More and more investors are using the Internet to find financial advisors and learn more about their firms, services, and the professionals who work there.
On the other side of the same coin, most breakaway financial advisors measure the performance of their digital marketing strategies based on their Internet visibility and quantities of traffic and leads. All three are extremely important for advisors who are seeking positive ROI from their digital marketing efforts.
Sitting in the background is another digital marketing goal. That is to build credibility and trust so investors who find firms on the Internet feel comfortable giving up their anonymity and initiating contact with breakaway financial advisors.
Credibility
All financial advisors claim to be planning and investment experts. But, in the absence of an audited, GIPS compliant track record they have no way to prove they are real experts.
From an investor perspective, any claims advisors make sound a lot like sales pitches, in particular when the financial advisors have no way of proving the claims are factual and true.
This may be changing as more advisors integrate compliance-approved testimonials, reviews, references, and case studies into their marketing.
A positive testimonial or review is not a track record, but they serve the same purpose. They increase the credibility of financial advisor claims that they are experts in their field who produce competitive returns for their clients.
5 Tips for Success
Following are 5 Tips for Success for financial advisors who use digital marketing to build credibility and trust. The tips are based on investor surveys that measure what is important to investors when they select financial advisors including breakaway financial advisors.
#1. Transparency
Nothing is more important than transparency when breakaway financial advisors use digital marketing to promote their services to investors.
Transparency should be practiced every time the investor is reading something that is produced and/or is controlled by financial advisors.
Perhaps investor skepticism is the result of decades of hard-core sales practices by Wall Street. Who should investors trust after decades of hard-core sales practices - cold calling is at the top of the list.
Your best-case scenario is you practice full transparency when you deliver information to investors. It is even more valuable when your competitors are not practicing transparency.
Transparency should include information about the firm and the professionals who work there.
- Firm: Inception date, AUM, number of clients, staff, etc.
- Professional: Education, experience, certifications, compliance
#2. Reviews & Testimonials
One of the most productive digital marketing strategies is the use of reviews and testimonials to help validate the quality of advisor services.
Investors will put more credence on reviews because breakaway financial advisors will have less control over ratings and comments. Think about the positive reinforcement when investors see a material number of 5 Star quality ratings that are supported by a similar number of positive comments. This has the potential to build credibility and trust with nominal efforts on the part of advisors.
On the other hand, investors may put less credence on testimonials that are published on breakaway financial advisor websites.
Credibility for this testimonial marketing strategy can be enhanced if financial advisors are willing to add disclosures that provide documentation for the ways the testimonials were developed. For example:
- All testimonials were initiated by current clients.
- None of the testimonials were solicited by the advisors.
- None of the testimonials are from friends, family, or associates.
- None of the testimonials were edited by the advisor
- No investor was coached to make specific comments
You can see how these disclosures add to the value of the testimonials.
#3. Free Offers
Another productive strategy is the use of free offers on breakaway financial advisor websites and advertisements.
But, not just any free offer. The ones that work the best must represent substantial value to investors. Think of it this way. You are trading something of significant value (an eBook that describes a solution for a financial pain point) for the investors’ contact information - value for value.
Unfortunately, most advisors have free offers that look like sales gimmicks to more astute investors. For example, the offer is a free plan or portfolio review. Advisors are asking investors to divulge personal financial data to firms they really don’t know. This may work later when they have gotten to know the firms a little better.
#4. Sensitive Content
A significant percentage of financial advisors are uncomfortable disclosing certain information to investors. They say they do not want their competition to see the information. But it is far more likely that the information they are withholding would not produce the positive first impression that financial advisors should be seeking.
One example of sensitive content is the fee schedule of the advisor. Most advisors will disclose they are fee-only RIAs, but they will stop short of disclosing their fee schedules. Or, they are happy disclosing how they are compensated, an asset-based fee, but again no fee schedule.
What if local competitors disclosed their fee schedules to investors on their websites and investors put a value on the information. Breakaway financial advisors who practice this level of transparency will have a significant competitive advantage.
#5. Code of Conduct
Investors are better off when they trust what they see from all financial advisors, not just breakaways, and not what they hear. There is no written record for verbal information and it will not stand up in arbitration if there is a future dispute. It is the investor’s word against the advisor who more than likely will dispute the claim when there is no proof.
One of the most important types of documentation is a code of ethics that describes how the activities in the code benefit investors. For example, a breakaway financial advisor firm is an acknowledged financial fiduciary.
The firm is held to the highest ethical standard in the financial service industry. How does that benefit the advisor’s clients? Are all fiduciaries ethical? Are there reduced conflicts of interest? Is there another benefit?
What if advisors published a code of ethics that documented their business practices in ways that benefited their clients. Even better, the code addresses many of the fears that investors have when they rely on financial advisors to help them achieve their goals.
The best codes will address the biggest issues that impact the levels of trust between breakaway financial advisors and their clients. In particular, clients who have already had bad experiences with previous advisors.
