Financial advisors are modifying some of their marketing techniques and how they interact with their clients and prospects due to the current social distancing guidelines.
No one can predict how long the coronavirus will impact the U.S. economy and how people will interact with other people until a vaccine has been widely distributed.
It may be months or a year before people are willing to attend a basketball game or a concert. Indoor venues with large numbers of spectators may continue to be viewed as risky. There may be similar concerns about airplanes and cruise ships.
These concerns may last long enough that they change the perceptions and practices of millions of Americans. In fact, a logical extension of these concerns is to avoid unnecessary contact until there is a vaccine, which is 12-18 months away and may have limited distribution.
How will this impact the servicing and marketing practices of the financial services industry?
Just about every financial advisor in America has some virtual servicing relationships. This is frequently due to investors relocating and choosing to retain their current advisors. So, an advisor in Dallas could be servicing a client in Boston.
Investors in their working years may prefer virtual servicing because it is more convenient than meeting in their offices or traveling to their advisors’ offices. Meetings in local coffee shops could also produce unnecessary exposure.
Currently retired investors may not want to meet in their homes or they may prefer not to travel to their advisors’ offices.
Now layer in the fear that has been created by the virus. An increased number of investors may prefer to minimize unnecessary contact with their financial advisors. Meeting with advisors may be considered a risk because investors do not know who the advisors have been in contact with. Or, the advisor may be an asymptomatic carrier of the virus.
Perhaps the key point is investors don’t know so why create contact when there is this unknown risk. The simple alternative is for financial advisors to begin offering more of their clients a virtual alternative for service meetings.
Millions of investors, who have used advisor services in the past, have used face-to-face interviews when they selected advisors. The meetings may have occurred at their locations, the advisors’ locations, or in coffee shops.
Many investors have embraced this method because they want to know more about the advisors who will influence or control the investment of their assets. Plus, a lot of investors make subjective decisions when they select financial advisors. For example, they select the advisors they like the best. This is an easier decision in a face-to-face interview.
Virtual marketing for financial advisors is more complex because there is no existing relationship between investors and professionals.
Plus, a high percentage of financial advisors are not comfortable in virtual marketing situations because it reduces the impact of their personalities and sales skills. It also stands to reason some investors will still prefer face-to-face contact when they select financial advisors.
In the past, financial advisors used the marketing practices that best suited their skill set and business practices. They did not ask investors how they would like to conduct their financial advisor interviews. They used the process that worked best for them.
This may be changing.
It stands to reason, for the next 12-18 months, that a percentage of investors are going to prefer to minimize unnecessary contact. This means advisors are going to have to become more comfortable in a virtual marketing environment.
This also means the information investors find on the Internet will have a greater impact on their advisor selection decisions. This could be information that is published on financial advisor websites: Who We Are, What We Do, Who We Serve, Why Select Us.
The other primary source is the information investors find when they Google search the names of financial professionals and their firms.
What they see on the Internet will impact who they interview and who they interview will impact who they select to plan their financial futures and invest their assets.
There is an old adage that says money moves on trust. That is, investors select financial advisors they trust to practice transparency and tell them the truth.
Building trust in a virtual marketing environment may require some new strategies. It will be less about advisor personalities and sales skills. What advisors say will still be very important, but in a virtual marketing environment, it will be more about what investors see on the Internet.
Advisors will want to expand their Internet visibility.
Movement of Money
Market volatility causes a lot of money to move between investors and advisors.
Investors who were inclined to manage their own money during a bull market are less inclined to make their own investment decisions in a bear market. These DIY’s will seek professional advice during volatile times.
Some investors will be unhappy with the advice they did or did not receive when the market was at an all-time high and their advisors did not recommend rebalancing allocations to reduce their risk.
Some investors will be unhappy when their advisors disappeared during the crisis. For example, commission sales reps have no incentive to service clients in down markets.
They may disappear until there is an opportunity to sell another product.
This will create a lot of marketing opportunities for high-quality advisors.
The pandemic has the potential to change widely accepted business practices between investors and financial advisors.
Financial advisors will have to be more aware of investor preferences. How they prefer to communicate during and after the pandemic should be at the top of the list.
This will impact the marketing and servicing practices of financial advisors.
The sooner advisors adopt new sales and service strategies the better.