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Top 5 Reasons Why Digital Marketing is a Critical Choice for Financial Advisors

Digital marketing for financial advisors is no longer an option. It should be a critical part of every advisor’s marketing strategy.  Understanding the impact of the Internet on financial advisor marketing is as simple as understanding how the Internet has impacted investors who are seeking financial advisors.

Digital marketing makes perfect sense when you consider financial advisors are simply adapting their marketing strategies to the ways investors are finding, researching, and contacting financial advisors.

Every year that goes by makes the Internet a more pervasive influence on the lives of Americans who have Internet connections. That would be everybody financial advisors would like to talk to. 


What is the #1 marketing need for most financial advisors?

Just about every financial advisor will tell you their number one need is more qualified leads to talk to each month. This need is increasing as some old marketing tactics have become increasingly obsolete due to new technologies (Call ID) and the impact of the Internet.

Are there exceptions? Sure, some advisors have built lifestyle businesses and they are not interested in adding new clients.  But, 90% or more of financial advisors will tell you developing a steady flow of new leads is their biggest marketing need. And, there are no easy, cheap, solutions that work for everyone. It takes time and money to develop a digital marketing solution that produces consistent results. 

The sooner financial advisors get started building a digital marketing presence, the sooner the Internet becomes their best source for new clients.


How has the Internet impacted the marketing practices of financial advisors?

The Internet is just beginning to impact the way financial advisors market their services to investors. Financial services has taken longer than other industries because 650,000 advisors and representatives market financial advice and services to investors. This powerful sales culture has been very slow to change when compared to other industries. But it is changing slowly, but surely. For example, a major wirehouse just issued a policy to stop cold calling by its 15,000 representatives.

The biggest beneficiaries will be investors who use the Internet to find, research, and contact financial advisors. On the other side, enterprising financial advisors are still figuring out how to reach investors who rely on the public information of the Internet to help them make their selection decisions. 

You already know the Internet has had a profound impact on other industries. Perhaps the greatest impact has been Amazon on an industry that used to be dominated by the brick and mortar retail industry. Now, one mall after another is a ghost town.  


Has the Internet replaced the Yellow Pages?

Just about every investor uses the same four-step process for finding, researching, screening, and selecting financial advisors. Some processes are more intense than others based on the investors' previous experience with financial advisors.

In the past, investors used to hire the advisors who contacted them. Or, they found them in the Yellow Pages. This made outbound marketing tactics, for example, cold calling, more effective. Back then, the financial advisors with the biggest books of business were the most aggressive professionals with the best sales skills. This process should have come with a major warning sign because many investors ended up selecting the financial advisors with the best sales skills.

Compare that to a process that was made possible by the Internet. In fact, this process has become so pervasive, it impacts how most people make their more important buying decisions.

Step one is they have to find what they are looking for on the Internet - in this case, financial advisors investors that investors can contact for interviews. 62% of investors will enter a voice command on a mobile device. The rest type their request in a search engine - “find a financial advisor in Dallas”.

Step two is researching the financial advisors that they find on the Internet. This is by far the more important step because it does not matter how investors find financial advisors (see step one). They are still going to use the Internet, while maintaining their anonymity, to research the financial advisors that they find. Our surveys show 82% will visit financial advisor websites and 64% will Google search their names. 

Step three is to interview financial advisors to narrow their choices. This may be a traditional interview in the financial advisors’ offices. Or, in more recent times, it could be a virtual meeting on Zoom. Most investors will use the interviews to narrow their choices to the two or three finalists.

In an ideal world, step four is an objective decision that is based on Internet research and personal interviews. Investors hire advisors with the best credentials, services, and pricing. They do not hire financial advisors with the best personalities and sales skills.

The more investors rely on the research in Step Two, the higher the probability they will make the right decision in Step Four. 


What is more important, Internet exposure or a great website?

What is more important, financial advisors’ internet exposure or the content on the financial advisors’ websites? The simple answer is both are important, but there is one major difference.

Internet exposure is important because that is how investors find financial advisors. Building visibility takes time because a lot of financial advisors are competing for the same space.

Websites are also important because just about every investor, who is seeking financial advisors, will visit the websites of the advisors. This is the easiest part of the research processes that investors use to learn more about financial advisors.

For example, they can learn more about the financial advisors’ backgrounds, the qualifications of the professionals who work there, the services they provide, who they serve, and reasons why investors should select them.

Some investors will take their online research to the next level when they view articles on the financial advisors’ blogs and Google search their names. They are seeking additional information that validates the financial advisors’ claims that they are financial experts. What they see on the Internet increases the credibility of financial advisors. 


How can financial advisors create safer selection choices for investors?

Let’s face it, the information that many financial advisors provide to investors may be elaborate sales pitches. Information that may cause investors to reject financial advisors is withheld from them. The information that is controlled by financial advisors may be tainted by their self-interest.

This skepticism is exacerbated when investors, who had bad experiences with previous financial advisors, are seeking replacements.

One answer is to view information that is not controlled by financial advisors. This is tougher than it sounds because financial advisors control the information on their websites, blogs, and social media.

One change, that is happening now, is the SEC’s rule revision that allows financial advisors to promote their ratings and reviews. The perception of investors is that financial advisors do not control the ratings or the reviews that go along with them.

Another alternative for more astute investors is to put more validity on information that is documented by financial advisors. In particular, information that resides in the public domain, for example the information on financial advisor websites that has been reviewed by the firms’ compliance officers.

This may be viewed as substantially more trustworthy than verbal information when there is no written record of what was said to them. Verbal information, without documentation, may be viewed as sales pitches. Again, the more astute investor will discount this information because it is controlled by financial advisors and there is no documentation.

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