally and, the least trustworthy profession, ad executives. So for individual journalists, earning and keeping the trust of those you write about is vital. People buy people, meaning interviewees prefer to talk to, and will say more to, journalists who they can trust.
Overcoming complexity is another lesson. Financial journalism is really about distilling what can be complicated issues into a concise news story or feature. In doing this, journalists have to be able to simplify the main elements, without distorting them, so readers can follow what’s going on. The art of financial journalism really boils down to explaining complex matters in an easy to understand and engaging manner.
Many companies in the financial services industry have at some stage been guilty of using complexity to their own advantage. But this tends to lead to bad outcomes for end investors, both of the institutional kind or mum and dad investors.
Moving from journalism into research and consulting, these lessons still apply. To stand out and resonate in today’s world of information overload, both journalists and researchers must be able to ask the right questions and report the findings/insights in a way that is accurate, absorbing and relevant. For information to be deemed valuable it must take the debate forward and support progress. Anything else is just noise.
Quite how much progress will be made on the political and cultural fronts over the next 25 years is anyone’s guess. We can only imagine what kind of sounds the country will be gyrating to in 2044 or what political party will be in power. But the lessons of trust, overcoming complexity and asking the right questions will stand the test of time.