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The most significant transfer of wealth between generations is underway right now. For Financial Advisors, it could be an extraordinary opportunity, or it could threaten their very survival. Ultimately, it’s a matter of trust.
Do investors have trust issues with Financial Advisors? A study by the CFA Institute revealed that the financial services industry is among the least trusted industry. Only half of those surveyed indicated they trust the financial service professionals to do what’s right. In a separate survey, the CFP Board found that just 40% of investors trust financial advisors to put their interests first.
Of the emerging group of affluent investors, millennial and Gen Z investors – the ultimate beneficiaries of the great $30 trillion wealth transfer occurring over the next 30 years – may be the least trustful. The younger generations tend to rely most heavily on the internet for their information, preferring to seek out or confirm information through digital channels rather than accept what a financial advisor might tell them. For them, if it can’t be Googled, it can’t be trusted. They especially distrust advisors who lack transparency or are unwilling to communicate with them on their terms.
The good news for advisors is that, according to the same CFP Board survey, 41% agree that having a financial advisory relationship is important. While many people might prefer digital interactions with an advisor, they still like the idea of having a human look after their assets. The challenge for advisors is those who are looking for an advisory relationship – be it Gen X, millennials, or even baby boomers – prefer an authentic advisory relationship based on trust and transparency, and their evidence of that is found initially through an advisor’s online presence.
Inspiring trust by building your online presence
Trust is hard to come by in these cynical times, especially for Financial Advisors who have an industry reputation to overcome. It must be earned and cultivated over time, facilitated by a process that leads people to discover who you are, what you stand for, and why you can be trusted.
In the digital age, building trust starts with creating an online presence, with a high-quality website and active social media engagement. An online presence helps to establish credibility within your target market. Regardless of how much experience an advisor has, having an online presence builds credibility in today’s highly competitive arena.
But that’s only the beginning. While credibility might get you some looks, it’s influence that inspires the level of trust that builds relationships. People tend to be drawn to people of influence. They are more often sought out for information and advice, which is at the core of the trust-building process.
What are the keys to building online influence?
Here are a few:
- Your website invites attention by being high quality and well-designed.
- You consistently publish content, offering guidance and insights through multiple digital channels.
- Blog posts, articles, whitepapers, or podcasts position you as an authority and thought leader.
- You continuously engage with your social media followers – seeking their thoughts as often as providing yours.
- You gain more trust and respect among your followers by offering objective and independent thoughts.
- You use data analytics to segment your markets and tailor your messages.
- Your followers respond to your suggestions to get involved and take actions.
You can’t expect to build your online influence overnight. It requires a commitment to a process. As you start the process, the good news is that you are engaging your target market and building trust along the way. As your influence gradually increases, you create more trust-building opportunities.
There is no time to waste in building trust.
Considering that it may take more than thirty years for the great $30 trillion wealth transfer to occur, many advisors don’t feel a sense of urgency to position themselves to capture their share. However, many in the next generations are already making decisions about who will advise them, which could determine the fate of many financial advisors for decades to come. It’s estimated that 90% of that wealth will not remain with the original advisor, which should be enough motivation for advisors to take action now.
The advantage you have is you know where they reside – in digital communities across the internet. But, if they can’t find you, you are invisible to your markets. You may already have an online presence – a website and some social media accounts. But, if you want to get their attention and gain their trust, you need to make the leap from merely having an online presence to a strategy for building your online influence.
Related: 5 Signs a Prospective Client Will Avoid Digital Engagement