by Oresti Patricios (@orestaki) 

Picture Nelson Mandela Square in Sandton. It’s a busy shopping day, and most of the passers-by don’t give a second glance to the display in the middle of the square: sitting there under the hot October sun is a household’s worth of furniture, appliances, and even a BMW.

We’re not talking bargain basement here. This is upmarket stuff: a leather lounge suite, a flat-panel TV, a luxury bedroom suite, a full kitchen with an oven. There’s no overt branding but, just from the look of it, one realises this is good stuff. The entire set up is laid out on a large square, decorated just like an architect’s plan for a home.

Suddenly a subversive group of men dressed in black, complete with protective gear, arrives. The sinister-looking crew are carrying all sorts of cutting devices: chainsaws, electric angle grinders and more. And, before anyone knows what’s going on, the marauders are attacking everything. A huge racket fills the square: all the furniture on display is being chopped in half!

The crowd is aghast. After a couple of gasps their mobile phones are out, recording the event. More people gather to see what’s going on, many with bewildered looks on their faces.

But this isn’t a wrecking party. It is an advertising activation for a financial brand that is a practical display of what generally happens to one’s retirement funds because of the power of compounding interest. Here I mean the compounding interest that your contributions should be earning, were it not for the fees that most funds take ‘off the top’ of your investments.

The practical demonstration of this unhappy reality comes courtesy of 10X Investment (pronounced ‘Ten-Ex’), a money-management firm that is taking on the ‘big boys’ of the retirement industry.

Now, I know a lot of advisors and brokers are going to be up in arms about the subversive message here but the figures bear it out. 10X states the facts simply on its website. If you pay 3% of your investment in retirement funds for advice, brokerage fees/commission, administration and investment management, that 3% comes off the investment capital before it has a chance to earn interest. 3% doesn’t sound like a lot but, over the lifetime of your investment, it could grow your fund by over 40%, through the ‘magic’ of compounding interest.

The example 10X gives on its website is of a typical case study: “If Tom saves R3,000 per month, for 40 years, earning a return of 6.5% above inflation and he pays 1% pa in fees, his final retirement pot will be R5 million. However, if he pays 3% pa in fees, his final retirement pot will be R3 million, which is 40% less.” (These amounts are adjusted for inflation.)

It’s the same maths that applies to the concept of paying a little extra into your house bond every month: over time this can shave months or even years off your home-loan repayment term.

Daylight robbery

An authorised financial services provider, a licensed retirement fund administrator and an investment manager, 10X offers a comprehensive service in terms of fees, investment advice and management, for a 1% fee. The company brazenly says that what other investment firms charge amounts to ‘daylight robbery’ as CEO, Steven Nathan explains in a short video on the site.

He claims that most advisors can’t pick winning fund managers, and that most active funds underperform the index. The conclusion he draws is that the fees charged are therefore unfair, because one could get better performance out of a low-cost index fund, rather than an active (managed) fund. In other words, he says, clients are paying for a service that is not matching its promise. This why Nathan expressly uses the term ‘daylight robbery’ when commenting on the investment industry.

It is an audacious approach, and one can only assume that Nathan, a veteran of Deutsche Bank Securities and Ernst & Young, knows what he’s doing by challenging the entire industry with a cheeky, upstart approach. As a challenger brand, 10X is taking on some heavyweights with loads of marketing muscle, not to mention a network of brokers and advisors to support.

Smart advertising partner

But Nathan has elected a smart advertising partner in the form of M&C Saatchi Abel. The result is that 10X has taken a radically different approach in a staid, conservative industry. This aggressive message is common across all 10X’s branding. In press releases, 10X is vocal about the “moral responsibility” the investment industry has “to bring to light the unfair practices of fund managers”, which impact on the retirement scenario for clients.

On the day of the activation, a huge signboard was erected at the far end of the Nelson Mandela Square. This was covered until the power tool-wielding ‘attackers’ had removed some 40% of the luxury furniture set up, including the BMW. Then, at the right time, just when everyone was paying attention, the curtain was dropped to reveal the legend: “Will you end up with 40% less money at retirement?” The bottom half of the poster had the hashtag #StopDaylightRobbery, the website address, and the 10X slogan, “Why settle for less?”

M&C Saatchi Abel’s innovative marketing approach to 10X Investment’s audacious message and service offering clearly speaks directly to a particular customer pain. It has targeted an affluent demographic for good reason: even wealthy clients fall foul of this practice. And what a great way to bring a dry financial concept to life and into the light of harsh reality!

It is certainly something I won’t be forgetting for a while.

Credits

Ad agency: M&C Saatchi Abel
Creative director: Mark Winkler
Copywriter: Mark Winkler
Art director: Gavin Dale
Agency producer: Ronwin Bailey / Kathy Scharrer / Pontsho Tshabalala
Group account director: Illé Potgieter
Account manager: Sam L’Etang
Production manager: Francois Viljoen

Production house: Platypus
Director: Ian Chuter
Editor: Ric Shields

Activations agency: Rainbow Experiential Marketing

Ad of the Week, published on MarkLives every Wednesday, is penned by Oresti Patricios (@orestaki), the CEO of Ornico, a Brand Intelligence® firm that focuses on media, reputation and brand research. If you are involved in making advertising that is smart, funny and/or engaging, please let Oresti know about it at [email protected].

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