Guide Investimentos: Elevating the Culture of Investing in Brazil

As one of the world’s fastest growing economies, Brazil represents a unique opportunity for domestic investment. This rapidly changing economic climate created a unique opportunity to rethink investment services for a new generation of high income individuals who want to trade and invest their money with efficiency, reliability, and transparency. In 2012 frog helped Banco Indusval & Partners, a mid-sized Brazilian bank, better understand these investors and create a comprehensive business model and experience strategy for Guide Investimentos, an investor-centered wealth management service. We spoke with Jean Sigrist, a partner in charge of innovation at Guide, about how frog is helping the firm elevate the culture of investing in Brazil.

We hear a lot about an emerging wealthy class in Brazil. Who exactly are the potential clients for Guide?

There is a large concentration of newly affluent high income individuals in the main cities of Sao Paulo and Rio de Janeiro, and we also see wealth being generated in smaller cities. Many of these people are the first in their families to have enough money to invest, but they don’t have family members or mentors to help them. While specialized services are already available to ultra high net worth investors, we want to empower high income investors with R$200,000 to R$5 Million in assets to reach their financial goals with the best advice, information, and education. Our research suggests that this group is generally dissatisfied with current solutions and is seeking alternatives.

How do Brazilians invest today?

People tend to save money, rather than invest. And so they need help to manage it. Banks in Brazil provide these services but without much differentiation. This approach may have been fine in the past, but today investors need a more thoughtful strategy. They are starting to use their retail bank for banking transactions and investing somewhere else, the same as in the U.S. A bank teller can’t be an expert on everything, and maybe the bank is selling a product that is better for the bank than for the customer. We say, leave your banking account at the bank and look for a way to achieve a better quality of life somewhere else. We can support the client along this journey.

What are consumer habits like now, and how are they changing?

Most transactions today are through credit and debit cards, rather than cash. At the same time consumers are becoming more sophisticated and are looking at new investment opportunities. We don’t have a culture of equities investing in Brazil, but we are starting to see migration away from very conservative fixed income products, like certificates of deposits and savings accounts, to mutual funds and hedge funds that deliver the same performance that clients became accustomed to when interest rates were around 15 percent. Falling interest rates have created an urgent need for investment diversification.

One critical element of frog’s business model is a network of experienced financial advisors who interact directly with clients. Why was this important?

Financial advisors have the tools and resources to bring clarity to a complex industry. They can sit down with the client and explain our promise and pricing model with total transparency. When they do this the client understands. During the onboarding process we ask about their financial goals and time horizon and then design the optimal portfolio for their wallet. It is a very powerful process that clients like because they know it will help us provide better service. We were surprised to learn that a recent ruling by CVM, Brazil’s SEC, will force financial institutions to use an onboarding process exactly like ours. We are already ahead of the game.

Another important feature is portfolio execution. How does that work?

JS: It was a huge innovation. After we recommend a portfolio and the client agrees, we execute everything with one click. We send the trade orders to all the markets at the same time and at the end of the day it is done. Most importantly, the client can view all the allocations and daily changes in value at any time. It is like a customized wealth management service using technology that brings the advantages of private banking to the mass affluent.

What was the scope of frog’s design work for the firm?

Many people in Brazil said they knew about frog’s reputation for designing great products but not about their skills in designing an entirely new service proposition, in this case for the banking and investment industry. frog designed a product and a service, from pricing models to branding guidelines and a differentiated value proposition, as well as a clean, easy to use interactive experience.

What were the main design principles for the business model and customer experience?

The principles focused on education, simplicity and trust. Our services are aimed at inexperienced investors who are given more control over their finances. Our tag line “au seu lado” (“by your side”) reinforces the theme that our interests are aligned and you can count on us. If you make money, we make money. As one of the world’s fastest growing economies, Brazil represents a unique opportunity for domestic investment. This rapidly changing economic climate created a unique opportunity to rethink investment services for a new generation of high income individuals who want to trade and invest their money with efficiency, reliability, and transparency. In 2012 frog helped Banco Indusval & Partners, a mid-sized Brazilian bank, better understand these investors and create a comprehensive business model and experience strategy for Guide Investimentos, an investor-centered wealth management service. We spoke with Jean Sigrist, a partner in charge of innovation at Guide, about how frog is helping the firm elevate the culture of investing in Brazil.