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For years, the financial industry has lagged in its adaption of digital tools to market to, communicate with, and manage the relationships of clients. While Financial Advisors have gradually, sometimes begrudgingly, come to embrace new technologies, the covid19 pandemic this year has accelerated their digital transformation.
For growth-focused advisors, the crisis has been a catalyst for creating more digitally-oriented business development strategies. For example, according to Fidelity, the use of video conferencing for client interactions has doubled since the pandemic hit. In a survey by Ernst & Young, 55% of advisors say they plan to use virtual meetings more in the future.
As with most trends shaping the financial services industry, clients are leading the change. With 64% of high-net-worth clients and 75% of mass-affluent clients counting on their advisor relationship to be digital, it’s not just millennial clients who prefer a virtual relationship. For the most part, advisors are adjusting well to the change, finding it more productive and more effective at building their business. It also opens up more opportunities to find and work with clients who live in other parts of the country.
Not all clients get on board the digital train
But what about the 36% of HNW individuals and 25% of mass-affluent clients who don’t prefer a virtual arrangement? Will advisors need to manage two different workflows to accommodate both types of clients? How would that affect their productivity, and would it even be worth it to try? For advisors shifting to a digital strategy emphasizing virtual engagement, would it be more productive to focus their business development on those who prefer to engage virtually?
Studies show that some people have no propensity for anything other than face-to-face engagement. Many of those same people are also reluctant to adapt to any digital interaction – be it online account management, virtual conferences, or online collaboration. While they could still meet your criteria as an ideal client in many other ways, they could disrupt your new workflow requirements, which could hurt your productivity.
Searching for the Ideal Digital Client
Advisors who successfully transform their business development and CRM to a digital strategy prefer to work with clients who are willing and capable participants in the digital age. Everything from their marketing to their sales funnel to their client communications is structured for digital engagement, except perhaps to conduct annual in-person meetings. To have to step outside that to engage with a non-participant can disrupt their whole workflow.
For many advisors, their ideal client criteria now include the willingness and ability to work together in a virtual environment. Using digital marketing tools, they can easily target these individuals through their online engagement through their website, social media, or email campaigns. But even with that, you can still come across individuals who prefer a strictly face-to-face relationship, especially when it comes to discussing serious issues or making critical decisions.
How to screen for digitally reluctant prospects
Advisors who conduct their prospecting strictly through digital channels are likely to avoid digitally reluctant prospects because they don’t tend to engage online. For instance, they are not likely to register for a webinar, preferring instead to attend a seminar in person. Regardless of where they find them, advisors should screen their prospects for their propensity for digital engagement.
Here are five signs your prospect may not be a candidate for digital engagement:
They tell you straight out. Some people are so adamant about their preferences for engagement, they will come right out and tell you upfront. Or, when scheduling an introductory meeting, you offer an appointment for a virtual meeting and they tell you they prefer face-to-face. While it may be possible to convince them otherwise, they are likely to remain reluctant even if they become clients.
They never download a report. When prospects receive your emails offering free reports or links to your website and never responds, they are either not interested in your message or not inclined to receive information digitally. Either way, they probably don’t meet your ideal client criteria.
They want information mailed to them. If, after speaking with a prospect and offering to email information to them, they ask that it be mailed, that person is probably practicing digital avoidance.
They don’t participate in social media. Seventy percent of baby boomers are on social media – primarily Facebook and YouTube. For the 30% who are not using social media, it’s a clear indication they prefer other means to communicate and receive information. You can always check to see if a prospect has a Facebook account.
They’ve had a bad experience with a financial advisor. The client-advisor relationship is all about trust. People who have had a bad experience with a previous advisor are likely to have trust issues with financial advisors in general and may find it difficult to build trust in a virtual relationship.
The transformation of financial services to digital is undeniable and will only accelerate from here. For advisors who have the technology in place and are able to optimize it for business growth, there really is no going back. While it may not be possible to be 100% digital in your practice, the time, energy, and resources it takes to move in that direction require a commitment to targeting the right prospective clients to grow your practice.
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