Let’s assume the definition of “working” is digital marketing producing leads that financial advisors can convert into prospects, clients, and positive ROI.
On the one hand, there is no guarantee digital marketing will work for everyone. Like all marketing strategies, there is a risk that the effort will fall short of producing enough revenue to cover the expense.
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On the other hand, you have seen how the Internet has dramatically changed the marketing practices of companies in other industries.
What are odds the Internet will not impact the marketing practices of financial advisory firms?
Powerful Sales Culture
Another question is why has it taken so long for the Internet to impact the marketing practices of the financial service industry?
We believe it has taken longer due to the powerful sales culture that has permeated the industry for more than 50 years.
Investors did not have to use the Internet to find financial advisors. The advisors found them. 650,000 skilled sales professionals sold financial advice, services, and products.
The problem for investors was, the financial advisors who found them, were more skilled at selling than providing high-quality planning and investment advice. Consequently, many of them had bad experiences.
It took time for them to realize the information on the Internet empowered them to make better selection decisions.
Perfect Application
The Internet is an ideal solution when investors are seeking financial advisors. That’s because it is an information-based process. Investors have access to vast amounts of information about financial advisors.
For example, the Internet enables them to visit the advisors’ websites. They can google-search the names of firms and principals at the firms. The can research firms on the FINRA, SEC, and state websites.
The Vacuum
What if they research advisors and they don’t find any online information about them? This vacuum will be a cause of major concern for cautious investors, in particular when there are substantial amounts of information for other advisors.
The Control Factor
The Internet also enables investors to maintain more control over the processes they use to research advisors. They can retain their anonymity while the conduct their research. They are not overwhelmed by solicitations from advisors who may have more sales skills than planning or investment skills.
The ultimate form of control occurs when investors decide who they want to contact.
They have researched six to eight firms and decide to interview three of them.
Opportunity Cost
There is a cost for financial advisors who choose to ignore the opportunity that the Internet has presented to them. Competitors are actively building their presence on the Internet.
The presence that matters is page one visibility on Google. This level of visibility is critical because 91.5% of Google users do not scroll to page two. Only 4.8% scroll to page two and 1.1% to page three.
From an organic perspective, a large number of firms are competing for the same ten listings. And, this does not count the advertisers who pay Google for their page one visibility and clicks.
The longer a firm defers building an online presence the more time and money it will take to build that presence.
What Are the Odds?
You might ask yourself what are the odds the Internet will impact the marketing practices of the financial service industry?
It is already impacting the practices. For example, the companies that sell leads to financial advisors have used the Internet to produce the leads for more than 20 years.
So, this is not a new application for investors. The Internet is a great source of information that empowers them to make better decisions.
Why is this even a question? It is a question because most financial advisors judge the potential of digital marketing based on their past results. These results have been tainted by weak websites and poor Internet visibility. Websites do not produce their own traffic. Internet visibility produces website traffic.
They have never given digital marketing a fair chance to produce new clients for their firms.
The Digital Marketing Alternative
Digital marketing is also referred to as Inbound Marketing. This is in stark contrast to Outbound Marketing that required financial advisors to initiate contact with investors who may not want the contact.
Outbound Marketing is largely obsolete for higher quality financial advisors who provide sophisticated planning and investment services to their clients. Outbound is used by advisors whose primary skill set is sales.
The key characteristic of Inbound Marketing is investors initiate contact with financial advisors. This process starts on the Internet. Investors use keywords to find financial advisors in their communities (Financial Advisors Dallas).
The next step is visiting the advisors’ websites to learn more about them. At this point they are still strangers and do not represent marketing opportunities for the advisors who own the websites. Websites have a one-time opportunity to convince investors to give-up their anonymity and submit their contact information.
Cautious investors will also google search the names of firms and the principals who own the firms. A small percentage will also review content on the websites of the regulatory agencies.
Based on what they see, investors will initiate contact with the financial advisors that have the best websites and online visibility.
Conclusion
The Internet is impacting the marketing practices of financial advisor firms. It does not matter how big the firm is. Any size firm can build a presence on the Internet and make it their primary source of new clients.
