Would You Like Fries With That Financial Advice?

The future of financial advice

By H. Adam Holt, CFP, ChFC and Derek N. H. Notman, CFP

 

One of the things that we’ve officially started examining in Rethink. -The Financial Advisor Podcast is contemplating many of the aspects of our profession. Our early conclusion is that many of our industry traditions need to be reevaluated. 

 

The premise of Rethink was to challenge and then identify some ways that we can innovate existing processes in a legacy business that’s been delivering value for hundreds of years to people with means.  Today it is finally impacting the mass population through advice delivery, financial planning, needs analysis, and tech-enabled experiences. 

 

Probably one of the most established methods of delivering financial advice has been the physical interaction between a professional and a client.  This has occurred typically in a bank or a board room, a conference room, or over the desk of a professional, and sometimes even the client’s kitchen table. 

The typical images of paneled walls and rich fixtures have always been a staple in financial worlds because wealth, security and success were often the hallmarks of an environment that supported people making confident decisions around money. 

 

While that opulence has waned over the years -as customers have become more interested in places that were welcoming and comfortable, financial services providers have also evolved their physical space and point of sale (or point of advice), physical environments.

 

There are always major catalysts in society that have been connected back to wholesale changes of industries.  It helps that nearly everyone in the market for financial advice and their advisors now have the technical infrastructure and high-speed access to effectively use digital communication unlike ever before.  And although there has been a trend towards moving away from the physical delivery location of an office or a corporate park, the COVID pandemic has accelerated the movement away from physical ties more than any single catalyst. 

 

That’s not to say that remote delivery of financial advice, (that is delivering over a screen sharing application), hasn’t been prolific in the industry. In fact, over the last five years, there has been a significant increase in the use of Zoom and screen-sharing tools to deliver advice.  Mostly because high net worth clients’ schedules were too hectic to get together with their professionals, or travel was not ideal or people were in different locations with their own busy travel and family schedules. 

 

It required using these technologies to accommodate. Very seldom did an advisor really consider that they would have to give up their physical location. Remote working was always an auxiliary and the pandemic has changed this for thousands of professionals. 

 

virtual financial advisor

 

What a lot of financial providers have realized is that the capability of displaying on a screen and communicating through accessible communication devices using the resources and familiarity many consumers have now (high-speed internet, VOIP cameras and good two-way audio), has empowered advisors to consider whether the physical location is even required, let alone ideal. 

 

This change has really inspired a lot of advisors, many of whose organizations have either endorsed or sponsored such types of virtual delivery and have recognized perhaps it’s time to make an infrastructure change. 

 

Now, there have been lots of reasons why these changes have made sense. They include removing the commute to one’s office, paying for the infrastructure rent and utilities, keeping up the cleaning and the presence that’s required, the significant cost of furniture, maintenance, and frankly just sheer flexibility of being able to be in any location without diminishing the customer experience. 

 

That’s really unheralded when you think about it because it’s very few industries that can simply pick up and move in a day. One can’t move a supermarket or a retail chain very easily, or a hospital or a physician’s practice with utilities and equipment. The professional services environment, which typically was connected to a physical location like a bank, the insurance company or the branch office, no longer is a requirement for this profession. It’s interesting to see that it took a pandemic for many people to recognize it. 

 

One of the interesting things in terms of what has happened in the pandemic is to even see how typical physical location-based services have pivoted to remain in business and deliver their products and services in a new distributed way. One of the most revealing to us was restaurants.

 

Cooks in the Kitchen?

 

When you think of restaurants, they are typically tied to a physical location with a chef, branding and a menu that’s tied usually to a location with an address.  Restaurants in Adam’s city of Philadelphia literally moved their seating to the streetside tables in order to achieve social distancing outside. Some of them closed up their physical presence and just used their kitchen to do a delivery service; and even some of them went so far as to recognize that their brand of food was so well desired, that they could actually put it into a food truck and drive it around to separate locations for which they became even more accessible. 

 

This is what got us thinking. In theory, nothing is to stop a boutique financial advisor practice with a speciality niche from being literally virtual anywhere. This is the reference to our financial food truck, the capacity to take one’s infrastructure wherever they go and drive to any location and literally open up a store with minimal infrastructure. 

 

financial advice

 

Since customer experience is really driving financial advice more than anything, one’s digital experience, the journey that a client has, the speed of execution, the transparency of cost, the emotional intelligence of the advisor and their understanding of family’s needs, is establishing a deeper relationship that is less constrained to the physical and enabled to accel though the virtual and remote.

 

It’s time to rethink this too and consider what is the real value proposition that consumers are paying for. They’re not paying for marble and mahogany. They’re paying for meaningful progress with a guide that’s going to help them make the best decisions at the time. 

 

And frankly, the best advisor for a household may be halfway around the country.  Perhaps one day we will see walk-up financial advice out of a food truck on 4th and Main.  If you see one, take a picture and share it. 

 

How are you rethinking your practice?

 

Cheers,

 

Adam Holt

Financial Advice in the 21st Century – What Do Financial Advisors & Clients Actually Want?

Financial Advice in the 21st Century – What do financial advisors & clients actually want?

For most financial advisors, the COVID-19 pandemic has proven to be the most unwelcome disruption that has affected how they conduct business. In an instance, the usual ways of doing things were brought to a sudden stop and financial advisors appear to be slow off the blocks in adapting to these changes.

Whilst the exponential development of technology has enabled many financial advisors to modify their approach, nothing could have prepared them for forcefully halting the very nature of their business. All of sudden, there were no more personal meetings, sharing of presentations, networking events, or social lunches.

As Warren Buffett has said, we will know who isn’t wearing swimming suits when the tide goes out. Well, the tide went out and then some! Financial advisors now need to make necessary adjustments to their approach to navigate these unchartered waters. Many financial advisors have gone through their careers assuming what clients and financial advisors really want. One of many truths remain, like how online financial advisors choose to define their marketing strategies during this period and post-pandemic is certain to define their success, or lack of it, in the long run.

Shifting Focus

Amidst this pandemic, clients look to their financial advisors as a pillar of strength in such uncertain times. Clients rely on their advisors to help them to deal with their immediate challenges and make provisions for the future, co-creating a map that directs them to taking care of what matters the most.

The importance of working with experienced financial advisors cannot be understated as they have the knowledge and skills to guide clients through these tough times, and avoid them from making costly mistakes. With that being said, providing these critical services via a new medium, like a virtual platform, can appear to be daunting for financial advisors.

Key elements, such as building trust and maintaining connections in an online environment, are not as straight forward as they sound. Unlike other forms of sales, online financial advisors must possess a great deal of credibility to convince clients of their value, while operating in the digital space where credibility and trust take longer to earn.

Financial advisors have been, and still are, schooled to conduct business traditionally with personal, belly-to-belly interactions. Face-to-face meetings with professionally-bound marketing presentations in the clients’ home, or in a fancy office space, were key to this tangible experience that cements a relationship of trust and credibility.

Teaching an old dog new tricks has never been more relevant, as the pandemic has accelerated our use of innovation and technology. Forcing the hands of financial advisors into adopting these modern consumer experiences has meant that their focus needs to shift. There is a group of old-school advisors who are chomping at the bit to go back to how things used to be, but in reality, it will never be that way again. Will we have in-person meetings again? Of course, but they will no longer be the only option and, in fact, are not what clients moving forward are looking for exclusively. By the way, they are looking for your help online…

The 21st Century client is all about convenience and innovation, and clients these days have different expectations regarding the types of services and products they engage with. A common criticism of the financial services industry is that it has been slow to adopt technology and innovation, still relying on the old-fashioned way of conducting business.

These shortcomings have been magnified in the last year, as product providers scramble to shift into a paperless realm. Client portals and mobile apps for financial advisors are notorious for their non-user-friendly experience. If financial advisors want to cut off their traditional roots and grow into a new digital age, improvements must be made to their digital offering.

Many financial advisors have been slow to embrace social media and the digital space, and this has caused them to behave unnaturally to sustain their business. In the past year, there has been an increase in social media activity from virtual financial advisors in an attempt to market their services online and reach out to their target markets. Moreover, online financial advisors have had to learn to use online communication tools like Skype and Zoom to conduct their business.

Increased online activity does not, however, guarantee successful business growth and so tailor-made strategies are required to add credibility and trust to your offering. Very often, digital content posted by online financial advisors fails to reach their intended targets or generate new business, whilst many factors could affect a client’s impression of you over an online meeting.

A lack of attention, engagement and/or interest are key factors that cause communicators to fail to gain traction in the digital world. The convenience of getting financial advice online has created a shift in client expectations, and financial advisors must adapt to have meaningful engagement with these clients.

This shift in strategy requires time and resources, and a mental jumpstart of sorts, to overcome the traditional methods that they are ingrained with. Make no mistake, there are no shortcuts for building trust in the digital space, so these changes must be viewed as a long-term commitment to sustaining your business and livelihood.

What Are Clients Looking For?

Clients of today face many challenges when looking for a financial advisor. Although they have the convenience of going online and doing some research, they still require tailor-made information that is most suitable to their needs. They want customized human advice, but the way they want it has changed.

For 21st Century clients looking for financial advice, products, and/or services, the bulk of their research and initiation is done online through search engines and social media platforms. These are the most convenient options that help them to gather the most relevant information in the shortest space of time.

How do clients find financial advisors online?

The traditional financial advisor-client relationship has moved onto a different trajectory. While the usual activities that generate new business for financial advisors have historically been offline, they now have to impose their digital presence to attract clients that are actively looking for their products and services and to service and stay top of mind with their current clients.

Clients typically take their time when researching and choosing a financial advisor. They frequent on average 10 websites and profiles in the course of their research, trying to identify the individual or company that best fits their needs. A large part of their research is based on them conducting due diligence on their potential financial advisor online, considering that trust and credibility take longer to earn online.

Who do clients trust?

Since the coronavirus started to spread like wildfire across the globe, many clients began to limit their physical interactions – either due to their fear of contracting the virus or because of lockdown restrictions. During this period, some tech-savvy clients appeared to communicate more than usual with their financial advisors. Those clients without financial advisors, however, turned to online platforms for information, advice, and ultimately to find an advisor.

While clients have more access and choices than ever before, they often look online for a financial advisor or company whose values and credentials are closely aligned with their own. Elements such as financial advisors with a niche focus, financial philosophy, or specific personality traits will appeal to clients that identify themselves with those elements.

This is in stark contrast to the old way of conducting business where clients would consider the proximity of their financial advisor’s location when selecting one. 21st-century financial advisors have begun to realize that their digital strategies need to be aggressive, especially when dealing in a market that does not have a physical presence.

In light of this, financial advisors must centralize their marketing efforts to create a recognizable digital brand that promotes trust and credibility to prospective clients. This is critical in convincing a client to engage with you and agree to a first conversation.

 Are they the RIGHT advisor for you?

Clients appear to emphasize their relationship with their financial advisor and their perception of their advisor’s value when deciding to commit to a specific financial advisor. For your client to be confident in their decision, it is vital that trust is earned and maintained, in addition to giving sound financial advice with tailor-made service and offerings.

Virtual financial advisors have invited a new kind of pressure, as they now have to show off their value outside of traditional schemes. This is a positive development, as clients are willing to commit to an online financial advisor who provides a superior digital experience while having their financial needs effectively managed.

Overall, the 21st Century client tends to earn more and is more likely to inherit money than those of yesteryear. With that in mind, this new-age client wants to know that their online financial advisor has made an effort to incorporate technology into their operational model and move with the times.

The new generation communicates mostly through digital platforms, so having effective means of digital communication is vital for their continued support. Being unreachable on digital platforms and not responding to messages or emails in a timely fashion is a death trap for virtual financial advisors who hope to get ahead of the pack in the digital space.

Another key element is finding an online financial advisor who acts in the best interests of their clients. By having a virtual financial advisor who does so, clients can trust easier, and online financial advisors earn greater credibility. Emotional trust is also important as clients want to know that you understand their fears and concerns.

Virtual financial advisors must offer transparency and clarity in all their interactions with clients, especially over digital platforms. Since a client’s planning directly affects their future, online financial advisors must be clear about their recommendations in order for the client to make the most informed decisions.

Conveying ambiguity and withholding key information can ruin a client’s livelihood, and earn a virtual financial advisor a bad reputation in the digital space. Operating in the online space means that there is greater access to information about who you are, for instance.  This presents as a double-edged sword to advisors, depending on how good a job they’ve done in creating a robust digital footprint.

In one of my most recent polls, sentiments that matter the most in a financial advisor are experience, credentials, fees, understanding their client, transparency, and trust.

What Matters Most? Financial Advisor

 

 

 

 

 

 

 

Do they offer enough variety in products and services?

21st-century financial advisors need to cater to the unique needs of each client. In light of that, online financial advisors must have a range of products and services that appeal to the 21st Century client. They must be effective listeners to ascertain the precise needs of their clients. This enables them to make suitable recommendations and provide tailor-made advice based on the circumstances of that specific client.

How Do Financial Advisors Connect in Today’s World?

As the pandemic has forced financial advisors to implement a digital operational model, the 21st Century client has become increasingly comfortable with the concept of an online financial advisor. To effectively connect with clients today, online financial advisors must reach out to clients on a deeper level.

Many clients have found it difficult during the various stages of lockdown and isolation in the past year, so having an empathetic connection will ease their fears, allowing any financial discussion to flow more easily. Online financial advisors must be present in their engagement with clients and exercise active listening. This is particularly helpful in understanding what the client’s needs are and then making suitable recommendations that meet those needs. Of course, this has always been what the best advisors do, but doing it online has its own set of rules.

When connecting with clients, virtual financial advisors must be observant of a client’s emotions, as they will make most of their decisions based on their emotions. By allowing them the space to feel, an online financial advisor can craft unique solutions that help the client feel better about their future.

Know your client niche

You must have a deep understanding of the needs and challenges specific to your niche, as well as a clear idea of what separates your offering from your competitors. While presenting a traditional value proposition sounds like a fantastic idea, 21st Century clients have information at their fingertips and want to know details about your true value. You must be confident and articulate these details clearly and concisely through digital communication to convince your potential client of your value. Use your vibe to attract your tribe.

Understand the changes in competition

While client expectations have steadily increased with newer innovations in technology, the pandemic has accelerated the digital transformation of the financial industry. This in turn has amplified the expectations of the 21st Century client. You must understand that your competition is no longer the financial advisor down the street, but rather a string of online alternatives with all types of virtual offices.

By understanding exactly who you are competing with, you will be in a position to meet your clients’ expectations. For this to succeed, you must know exactly what your clients require, what their expectations of you as a virtual financial advisor are, and how you plan to beat the competition to deliver on these requirements.

Competition is also a double-edged sword as advisors who are crystal clear on who they are and who they serve can end up with less competition. They can communicate their value proposition so clearly that when ideal clients find them, it almost seems like a match made in heaven.

 Sincere connections

While there has always been an emphasis on sincere and genuine connections with your clients in the financial services industry, it has become even more appropriate in these uncertain times that we are experiencing. Having great knowledge about your clients beyond the scope of their financial affairs positions you as a trusted with a holistic perspective who has more to offer.

Having a rounded view of your client’s life will enable your client to open up to you easier, creating loyalty and trust. Saying the right things sincerely while conducting business on a digital platform will surely boost your reputation and attract more clients to you through virtual word-of-mouth recommendations. In other words, you are connecting with them on a human level – something we all desire at our core.

Court your clients

With your 21st Century clients being most comfortable in the digital arena, next-gen financial advisors must develop the art of nurturing clients online, much like online dating. You will need to portray the very best version of yourself and your company, and this entails some investment from your end.

Since the digital space is your new reality, you must make solid investments in your digital footprint – your website and social media platforms; how your present yourself over virtual platforms; your environment and appearance when conducting video calls; your service delivery; how you develop rapport; and the lengths you wish to go to for your client, to make their experience unique.

All these form the perfect base to set you apart from your competitors and help your clients fall in love with your products and service offering, as a by-product of an amazing experience.

Manage client expectations

Managing the expectations of a 21st Century client requires patience and dedication. This must be addressed in your first conversation with the client. Be clear in helping the client to create expectations that are within the bounds of reality and that mimic the information your digital assets promote.

For this to be successful, ensure to educate & inform potential clients first. The more information at a client’s disposal, the better-informed decisions they can make, giving them a clearer idea of what to expect. In terms of their relationship with you, those expectations must also be outlined at the beginning to avoid any confusion. This is now done via our digital assets – informing potential clients via our website, social media platforms, and the like, so they feel as if they know us, what we do, and what our prices are before they ever meet us.

Clients who feel aggrieved that their expectations aren’t being met typically have emotional responses and give direct feedback, or simply ghost you and find another advisor.

A good example is fees/pricing. Most advisors’ websites don’t list how they charge for their services. Consumers consider many factors when looking to make a purchase and price is certainly one of them. Not having a price listed is a red flag that can push people away before they’ve even reach out to you.

Take advantage of digital marketing

As the world starts to get back to some semblance of “normal”, many financial advisors may be tempted to go back to their old habits and conduct business in the traditional way. In a post-pandemic world full of innovation and technology, the traditional way of conducting business will be obsolete, as clients have effortlessly adopted digital lifestyles filled with convenience. Don’t ignore this.

Financial advisors simply must continue (or start) to pour their efforts into digital marketing to cater to the needs of the 21st Century client. A modern website with comprehensive information about your products and services, together with convenient methods of communication, will attract discerning clients who want to be empowered by your resources.

Frequent blog posts and newsletters are a great idea to engage with your clients and give them a source of reference for the latest industry news and developments. This consistent communication makes your clients feel valued and more open to engaging with you. Having a content-rich website that is aesthetically pleasing and modern while also curated for your ideal client will undoubtedly boost your digital presence, setting you apart from your competition.

With effective keyword content embedding (SEO), your website will rank higher up in Google searches, giving you greater opportunities to connect with suitable clients organically. Social media is another powerful instrument through which to communicate with potential clients. Platforms such as LinkedIn, Facebook, Instagram, and Twitter are particularly effective in helping clients feel more connected to you, building awareness of your brand, promoting thought leadership, supporting niche strategies, and helping your 21st Century client gain more insight into you and your business.

While managing social media accounts can be time-consuming and creating content takes a lot of effort, there are many innovative solutions available to help streamline those processes through automation. Be sure to include effective and activities with a high Return on Investment that can be executed strategically.

In a recent poll, most advisors indicated that they would be happy to work on a social network platform exclusively for financial advisors:

poll for advisors

 

 

 

 

 

 

Even if you are limited by compliance on what you can do with your digital/social marketing don’t use that as an excuse to do nothing.  Figure out exactly what you can do and then do it 100%!

financial advisor

Leveraging The Proper Lead Generation to Drive Growth Through Human Connection

Many financial advisors invest fair amounts in obtaining information on potential clients through lead generation services. These traditional lead generation services are not ideal, as they may not always hone in on your niche, or on people who require your products and services.

Lead generation for financial advisors often fails because:

  • advisors end up with lists that mimic the Yellow Pages in a different wrapper – leaving advisors to cold-call strangers;
  • the focus is only on quantitative matching, with complete disregard for the human connection;
  • it encourages aggressive sales tactics through fierce competition, as multiple advisors end up with the same leads; and
  • it puts the financial advisor in the driver’s seat instead of the 21st Century client that wants to be empowered to make considered decisions.

When it comes to lead generation, it comes across as being too impersonal, leaving the advisor feeling as if they’re selling something to an object without emotions. Acquiring clients, however, should always have a human element that connects advisors and potential clients for the right reasons at the right time.

In another recent poll, most advisors were inclined to pay a monthly subscription for genuine and qualified leads, while more than a quarter of the participants were prepared to contribute a percentage of their revenue for such leads:

advisor poll

 

 

Final Thoughts

To effectively understand what both clients and financial advisors want, it is important to establish a human connection with sincere and genuine intentions. Conducting business on a digital platform means that virtual financial advisors must have a strong digital presence with a solid reputation. They should also have easy-to-use and informative platforms that make it convenient for the 21st Century client to communicate.

Smart consistency: It’s critical to deliver a consistent experience and to deliver on that, by leveraging an established process in creating tailored strategies based on what’s most important to your clients. Financial advisors should put their clients’ interests before their own, using their goals and unique perspectives in their tailored strategies. A custom experience – that’s what clients want!

Exciting times lie ahead, as I am in the final stages of development for a ground-breaking solution to help the consumer connect with the right financial advisor in the 21st century.  Stay tuned…

Time to embrace the world we live in, my advisor friends!

I hope you gained some valuable insight from reading this article! Remember, you can always reach out to me for more guidance and advice.

Best Regards,

Derek Notman