Tony Robbins recently asked a question via LinkedIn that garnered thousands of responses: How did you pick your financial advisor? I combed through the comments with some surprise and a few chuckles. My favorite response was, “I don’t trust anyone with my finances. That’s why I’m broke.”
While we think we know how people choose an advisor (referrals from friends and family), I noticed a trend of other methods that were just as popular. By considering how people in the real world seek and choose their advisor, we can increase our exposure in those areas and grow our lead pipelines. Here were the top responses:
1. Referrals (not from friends and family)
People really do report that they choose their advisor via referrals, but what’s interesting is who they ask for a referral. It turns out, investors may not envy their friends and family’s financial situations. They actually ask people who they think are financially successful for recommendations. Financially successful work colleagues topped the list. This gives weight to employer-specific marketing campaigns, which are easy to implement and effective. There were hundreds of variations of the following:
- “Referral from someone more successful than me.”
- “My advisor was one of a number of recommendations that I received from colleagues.”
- “I asked coworkers for recommendations then met with them all. My advisor interviewed very well and put together a solid plan.”
- “I asked my employer for a recommendation and they sent me to someone who understood my 401(k) plan.”
2. Personality and Service
The second most common method for choosing an advisor was based on the advisor’s ability to listen and create trust, which is no surprise. It’s important to periodically double-check to make sure you’re competing on this front. Investors are looking for an advisor who listens, explains fees clearly, and understands them. Here are some responses from this category:
- “They listen more, speak less.”
- “Empathetic listening, open and transparent communication, treat everyone the same, no matter how much or little money they have.”
- “I went with the advisor who took the time to understand what was important to me in the short, medium and long term.”
- “I picked one who listened, is patient, and is not the low-cost provider. You get what you pay for.”
3. Shopping Around
I was pleased to read that many investors used an approach of identifying and comparing several providers that they found online. I anticipate this will become more prevalent in the future as specialization increases and investors become more comfortable with online advisors. Does your online presence communicate exactly who you serve and how you help them? If not, you may want to bring your website up to speed.
- “Evaluated several local advisors who I found online.”
- “Placed cold calls around to various companies and had meetings. We just clicked with an individual. That was 8 years ago and we’ve been very happy.”
- “We made several phone calls, perused countless websites, and went with the one who had a more comprehensive approach.”
- “By interviewing three and choosing who listens more than they talk.”
4. Using Caution
One of the most popular responses was “Cautiously,” “Carefully,” or some version of the two. Transparency in fees and being a fiduciary continue to be important assets in overcoming the trust hurdle. Are you clearly communicating your independence and how you get paid?
- “Understanding how they are compensated to ensure there are no conflicts of interest.”
- “I don’t trust anyone with my finances. That’s why I’m broke.”
- “Number one prerequisite for me – must be a fiduciary.”
- “Finding someone who was truly independent.”
Some (mostly men) out there chose their advisor based on a marker of competency, from understanding investments to having a disciplined approach. If investments are your thing, make sure you lead with that foot. I work with one advisor who is very successful in marketing with his “structured and disciplined investment process” to his engineer clients. Whatever your main thing is, be sure your website and marketing materials showcase it.
- “I picked the one who gave me the best definition of beta.”
- “I chose the one who had an investment strategy I agree with.”
- “The one with a working method and a strategy that he is able to explain clearly.”
Advisors today have tremendous marketing opportunity, online and elsewhere. It’s easy to create marketing campaigns surrounding any of the above categories. Take a few minutes to review how your most recent five clients came to you. Do any patterns emerge? If so, reinvest in a marketing strategy that strengthens that avenue.
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