Remember the good old days when financial advisors were consumers' only source of information when they selected financial professionals? It seems like just yesterday because it was. The Internet is in the initial stages of impacting the buying decisions of millions of consumers.
Tech-savvy millennials are at the forefront of this consumer revolution, but their parents are not far behind.
Robo and virtual advisory firms are also market leaders when they use the Internet to grow their businesses.
The reason for the revolution is simple. The information on the Internet helps consumers make better decisions and avoid big financial mistakes.
Brick & Mortar
Traditional financial advisors working out of brick & mortar offices characterize the good old days. They are used to initiating contact, scheduling appointments, and meeting face-to-face with consumers.
These advisors controlled all of the information that consumers relied on to select professionals who were supposed to help them plan their financial futures and invest their assets in the securities markets.
Consumers met with three or four financial advisors and selected the ones they liked the best. Most of their decisions were based on subjective information and impressions, which maximized the impact of advisor sales and relationship skills.
What is changing? Advisors no longer have complete control over all of the information that consumers rely on to make decisions. Consumers have access to extraordinary amounts of information at their fingertips. And, the information is becoming more accessible and user-friendly by the day.
The Internet becomes a game-changer when consumers use it to determine who will be their financial advisors.
Today, consumers can learn a lot about financial advisors and retain their anonymity. There is no communication until consumers want to be contacted. This is the single biggest impact on advisor marketing practices. The Internet has given consumers more control over the information they need to select the best financial advisors. And, they determine whom they want to meet with.
Advisors can no longer rely on sales tactics and skills. They may never get to use them.
Consumers use the Internet in four ways to research the quality of financial advisors who want to meet with them:
- View the messaging, content, and offers on their websites
- Google-search advisor and firm names
- View research reports for advisors and firms
- View public data on other websites (FINRA)
This information forms the consumers' first impressions of financial advisors.
A positive first impression creates credibility and trust. A negative first impression kills marketing opportunities and there are no second chances.
Advisors have a choice. Adapt to the Internet age and flourish. Or, fail to adapt and suffer the consequences.
It is already happening.
There are early adopters who are learning how to use the Internet to create positive first impressions and market their services. And, there are late adopters who have not even figured out how the Internet is impacting the growth of their businesses.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.